Labour attacks government underspends on childcare

Tulip Siddiq, Labour’s Shadow Minister for Children and Early Years, has accused the Government of 'incompetence' in delivering childcare support to working families through tax-free childcare. Tax-free childcare entitles eligible parents to£500 every 3 months (up to £2,000 a year) for each child to help with the costs of childcare, going up to £1,000 every 3 months if their child is disabled.

A written question tabled by the Shadow Minister revealed new data from the Department for Education, which Labour says lays bare the extent of the government’s failure to deliver. The new figures reveal that in the last three years there was an underspend of £1.7 billion on tax-free childcare, stemming from a lack of public knowledge about the scheme and how to use it.

The Government plans to spend a further £2.1 billion on the scheme, but has not put forward a plan for ensuring that every family eligible for the support benefits from it. Failing to support the scheme with a public information campaign will lead to a similar underspend and eligible families going without, says Labour. 

Separate data from HMRC published earlier this year found that only one in six parents who were eligible to access support through tax-free childcare have done so, with the government failing to build public understanding of the policy, leaving many families unable to access support that they are entitled to.

Tulip Siddiq said that the "government is completely failing to deliver support working parents with childcare at a time when they need it most". She continued, "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".

The figures revealed that the underspend for 2019/2020 stood at £664million. Where COVID-19 and the associated lockdowns and restrictions likely played a part in that, the £368million underspend in 2017/18 suggests that eligible parents are unaware of have had difficulty accessing the scheme.