Clegg says he will slash childcare costs: but how?

Nick CleggLewis Whyld/PA Wire

Nick Clegg issued his New Year message to Liberal Democrat supporters today, and against a backdrop of the obligatory Christmas tree and not-particularly-festive jumper he announced that in 2013 the government was going to provide help with childcare bills.

So what did he say, and what does it mean for you?%VIRTUAL-SkimlinksPromo%

The message

Clegg used his video to remind his supporters that the Liberal Democrats have a role in this coalition. The overall message was that: "Whatever 2013 throws at us, the Liberal Democrats will continue to anchor this coalition in the centre ground, and we will hold firm to our key purpose in this government."

However, he also used the opportunity to hint at the priorities for the next session. He said: "We will stay the course on the deficit, we will cut income tax bills and help with childcare bills. We will invest in boosting jobs and we will reform welfare to get people into work."

So what could he mean by this?

The coalition hopes to gain a bit of a boost by introducing new childcare policies. After the axing of child benefit for better-off households, and tinkering with tax credits for working families, there is plenty of ground to make up.

According to the Daycare Trust, after the cut to the maximum level of financial support for childcare costs in April 2011, the average claim has fallen by over £10 per week. Furthermore, 44,000 fewer families are receiving this help with childcare costs.

A recent report by the OECD found that childcare will eat up an average of 68% of the household's second wage - this compares to an OECD average of 52%.

The Daycare Trust points out that average childcare costs now exceed £100 for a part-time place (25 hours) in many parts of Britain with the average yearly expenditure for a child under two standing at £5,103.


The government has been under particular pressure to take action, which this year manifested itself in the Childcare Commission, led by education minister Sarah Teather and work and pensions minister Maria Miller.

It was tasked with cutting the costs of childcare and considering how to increase the care available. When it finally reports, we can expect policy initiatives, the question is what?


As part of the process it looked at international examples, which have provided plenty of fruitful speculation. It could draw from the Danish where childcare is free for those on the lowest incomes, and subsidised by at least 75% for everyone else. However, in the current environment this is highly unlikely.

Alternatively it could take from the French model, which allows employees to work part time and draw a childcare benefit for up to three years, or the Dutch system, which pays a childcare allowance to every household where all adults work.

Current assistance for childcare in the UK is largely made up of 15 hours of free state-funded childcare for all three and four-year-olds. A simple solution could mean simply increasing the number of free hours. Alternatively, there could be tax breaks - possibly making some childcare tax-deductible.

At the moment this can only be speculation, but what do you think? What should the government be going? And is it right that it should be doing more, or is this unfair on those who don't have children? Let us know in the comments.
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