• 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.
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.”