More than 80% of parents are worse off now the Childcare Voucher scheme has closed, with 9 in 10 blocked from benefitting. 97% of employers wou
- More than 80% of parents are worse off now the Childcare Voucher scheme has closed, with 9 in 10 blocked from benefitting.
- 97% of employers would reopen the scheme, while half have seen a reduction in employee satisfaction.
- Only 5% of nurseries prefer Tax-Free Childcare to Childcare Vouchers and more than half say the closure’s made it harder for parents.
One year on since Childcare Vouchers closed to new entrants, a 20,000 strong survey of parents, employers and childcare providers has revealed the severe negative impact of the closure. The findings have renewed calls across the sector for a change of direction from government to re-open the popular workplace scheme.
The survey, conducted by the Childcare Voucher Providers Association (CVPA), highlights the barriers working parents face when returning to work with fewer options of childcare support. 40% of respondents said they’re less likely to come back to work now Childcare Vouchers have closed, with 84% having to reconsider their future career plans.
The lack of choice and poorer support has also left a staggering 84% of working parents worse off, with 9 in 10 families prevented from signing up to the scheme.
The results show Childcare Vouchers remain very popular among working parents, with 98% of current users happy with their experience. In comparison, more than 60% of parents who’ve since signed up for Tax-Free Childcare have found the process problematic, unclear and confusing. Only one fifth found the scheme easy to use.
Over half of employers have experienced a reduction in employee satisfaction, with an emerging ‘two-tier’ workplace – where some staff can access the benefit while others can’t. In comparison, 60% of employers found higher staff satisfaction among those on Vouchers versus those on Tax-Free Childcare.
Nurseries are also feeling the strain. The government’s significant underspend on Tax-Free Childcare has prevented childcare providers from accessing much needed funding and nearly half are spending more time supporting parents with the extra admin caused by Tax-Free Childcare than doing what they do best – providing high-quality childcare.
Other key findings from the report include:
- Tax-Free Childcare benefits higher earners much more than those on lower incomes, particularly families based in London and the South East.
- At the current rate of take-up, it will be April 2021 before the Government hits its target for Tax-Free Childcare – three years and eight months behind schedule.
- According to HMRC figures in 2018, parents only saved £352 per year under Tax-Free Childcare on their childcare bill compared to £1000 of savings under Childcare Vouchers – a loss of around £600.
In light of the report’s findings, the CVPA is renewing its call for Childcare Vouchers to be reopened to new entrants alongside the overwhelming majority (97%) of their survey respondents.
Parents’ experiences of the Childcare Voucher closure
My husband and I switched to the Tax-Free Childcare system as we thought it would help us more financially. But the scheme has been a nightmare and so many of my childcare costs, like breakfast and after school clubs, aren’t covered by the scheme.
I was made redundant and forced off the scheme. When I get a new job, I won’t be able to re-join the Childcare Voucher scheme. This means I won’t be able to get the childcare support my children need. I didn’t choose this situation, I’m just simply dealing with the change.
I work as a contractor and when my current posting ends, I’ll be forced off the scheme. This means my kids will miss out on after school clubs because I can no longer budget for them. People leave jobs all the time, it’s often not their choice!
I’m a trainee doctor and have to rotate NHS Trusts every 6 months as part of my training. When I leave my current posting, I’ll be forced out of the Voucher scheme.
I’m a basic rate tax-payer and decided to leave my job when the Voucher scheme closed, because childcare costs now outweigh my wage. It’s not worth me staying in employment!
I work for the NHS and lost access to the Voucher scheme after I moved from one NHS Trust to another. Because I didn’t choose to move employers, I feel unfairly punished.
I wasn’t told the Voucher scheme was closing, and now I’ll be left financially worse off. The new scheme doesn’t benefit us as much as the Voucher scheme did.
I was hugely disappointed to hear the Scheme had recently closed. The cost of childcare is huge, and Vouchers would have massively helped me return to work and afford quality care for my baby. Now me and my husband are unsure we’ll be able to make ends meet.
The closure of the Voucher scheme has had a huge impact on my career. There are no opportunities to progress in my current role, and so I was looking to move employer. But leaving my current job would mean leaving the scheme and I’d probably end up being penalised by increase childcare costs. This will definitely impact more women than men too. The closure of Vouchers hampers the career opportunities of working mums everywhere.
I have been so impressed with the service, as a user of Childcare Vouchers. It’s such a shame the government have now closed this. On top of that, the government has failed to communicate the closure of Vouchers properly and so I’ve been left out of pocket.
I’m a new parent who’s been told I won’t be able to access Childcare Vouchers, and alternatives don’t provide the support I need to carry on working and ensure my children receive high quality childcare. This means I’m having to rethink my return to work, as the cost versus loss of income means I will be left out of pocket.
Commenting on the survey’s findings, Chair of the CVPA Jacquie Mills said: “The voices of parents coming through our survey couldn’t be clearer – childcare support has to provide flexibility and choice, allowing parents the opportunity to decide what works best for them.
It also needs to break down the barriers to career progression, extending opportunities to working parents, and enabling employers to attract the talent they need.
Finally, it has to be simple and effective – that’s why we still support reopening the Childcare Voucher scheme. This would be the best option to achieve all these aims, aligning with the government’s objectives to support working families and helping businesses thrive.”
CEO of Working Families Jane van Zyl said: “This report confirms that the closure of the Childcare Voucher scheme is bad for employers and bad for parents. The government’s decision to close the scheme was disappointing—not least because in the workplace, Vouchers allowed employers to start conversations with parents about their family-friendly working policies and practice more broadly.
Working Families continues to call for Childcare Vouchers to reopen, running alongside Tax-Free Childcare, to allow parents the maximum amount of choice and enable them to choose the scheme that offers them the most support and helps them balance work and caring for their children in the way that works best for their families.”
Policy and Information Manager at Employers for Childcare Aoife Hamilton said: “Parents tell us every day about the challenges they face in paying for the childcare they need to allow them to go to work, with many questioning their ability to work at all. Closing Childcare Vouchers, has, for many families, increased this challenge with some receiving less support and others missing out entirely.
Families should have access to the form of childcare support that best suits their individual circumstances which is why we are calling for a comprehensive and flexible package of childcare support for parents that includes Tax-Free Childcare and Childcare Vouchers. Re-opening the Childcare Voucher scheme to new entrants is a policy that is aligned with the Government’s objectives, clearly has widespread support from parents, employers, and childcare providers and will be straightforward to implement as the necessary infrastructure is already in place, with the scheme continuing to be available for existing beneficiaries.”
This report was finalised before the June 2019 Tax-Free Childcare statistics were made available. This data shows a marginal increase in the usage of the Tax-Free Childcare scheme.