Education Select Committee Chairman suggests lowering childcare eligibility thresholds

Robert Halfon MP, Chair of the Education Select Committee has proposed lowering the "generous threshold" for tax-free childcare and "similarly generous earnings cap" for 30 hours funded childcare.

In his keynote speech yesterday at the launch of the Joseph Rowntree Foundation UK Poverty 2017 report, he gave some solutions to the social injustices in our education system.

His plan is to include foster children in the 30 hours funded childcare scheme.

He said: "Foster carers raise some of society’s most vulnerable children, many of whom would benefit from high quality childcare, which would help boost social development.

"We could pay for this by reducing the generous threshold that exists for parents to claim tax-free childcare, a subsidy that does not capture society’s most disadvantaged families. For instance, by dropping the eligibility cap to £65,000 from the exiting £100,000 mark, we could free up £150 million, which would easily cover the additional outlay.

"In time, we should also reduce the similarly generous earnings cap for the 30 hours of free childcare that is available for three- and four-year-olds. And we should channel this to non-working parents, whose children need it more."

NDNA's Chief Executive Purnima Tanuku OBE said: “The principle of capping the earnings threshold at a lower level to benefit our more disadvantaged families makes sense. However, before any decisions are made on the upper earnings threshold for 30 hours and tax-free childcare, we need to make sure this is thoroughly costed out to see how this will benefit both families and providers.”

Read the full speech here 

The Joseph Rowntree Foundation report said that four million children are in poverty (30%), poorer children are much less likely to achieve good qualifications, childcare is the highest cost for many working families after housing costs – risen much faster than inflation. One of its recommendations was to improve education and skills especially among children from low income backgrounds.

Purnima said: “Tackling the inequality gap starts in a child’s first few years.

“It’s vitally important that children receive high quality early years education as a foundation for lifelong learning before they start school.

“The government has been focusing on quantity rather than quality with its 30 hours funded childcare scheme. Now is the time to shift this focus by investing meaningfully in the early years workforce. 

“Highly qualified practitioners and graduates make the crucial difference within nurseries and other early years settings. Ofsted’s recent report Bold Beginnings showed that head teachers were seeing increasing numbers of two-year-old children who were benefiting from funded hours arriving at school primed and ready to learn.

“However, if the government decides to expand its funded childcare scheme to benefit more disadvantaged children, they need to revisit the whole policy, in particular the amount of money allocated which is currently way off the mark.

“The report also highlights the high cost of childcare for families with children. This is largely due to underfunding by successive governments of the ‘free’ childcare offer and increased costs, leading providers to increase fees for paid-for hours. If the government paid providers a fair hourly rate, families would not have to pick up the shortfall in the form of higher fees.”