Policy Impact Hub case study: Save the Childcare Voucher Scheme

25 Sep 2020 Déarbhla Sloan    Last updated: 25 Sep 2020

Employers for Childcare logo

This case study explains how the Save Childcare Vouchers campaign helped approximately 60,000 families across the UK access financial support with their childcare costs through the Childcare Voucher scheme prior to it being closed to new entrants.

1. What are your organisation’s aims and how does influencing policy help achieve them? 

Addressing childcare as a labour market issue and an economic issue, Employers For Childcare is a charity and social enterprise which conducts research and lobbies both the Northern Ireland and Westminster Governments to help influence and develop policy. The aim of the charity is to support working parents and provide them with the appropriate and most up to date guidance on financial support available with the cost of childcare.

The primary aim of the organisation is to make it easier for parents with dependent children to get into work, and to stay in work.

2. What was the issue?  Why was there a need for policy change?

The Childcare Voucher Scheme was a salary sacrifice initiative introduced by the UK Government in 1989 to enable working parents to purchase childcare vouchers in order to help with childcare costs. Through the scheme parents would not pay tax or national insurance on the amount contributed to the childcare vouchers scheme up to specified limits.

Following announcements by the UK Government that the original Childcare Voucher Scheme would be replaced by a new system, and closed to new entrants, there was recognition in the sector that the new proposed scheme would be less beneficial to many families, including some households on lower incomes. The new scheme, Tax-Free Childcare, was welcomed as a complementary form of support for families, rather than a replacement for a scheme that was working well. Due to the nature of Tax-Free Childcare, analysis showed that it would benefit those with the highest childcare costs, who were not eligible for Universal Credit or Tax Credits – typically, higher income households.

Employers For Childcare used the evidence base of thousands of calls to their Family Benefits Advice Service to demonstrate that approximately two thirds of families were better off using a form of support other than the Tax-Free Childcare Scheme. They also demonstrated how retaining the Childcare Voucher scheme would help families to phase off support through Tax Credits or Universal Credit, and move into work or increase their hours of work.

3. What was the policy solution or approach advocated to policy and decision-makers?

Recognising the limitations of the scheme, Employers For Childcare set out to demonstrate the value of retaining the Childcare Voucher scheme alongside the new Tax-Free Childcare Scheme, providing a complex analysis to demonstrate the value of Childcare Vouchers to families according to income brackets and a range of different characteristics.

The overall aim of the campaign was to advocate for a permanent extension to the Childcare Voucher scheme, alongside Tax-Free Childcare, ensuring that families could choose to access the form of support that best suited their needs, while being unable to benefit from both in tandem.

4. How was it advocated?

The campaign to uphold an extension to the current scheme was initiated on a UK wide basis working and engaging with a variety of stakeholders and political representatives.

  • Meetings and engagement with local MPs
    • Encouraged MPs to sign the Early Day Motion calling for childcare voucher scheme to be kept open.
    • Rallied MPs to sign a joint letter to the Chancellor calling for the scheme to be left open.
    • Local MPs raised the benefits of the scheme on the floor of the House of Commons.
  • Public Petition
    • The public petition received over 100,000 signatures and therefore secured a debate in the House of Commons. The debate was vital to the campaign as it gave the opportunity for the benefits of the Childcare Voucher Scheme to be discussed and recorded.
  • Secured meetings with high profile officials
    • Chief Secretary to the Treasury
    • Economic Advisor to the Chancellor
  • Engagement with other elected representatives, parents, childcare providers, partner organisations and employers.
  • Social Media Campaign #SaveChildcareVouchers

5. What was the outcome and public benefit provided by the policy change?

Although the overall aim of saving the Childcare Voucher Scheme on a permanent basis was not possible, the six-month extension to the scheme that the campaign secured was a very positive outcome. This enabled approximately 60,000 new families to join and benefit from the scheme.

The six-month extension, along with the campaign, resulted in more employers becoming aware of, and signing up to, the scheme. Many families continue to benefit from Childcare Vouchers, and will be able to continue to do so for as long as they remain eligible.

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