Nursery World - Scrapping of tax credits proposed

Controversial proposals to scrap childcare tax credits and vouchers and replace them with a Parental Care Allowance (PCA) for all parents of children aged nought to three, which could be used to fund unregistered childcare, were published by a think-tank this week.

In its report, Little Britons: Financing Childcare Choice, Policy Exchange argued that funding support for childcare should no longer be linked to employment 'so parents have genuine choice over whether to work or not, rather than when and how to work'.

The allowance of between £50 and £60 a week would go direct to parents from birth or after maternity pay has ceased, until the child starts to use early years services in the first term after their third birthday.

The report said that funding should 'no longer be linked to formal registered care so that those parents who prefer informal care (grandparents, etc) or to look after their babies and toddlers themselves, are also supported'. It would mean a shift away from supply-side funding of instititutions to demand-side funding which would 'follow the child'.

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