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Parents better off not working

A think-tank is calling for an overhaul of childcare, as it says the 'extortionate' costs of daycare threaten the Government's attempts to make work pay.

The Centre for Social Justice (CSJ), founded by Iain Duncan Smith, says that high childcare costs need to be tackled to ensure Government plans to make work pay reach their full potential.

A report by the think-tank shows that from next year the cost of childcare subsidies will reach £2.3 billion annually or as much as £910 a month for a couple with two children.

While the think-tank acknowledges that the Universal Credit will make work pay for more parents, it says the Government must not stop there. According to the CSJ, 455,000 UK families receive state support towards their childcare costs, with average payments of £232 a month.

Without reform of childcare it says that a single parent with three children needing after-school care would be 17p an hour worse off if they took a job. A single parent with two children in employment would only be 2p an hour better off.

For some large families it could even be cheaper for the Government to pay parents the minimum wage to stay at home and look after their children than pay a childcare subsidy, it predicts.

In order to make work pay, the report calls for a ‘pruning’ of red tape covering the provision of childcare. It suggests that regulations limiting the number of children a registered childminder can care for be eased and that schools should be given incentives to provide additional supervision of children before and after school.

POLL

What should Clegg's pledge to give councils £100m to help with childcare actually be spent on?
Improved facilities
44%
Training
18%
Free childcare
31%
Educational materials
7%
Total votes: 182