WBG welcomes funding boost for childcare in Universal Credit but it remains insufficient to meet actual cost of childcare today

Date Posted: Wednesday 31st May 2023

Budget 2023Childcare and Early EducationUniversal Credit

In response to the announcements made by the Department for Work and Pensions to increase funding for childcare payments under Universal Credit from June 28 2023, Dr Mary-Ann Stephenson, director of the Women’s Budget Group, said:

“The Women’s Budget Group welcomes the increase in childcare payments under Universal Credit, as it provides much-needed support to the poorest families and enables them to access employment, while supporting disadvantaged children to benefit from crucial early education. The decision to allow upfront claims for childcare fees is a positive step that could help approximately 300,000 parents previously locked out of work by the up front costs of childcare.[1]

“However, these changes are long overdue. The cap on reimbursement for childcare costs had remained frozen since 2016, while childcare fees have skyrocketed by 44% since 2010.[2] Although the increase in support for eligible parents’ childcare costs is welcome, it still falls short of adequately addressing the exorbitant costs of childcare in the most expensive parts of the country, such as London. In England, we see the average annual cost for a full-time nursery place for a child under two exceeding £14,000.[3]

“We also remain concerned about the introduction of automated sanctions for lead carers of young children, which removes the discretion of work coaches to assess individual circumstances, risks pushing mothers already struggling with bills into greater debt, and which have no evidence of actually working to support people into work.

“Today’s funding announcement was accompanied by a significant consultation by the Department for Education (DfE) looking at proposals to relax or remove regulations for childcare providers. While a huge boost to the workforce is needed to support the Government’s planned expansion of early education and childcare, these proposals raise concerns about the impact on the quality of early education for children.”

About the Women’s Budget Group

The Women’s Budget Group is a feminist think tank that provides evidence on women’s economic position, proposes policy alternatives for a gender-equal economy, and uses our knowledge and skills to build capacity for others to do the same. WBG hosts the Early Education and Childcare Coalition, a group of 30 organisations representing parents, children, providers, early years workers and the business community. Together they are campaigning for reform of the early education and childcare sector so that it delivers for all.

For more information or further comment, contact

erin.mansell@wbg.org.uk / press@wbg.org.uk


[1]  Citizens Advice (2021) Universal Credit is locking hundreds of thousands of parents out of work.

[2]  Trades Union Congress (2022) Childcare fees have increased by nearly half (44 per cent) for parents with kids aged under 2

[3] Coram Family and Childcare (2022) Childcare Survey 2022