Research Paper Election Briefing 2005 (Institute for Fiscal Studies) 7
Helping families: childcare, early education and work-life balance
Since 1997, the government has increased spending on early years services, nursery education for 3- and 4-year-olds and childcare subsidies for parents via tax credits.
In 2004, the government announced a 10-year strategy for childcare and early years education. The government claims that its public spending forecasts are consistent with implementing all aspects of the strategy. But it is hard to verify this statement, given that the government has not said how much some aspects of this strategy would cost and has not yet set out detailed spending plans for the Sure Start unit beyond 2008-09. The Liberal Democrats would implement much of this strategy, and the Conservatives would match the government’s commitments to 2008-09.
The three main parties are all committed to increasing maternity pay to nine months in 2007. However, they have different ideas for further increasing the generosity of maternity pay. Labour would allow some leave to be transferred to the father and has set a goal of extending paid maternity leave to 12 months in total; the Conservatives would offer women the choice of receiving the same amount of pay over either six or nine months; and the Liberal Democrats would offer first-time mothers a minimum income guarantee for the first six months of paid leave.
The Conservative Party proposes to introduce a flexible childcare payment into the working tax credit in 2008-09. This would build on the existing childcare tax credit, and would benefit around 250,000 working parents with children under 5 who either do not use formal childcare or use only a little, at a cost of around £460 million a year. The new payments would not be tied to using childcare: families could spend the extra payments on whatever they chose.