Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will make an assessment of the potential merits of paying childcare tax credits directly to childcare providers.

The childcare element of Working Tax Credit is intended to facilitate parental employment and is considered to be most effective when paid directly as part of a tax credits award, so that parents are afforded more of the choice and flexibility they need in order to work.

As well as giving families flexibility and responsibility in managing their financial affairs, the current approach avoids increasing the administrative burden on providers. Given that the childcare element covers a proportion of costs, paying providers directly would add an unnecessary layer of complexity, as providers would still have to obtain the remaining costs directly from parents.