From The Metro:
Parents spend almost a third of their incomes on childcare – more than anywhere else in the world, say the Save the Children and Daycare Trust charities... Fiona Weir, of the charity Gingerbread, said government plans for childcare are a ‘ticking time-bomb for welfare reform’...
Ho hum.
Save the Children, total income £203 million, of which half was from various governments, primarily UK government, the EU, the US government and the United Nations (2009 accounts).
Daycare Trust, total income £1,115,450. They received £349,352 from the Dept of for Education; £120,000 from London Councils and £16,907 from the Equality and Human Rights Commission for "Policy, research and other projects" (2010 accounts).
Gingerbread, total income £3,125,643, of which £1,576,203 was payments from DWP for "back to work" type stuff (including income for training people to run "back to work" schemes) and £891,361 was grants (almost certainly from the government) (2010 accounts).
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As to the substantive issue, they are all missing a right old trick here. From the point of view of an individual, it is only worth working if
[wages minus income tax/benefit withdrawal] > [costs of travel, childcare minus subsidies].
So hiking the subsidy is much the same as reducing income tax on lower earners.
Further, from the point of view of society as a whole or the taxpayer in particular, the calculation is different. Is it better, for example, for three mothers to stay at home with their young children (not paying a penny in income tax) or for one of them to work in a nursery looking after all of the kids and the other two mothers to go out to work?
Assuming the latter (which is up to personal choice, of course), then up to a certain level of subsidy for childcare, there is no net cost to the taxpayer, as long as the income tax etc. paid/generated by the three working women is equal to or greater than the amount of the subsidy, it's just a sort of clumsy tax refund.
I'm not sure what that optimum level of subsidy (or personal allowance) is, but it's almost certainly higher than what it is presently.
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