Bill lays groundwork for Labour’s childcare manifesto pledge



(Title Image: nurseryworld.co.uk)

Childcare Funding Bill
Introduced by Minister for Children & Social Care, Huw Irranca-Davies (Lab, Ogmore)
Bill (pdf)
Explanatory Memorandum (pdf)

Why?

One of Labour’s key manifesto pledges at the 2016 Welsh General Election was to provide 30 hours of free childcare per week (over 48 weeks) for 3 and 4-year-olds of working parents. Some aspects of the scheme have already been piloted in some local authorities.

In essence, the Bill – which is very short – outlines the regulatory and funding framework needed to make that policy a reality on the ground.

The wider aim is to help working parents, and in particular single parents, work longer hours which would, in turn, boost their own household incomes and the wider economy.

The Lowdown: 3 Key Proposals in the Bill

1. It sets out the eligibility criteria for the free childcare scheme (via regulations)

The Welsh Government will, through regulations, be able to outline what families will and will not be eligible to receive the free childcare. The provisional criteria were listed in the explanatory memorandum and include:

  • Both parents (or the only parent in a single parent household) must be employed.
  • Each parent is earning, on average, the equivalent of 16 hours a week at minimum wage or living wage (with exemptions for those on leave, sick leave or where one parent is disabled, receiving certain benefits or is newly self-employed).
  • If self-employed or on a zero hours contract, the parent(s) must meet the minimum earnings threshold over a 3 month period.
  • No parent can earn over £100,000 a year.

These regulations will be subject to approval by AMs.

2. A parent/parents could be fined for providing false information

Any documents or information necessary to process a claim will need to be provided on request by the assessing authority – the preferred option being HMRC via an online system. Parents could be fined up to £3,000 if they lie in order to ensure their child was eligible.

3. Parents will have a right to appeal any decision on funding

The Welsh Government will have the power to make regulations on the tribunal process where parents may wish to challenge any decisions made, including the amount of any fines issues.

How much will the Childcare Funding Bill cost?

Under the preferred options (where HMRC process applications), the anticipated cost between 2019-20 and 2024-25 is £9.12million.

The system itself is expected to cost £3.2million to set up, which will be paid for by the Welsh Government. The ongoing cost (which presumably will go to HMRC in order to run the application service) is expected to be just under £6million over the 5/6 year period.

The application process is expected to take 20 minutes to finish, with an estimated 40,000 applicants a year.

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