Question to the Department for Education:

To ask the Secretary of State for Education, whether her Department has made an assessment of the potential merits of providing parents who do not wish to use the 30 hours of free childcare with grants to pay for relatives and friends to look after their children.

In the Spring Budget 2023, my right hon. Friend, the Chancellor of the Exchequer, announced transformative reforms to childcare for parents, children and the economy. By 2027/28, the government will expect to be spending in excess of £8 billion every year on free hours and early education, helping working families with their childcare costs. This represents the single biggest investment in childcare in England ever.

As set out in the Childcare Act 2006, the definition of ‘childcare’ excludes care provided for a child by a parent or other relative. The government has no current plans to extend the definition of childcare to include relatives. Friends or acquaintances known to the parent can receive government funding, but they must be registered childcare providers.

Parents who are eligible for Tax-Free Childcare (TFC) or Universal Credit (UC) Childcare can use it to pay for any childcare provision registered with Ofsted or a childminder agency. If a relative registers as a childminder and cares for a related child outside the child’s own home, or registers as a nanny and cares for a related child inside the child's own home, that childminder or nanny can qualify for TFC or UC.

As part of the government’s biggest ever expansion to childcare provision, low-income families will be able to access increased childcare support worth a total of £900 million from 28 June 2023.

Later this month, the Department for Work and Pensions will raise the amount that parents in Great Britain can claim back monthly for their childcare costs on Universal Credit, up to £951 for one child and £1,630 for two or more children. This is a rise of 47% from the previous limits of £646 for one child or £1,108 for two or more children.

At the same time, the government will help eligible parents to cover the costs of the first month of childcare when they enter work or significantly increase their hours, removing one of the most significant barriers to parents working and helping to grow the economy.

Those parents will also receive up to 85% of their childcare costs back before their next month’s bills are due. This means they should have money to pay for childcare one month in advance going forward.

The government is also supporting families by providing additional cost of living payments of up to £900 for households on eligible means-tested benefits. Over 6 million people across the UK on eligible ‘extra-costs’ disability benefits will receive a further £150 Disability Cost of Living Payment during summer 2023/24, to help with the additional costs they face.

UC improves incentives for parents to enter work. Claimants with children are entitled to a work allowance which is an amount they can earn before their benefit is affected. Once earnings are above their work allowance, a single taper is applied. This ensures their UC reduces gradually as their earnings increase.

The government has consistently said that the best way to support people’s living standards is through good work, better skills and higher wages. To that end, the UC taper rate was reduced from 24 November 2021 from 63% to 55%, meaning that claimants can keep more of their earnings. At the same time, we also increased the work allowance by £500 a year, in addition to the normal benefits uprating.

State Pensions, benefits, and statutory payments have been increased in line with the Consumer Prices Index for the year to September 2022, which was 10.1%. These increases took effect from April 2023.

The government is committed to protecting vulnerable claimants by providing a last resort repayment method for arrears of essential services. The government recognises the importance of safeguarding the welfare of claimants who have incurred debt.