Tax-Free Childcare scheme underspent by £1.7bn 

Only one in six eligible parents have taken up Tax-Free Childcare, the Government’s flagship support for parents, according to newly published data.

NDNA says that this money should be used to support the early years sector which is struggling to remain sustainable.

Tulip Siddiq, Labour’s Shadow Minister for Children and Early Years, has accused the Government of “serial incompetence” in delivering childcare support to working families. The government had failed to build public understanding of the policy, leaving many families unable to access support that they are entitled to, she said.
New data from the Department for Education, revealed by a Written Parliamentary Question tabled by Tulip Siddiq, showed that in the last three years there was an underspend of £1.7 billion on Tax-Free Childcare.
The Government plans to spend a further £2.1 billion on the scheme.

Purnima Tanuku OBE, Chief Executive of NDNA said: “NDNA has been highlighting these annual underspends every year since Tax-Free Childcare was introduced and calling on the Government to reinvest this money into childcare which it was intended for. 

“Providers and parents are struggling due to the significant impact of COVID-19 on their finances.

“Instead of the Treasury clawing back this money, it should be used to support providers with their sustainability by increasing their hourly rate. 

“These underspends demonstrate there is still a lack of awareness among parents around Tax-Free Childcare and the Government must make sure this scheme is better promoted. Any money set aside for childcare must only be used for that purpose as childcare is vital to get the economy back on track.”

Tulip Siddiq MP, Labour’s Shadow Minister for Children and Early Years, said:  “This incompetent Government is completely failing to deliver support working parents with childcare at a time when they need it most.
“With around half of parents struggling to access childcare and the sector on the brink of collapse, it beggars belief that Ministers have repeatedly failed to get support to every family who needs it.”