Nursery World - 'Change tax for free provision'

A two-tier childcare tax credit should be introduced to bring free early years provision to the families that need it most, according to a new report. At present, middle-income working families win out most, while non-working families benefit least from Government funding for childcare and early years education, says The surest route: early years education and life chances, published this week by liberal think-tank CentreForum.

At present, middle-income working families win out most, while non-working families benefit least from Government funding for childcare and early years education, says The surest route: early years education and life chances, published this week by liberal think-tank CentreForum.

The Government should link the childcare element of the Working Tax Credit to the Child Tax Credit (CTC), says the report, and pay this new element of the CTC at two rates - a higher rate for working families and a lower rate for non-working families. The lower rate would be set at a level to ensure non-working families would receive 20 hours pre-schooling a week (the Government's long-term goal).

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