Labour blasts £1.7billion underspend on tax-free childcare as families struggle

Labour has accused the Government of serial incompetence in delivering childcare support to hard-pressed families.

New figures reveal a £1.7billion underspend on tax-free childcare over the past three years, which could have been used to help families.

In 2017/18, the underspend was £368million, rising to £683million the following year and £664million in 2019/20, according to figures revealed in a parliamentary question.

The large sums going unspent suggest parents are either unaware of their entitlement or are choosing not to claim it.

Shadow Children’s Minister Tulip Siddiq said it “beggars belief” that ministers were failing to get support to families that need it.

Only one in six parents who were eligible for tax-free childcare have taken up the support

Only one in six parents who were eligible to access support through tax-free childcare have done so, according to previous research by HRMC.

Ms Siddiq told the Mirror: “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.”

Early years leaders demanded answers on why the leftover cash was not being funnelled into the struggling sector.

Neil Leitch, chief executive of the Early Years Alliance, said: “At a time when nurseries, pre-schools and childminders are in such desperate need of a significant increase in funding, it beggars belief that the government would look at a huge underspend like this – money that was always intended to support parents to access childcare – and choose not to use it to support the early year sector.”

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Childcare providers have been devastated by the coronavirus crisis, he said, warning many will not survive without urgent support.

Mr Leitch added: “With the take-up of tax-free childcare continuing to fall far below original estimates, we urge ministers to reallocate the unused funding for this policy to where it is clearly needed.

“If the government genuinely cares about early education and ensuring parents have access to the childcare they need, then supporting the sector that provides both is surely an obvious political choice.”

An HMRC Spokesperson said: “The Government is supporting families by committing almost £6 billion a year to childcare support, and the take-up is rising. 

“The number of families benefiting has doubled compared to this time last year.

“We are continuing to promote Tax-Free Childcare to parents by working with stakeholders to raise awareness while encouraging even more parents to apply.”


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