Working parents offered £1,200 for childcare

The Government is promising parents it will meet up to 20 per cent of the costs of children’s care while their parents are at work.

Payouts will be limited to £1,200 a year per child and families where one parent stays at home or those on benefits will not be able to claim.

The new scheme is a political move to position the Coalition on the side of hard-working families.

Ministers also hope helping with childcare costs will improve the labour market by making going to work pay for more parents.

Figures suggest that parents in the UK spend a much higher proportion of their incomes on childcare than elsewhere in Europe.

The Government says the new scheme will eventually help 2.5m families and will be easier to access than existing childcare vouchers which are only offered by around five per cent of employers and used by some 450,000 families.

Julia Unwin, chief executive of the York-based Joseph Rowntree Foundation, said: “Recognising the burden of childcare costs is a start, but the extra help in the new tax-free childcare policy barely benefits those on the low incomes, nor makes up for the shortfall from previous cuts to childcare tax credits.

“Knowing support is coming in three years’ time provides little comfort for those who are struggling to make it through to the end of the week.

“With cuts to benefits and tax rises around the corner, the struggle for millions of poor families shows no sign of relenting.”

The Children’s Society complained there was not enough in the Budget to help families.

Chief executive Matthew Reed said: “Children are largely absent from this budget.

“It gives little hope to struggling families already hit by sweeping cuts.

“If the government is committed to creating an ‘aspiration nation’ then it must invest in this country’s children.

“It is good news that health and education budgets are being protected. But we are very concerned that childcare changes will fail to help families most in need of support.

“Proposals to limit the flexibility of welfare expenditure increases the risk that families will find it harder to provide even the very basics for their children.

“The Government must do much more to help low income families.”