Childcare: Government 'should help parents spread cost'

The money would be in the form of vouchers for high-quality childcare

UK parents should be able to spread the cost of childcare over as many as 20 years, according to a think tank.

The Social Market Foundation wants the government to offer up to £10,000 up front, which families would pay back in monthly contributions.

All working parents with children under school age would be eligible.

Report author Ian Mulheirn said: "The high cost of formal childcare effectively locks thousands of parents out of work each year."

Mr Mulheirn said the poorest families would benefit most from the proposal, as recent research showed that a quarter of parents on the lowest income brackets had given up their jobs because the cost of childcare was too high.

"Childcare costs impose a huge burden on families for a relatively short period of time.

"This has a real impact on families' household budgets and can mean that it's simply not viable for some parents to go to work, despite the real benefits to both their earning power and their children's development offered by formal childcare," he said.

The report suggests that the money should be given to families by the government in the form of vouchers for high-quality nurseries or child minders.

The authors say this would improve the quality of childcare and boost educational attainment in children from poorer households.

'Innovative scheme'

The money would be paid back in the form of an extra tax on the income of the main earner in the household.

The authors suggest a repayment rate of 6% until families have paid off the amount in full, or after 20 years have elapsed.

Mr Mulheirn said: "By helping parents spread the cost through manageable monthly contributions, this innovative scheme can help parents do what is best for themselves and their children."

A YouGov poll of parents of preschool children showed support for the idea, with 57% saying it was a good idea and more than a quarter saying they would use the scheme if it was available.

The Daycare Trust, which campaigns for quality affordable childcare, said the proposal should be considered seriously but would not solve all the problems faced by the poorest families.

"Many families already have debt problems and will not be willing to take on more," said chief executive Anand Shukla.

"We believe that the best way of supporting parents is to increase the number of hours of free childcare for pre-school children, as well as offering financial help through the tax credit system so that all families can benefit from high-quality childcare."

The Social Market Foundation has sent a copy of the report, A Better Beginning, to the three main political parties.