Government needs to do more for 1 in six children in total poverty

Major charities have come together to criticise the inaction and damaging domestic policies of David Cameron and Nick Cleggs Tory-Liberal coalition government.

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Over the last year 300,000 more families have fallen into extreme hardship, with their net family income at less than £250 per week or less

Anne Marie Carrie Chief Exec of Barnardo’s said the government was not doing enough to help families ‘at the tipping point between hardship and crisis’, she continued ‘families already budgeting on a shoe string, squeezed by the rising price if essentials and high childcare bills. Tis year many households will be pushed into financial chaos when the cap on benefit increases takes effect, compromising the health and life chances of children.’

Further to the ‘300,000 children that have fallen in to abject poverty, half a million working age adults along with a further 100,000 additional pensioners’ said Oxfams Katherine Trebeck she continued ‘its unacceptable that the seventh richest country on the planet, we’ve seen the number of people living in poverty rise by almost a million’.

Key findings:

Childcare costs

► The average cost of a nursery place for a child under two is now £4.26 per hour across Britain. A parent buying 50 hours of childcare per week for a child under two would face an average annual bill of around £11,000 per year.
► London, the South East and the South West are the regions with the most expensive under-fives childcare. In London, nursery care for children under two is 25 per cent more expensive than the average across Britain.
► In London, the average cost of a nursery place for a child under two is now £5.33 per hour. A parent in London buying 50 hours of childcare per week for a child under two would face an average annual bill of nearly £14,000 per year.
► The average cost of a childminder looking after a child under two is now £3.93 per hour across Britain. Childminders who pick up children after school charge on average £72.78 per week.
► Nursery costs for three and four year olds in England are only 1.9 per cent cheaper than are costs for children aged two and under, where different staffing ratios apply. This suggests that changing staffing ratios for nurseries
and childminders would not make childcare significantly cheaper for parents.
► The most expensive nursery costs £408.75 for 25 hours childcare per week. Over the year, a part-time place (25 hours) in this nursery would cost over £21,000 per year and a full-time place (50 hours) would cost £42,000.
► The average cost of an after-school club is now £49.67 per week across Britain. A parent with two children in an after-school club for 15 hours per week would have an annual bill of nearly £4,000 during term time.
► The East Midlands, Yorkshire and Humberside and the South East have the most expensive after-school clubs.

Action I would take to make childcare provision cheaper:

Tax: I would change the childcare ‘exempt’ category for VAT to zero-rated, which would allow private nurseries to claw back VAT paid out. The provision of childcare services by registered daycare providers is exempt from VAT. This means that nurseries cannot register for VAT and cannot recover any VAT on any purchases of good and services.
If VAT was zero-rated for childcare providers, as it is in the construction industry, settings could claim back tax for any equipment or resources purchased without having to add VAT to their fees.

For parents I would allow them to claim back the tax and national insurance on earnings spent on childcare, for the average wage Londoner earner this could add £3,000+ to their tax free tax allowance per year

Procurement: The government could do more to use procurement structures to negotiate more favourable pricing of childcare provision, capitalising on efficiencies of scale.

Staff Development the highest costs to operating a childcare setting is staffing, as ratios of staff to children are legally set. The government should undertake a review of these numbers to help reduce costs, after a national workforce development programme has been undertaken, ensuring no decline in care standards would result.

Cooperatives: I believe a cooperative solution could help us achieve higher quality cheaper childcare, the government should set up a seed fund to support the programme already established to grow the number of nurseries and nursery places across the UK. For more info: http://www.thecooperativechildcare.coop/

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