On 9th December 2014, the Bishop of Sheffield, the Rt Revd Steven Croft, took part in the Second Reading debate of the Government’s Childcare Payments Bill. The Bishop welcomed the provisions in the Bill to support low and middle-income families, but pressed the Government to ensure the Bill provided equity of delivery for families in receipt of Universal Credit, and also called on the Government to provide greater support for families with disabled children.
The Lord Bishop of Sheffield: My Lords, from these Benches I warmly welcome the Bill, which will provide much needed assistance towards childcare costs for many middle-income and low-income families. I also welcome the careful expansion of the availability of childcare. However, there are two areas which I shall mention briefly where further attention may be needed.
The first concerns the equity between this provision and the provision for families in receipt of universal credit. The Children’s Society estimates that by the time universal credit is fully implemented, around half of children may be living in families in receipt of universal credit. Some of the parents in the statistics quoted by the Minister who want to return to work will certainly be in this category. The challenge of childcare costs, for those returning to part-time and low-paid work, is significant.
My questions relate to equity in the administration of support rather than the quantity. I warmly welcome the intention to develop an easy-to-use online tool to help parents to determine the best help available. How will the Government ensure that universal credit and tax-free childcare complement each other effectively? Will the Government consider making childcare accounts available for families in receipt of universal credit? Will they consider making childcare payments from universal credit on the basis of costs incurred rather than payments made? Will they ensure that families have at least a month to report their childcare costs under universal credit and so receive their full entitlement, which is so important?
My second area has already been mentioned and relates to families with disabled children, where childcare costs can be higher. I warmly welcome the extension of support to parents of disabled children up to age 16. Will the Government consider making this Bill even more effective by providing a higher rate of support through the tax-free childcare scheme for children with disabilities, reflecting the higher general costs of childcare for such parents? These questions are in the context of a warm welcome for the proposals in this Bill.
Lord Newby (Government Response): …The right reverend Prelate asked a number of detailed questions about the way in which the scheme works, how it will interact with universal credit and whether the Government will consider a number of changes to the way we are planning to administer it. In particular, he asked whether the Government might consider allowing help with childcare costs through universal credit to be paid via a childcare account. We have a number of issues with that suggestion. The new scheme is fundamentally different from schemes such as universal credit, with support paid for different purposes in different ways to meet different circumstances. Universal credit is paid as a monthly lump sum to cover a range of costs, including childcare costs. It is not ring-fenced and is intended to support households to focus on budgeting on a monthly income. The objective is to ease the transition into starting or going back to paid work, which is why it is paid in a similar way to a monthly salary. If the Government move to the suggestion made by the right reverend Prelate, we would end up with a much more complicated scheme than we have at the moment. I think universal credit and the benefits system is complicated enough without running any risk of making it more complicated.
The right reverend Prelate asked about the fact that support for childcare in universal credit would be on the basis of payment of childcare made rather than childcare costs incurred, and that this will mean that people will have to find money up front to meet these costs. I can see that this is considered potentially to be an issue, but for parents moving into work we have the flexible support fund that can be used to pay for childcare to enable a claimant to start work. Budgeting advances that will be available to families under universal credit are also designed to help claimants pay for intermittent household expenses, of which this will be one. The money will then be reclaimed over a period. The principle under universal credit that you pay for the childcare costs that you have actually incurred is a very sensible way of approaching matters but having this fund will ease that transition, which is very important…