Supporting People into Work: Childcare Costs

Work and Pensions – in the House of Commons on 23rd January 2023.

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Photo of Kate Hollern Kate Hollern Labour, Blackburn

What steps he is taking to support people with high childcare costs to enter work.

Photo of Mims Davies Mims Davies The Parliamentary Under-Secretary of State for Work and Pensions

Parents claiming UC who move into work can get support with paying up-front childcare costs through the DWP flexible support fund. Once in work, eligible parents can claim back up to 85% of their childcare costs each month through their universal credit. That is worth up to £650 for one child and around £1,100 for two or more children, regardless of the number of hours that parents work. There is vital support for working parents and I encourage all hon. Members to visit their jobcentres to help them to understand that and the other crucial support available to their constituents.

Photo of Kate Hollern Kate Hollern Labour, Blackburn

Soaring childcare costs are compounding the cost of living crisis and in some cases pricing them out of work. According to the Coram childcare survey, parents in the north-west are paying on average £1,150 a month for a nursery place for a two-year-old. What plans does the Minister have to support parents who are out of work, looking to increase their hours or on a low wage and struggling with overbearing costs?

Photo of Mims Davies Mims Davies The Parliamentary Under-Secretary of State for Work and Pensions

I thank the hon. Lady for raising this matter, because it is important for employers to step up as well. Where they have vacancies, they should think about job design and being more welcoming to people wanting to take on more hours and to progress. That is some of the work we are doing through our changes to progression, working with our jobcentres. Of course, payments can also be made directly to the childcare provider, but I am very keen that this works for all parents and it is a matter I am looking at.

Photo of Siobhan Baillie Siobhan Baillie Conservative, Stroud

The DWP Committee has conducted an investigation into the childcare element of universal credit and, as we have heard, the offer is a good one, at 85% of costs paid. However, the system is not working and only 13% of eligible parents are taking it up. Parent after parent told us that they want to go out to work and that this is an issue. Will my hon. Friend confirm whether there have been discussions with the Treasury ahead of the spring Budget to think about funding our key asks of removing the up-front payment requirement and uprating the care?

Photo of Mims Davies Mims Davies The Parliamentary Under-Secretary of State for Work and Pensions

My right hon. Friend the Secretary of State takes a great interest in this matter, and I can assure my hon. Friend that we are all keen to see more parents in work. In fact, the current rate for lone parent employment is 64.6%. She knows this subject very well and advocates for change, so she fully understands the challenges. We will respond in due course to the Committee’s report, which was published at the end of last year. I reiterate my absolute passion for making this work for all parents.

Photo of Karen Buck Karen Buck Shadow Minister (Work and Pensions)

Soaring childcare costs are indeed a major barrier to parents seeking to return to the workplace. Parents seeking to take a job may find that they have to have at least £1,000 in the bank in advance to pay for the first month’s childcare. Can the Minister explain how a parent on universal credit who wants to move back into work is supposed to fund those up-front childcare costs and then wait a month for them to be reimbursed?

Photo of Mims Davies Mims Davies The Parliamentary Under-Secretary of State for Work and Pensions

I thank the hon. Lady for that point, and take the opportunity to remind the House and all employers to think about job design, flexibility and inclusive recruitment, because that will make a difference. With regard to eligible claimants moving back into work, they can receive support for up-front childcare costs through the Department’s flexible support fund. Claimants can also receive support for up-front costs if they increase their hours and take on an additional job. Payments can be made direct to the childcare provider, and we are working on further guidance on that.