The Benefit System, Welfare to Work

– 'Work does not pay' says families in new DWP report

Work does not pay say families in new DWP report

Today the Department for Work and Pensions reported that a lack of suitable childcare and depletion of In-Work credit act as further hurdles to lift families out of unemployment.  The DWP report, Families and Work: Revisiting Barriers to Employment, is published just three days after mothers issued a petition with over 50,000 signatures to  Downing Street in opposition to cutbacks in Sure Start centres.

The Sure Start scheme was introduced by the previous Labour government, to help families with child care facilities and improve early education.  The scheme had initially been focussed on assisting children up to the age of four but was extended beyond this age limit to help those at risk, especially children with disabilities.  Two thirds of councils are now planning on cutting their budget by halting support for Sure Start centres.

In February this year, the Family Information Services in England, Scotland and Wales reported that childcare had increased by 4.8% over the last year, with the average cost for 25 hours of nursery care stands at £5,028 per year in England.

Anand Shukla, acting Chief Executive of Daycare Trust said:

When parents sit down to calculate their family finances and see childcare costs increasing far faster than their wages, it is no wonder they may think twice about the economic sense of staying in work. These high, rapidly rising costs are particularly significant given the number of people not receiving cost of living pay increases this year, the increase in VAT, and rising costs of other household goods, particularly food and fuel.

These findings add to our concern about the reduction in the childcare element of Working Tax Credit, which from April will only cover up 70% of childcare costs for low income working families, rather than the current 80%. Once this change comes into place, some families will effectively have an extra £546 a year added to their childcare bill. Yet parents in the UK already spend an average of one third of their net income on childcare costs – more than in any other OECD country”.

The DWP report also revealed that some parents believed that working simply does not pay.

The coalition-government has maintained that support will be given to those who need it the most, but the ultimate decision of funding will lie with the local authorities.

Kuki Taylor

Research and Communications Officer

Read more here:

http://research.dwp.gov.uk/asd/asd5/rports2011-2012/rrep729.pdf

Website:  DWP, Daycare Trust

Source:  http://www.dwp.gov.uk/newsroom/press-releases/2011/apr-2011/dwp040-11.shtml

http://www.daycaretrust.org.uk/pages/rapid-rise-in-childcare-costs-adds-to-family-finance-woes.html

Published on 6th April 2011

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