Work and Pensions Committee launch inquiry into Universal Credit & childcare costs

The Work and Pensions Committee has today launched an inquiry into Universal Credit and childcare costs amid concerns that the current system of childcare support creates barriers to parents moving into work or working more hours.

The inquiry will examine how childcare support is paid and the impact of caps and limits on the amount of support available. It will also explore the effectiveness of advice about childcare support given to parents claiming UC and the efficiency of public funding of wider childcare support schemes.

The previous Committee concluded in a report in 2019 that getting childcare support right was critical to the success of UC but warned that flaws in the way that support was paid was preventing some people moving into work or taking on more hours.

Despite the Government’s commitment to change, the current Committee heard during its inquiry on DWP’s response to the coronavirus outbreak that some of the issues identified in the report were still having an impact.

Rt Hon Stephen Timms MP, Chair of the Work and Pensions Committee, said:

“Despite the intention that Universal Credit should act as a springboard for helping more people benefit from work, there have been concerns for some time now that the way support is provided to families to meet childcare costs is acting in direct conflict with that aim.

“The Committee has heard during the pandemic from parents struggling with upfront childcare costs and the cap on reimbursement of 85%. This inquiry will explore whether support is being paid at the right time and whether there is a case for changing the cap.

“With the recent removal of the £20 a week UC uplift, many parents and carers may be looking to work more hours to compensate. It is therefore more important than ever that we have childcare support that works properly for them.”