New sources of childcare support for working families in the United Kingdom

As of September 2017, the UK Government has implemented a universal scheme to provide 3- and 4-year-old children of working parents in England with 30 hours of free childcare per week, an increase from the 15 hours of free provision that has been available to date.

The aim of this policy is twofold:

1. to remove barriers to employment by helping families with their childcare expenses and.
2. to support development and to raise educational attainment of children.

It is estimated that around 390,000 working families will benefit from this policy, while children of two years of age from disadvantaged backgrounds will still qualify to receive the 15 hours of free childcare entitlement.

Extension of free childcare provision

Before the national rollout in September 2017, the scheme was piloted by a number of Local Authorities across England. During the pilot, several aspects related to the delivery of childcare services were examined as well as some preliminary impact indicators relating to childcare use and parental work.

An independent evaluation of the pilot scheme, based on a survey of providers and parents in four of the pilot areas, found that many childcare providers were able and willing to offer extended provision and that parents were keen to take up the extended childcare provision. The actual number of children benefitting from the extended provision in two pilot areas was close to the estimated number of children eligible for the scheme.

In addition to helping families remain in the labour force during their children’s early years, the scheme intends to support the development and educational attainment of children. As summarised in EPIC policy briefs on Early Childhood Education and Care (ECEC) (e.g. on childcare and working arrangements, the long-term effects of ECEC, and the importance of quality in ECEC), high-quality ECEC benefits children in terms of cognitive and social development, in particular for children from a disadvantaged background, and participation in formal childcare settings is associated with positive short- and long-term social and economic outcomes.

Tax-Free Childcare Scheme

The extension of free childcare provision is one of a number of measures available to support working parents. As of April 2017, Tax-Free Childcare has also been established with the aim of helping parents with the cost of childcare. The scheme allows parents to open a ‘childcare account’ to save money towards their childcare costs. For every £8 (approximately EUR 9) a parent pays into the childcare account, the UK government pays an extra £2, with a maximum of £2,000 of government support per child per year (or £4,000 for a disabled child).

The scheme is open to working parents of children under the age of 12 (or 17 if the child is disabled). In order to qualify, parents’ earnings have to be (on average) at least £120 a week, but no more than £100,000 a year. Parents can use Tax-Free Childcare in conjunction with the free childcare schemes in England, and the equivalent free childcare hours provided by the Scottish, Welsh or Northern Ireland governments. The scheme was introduced on 21 April 2017, with the parents of the youngest children being given priority in applying for support.