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Thursday, 29 March 2018

Ministers confirm six-month delay in closure of childcare vouchers scheme

Written by Jon Vale

Ministers have confirmed that a system of childcare vouchers will be extended for six months before closing in October.

Elizabeth Truss said the move would allow the Government to monitor the introduction of tax-free childcare.

Labour accused the Government of sneaking out the date for the scheme's closure and called tax-free childcare "a disaster".

Employer-backed childcare vouchers are being phased out and replaced by the new system of tax-free childcare.

However, there have been widespread concerns about the new system's introduction.

Thousands of families have been unable to either set up tax-free accounts or access the money they had paid into them.

The delay in closing childcare vouchers was first announced in the Commons earlier this month, after pressure from the Government's confidence and supply partners the DUP.

Chief Secretary to the Treasury Ms Truss (pictured), in a written statement to Parliament, said: "To reflect concerns about the timing of the closure of childcare vouchers and the transition to tax-free childcare, the Government has decided to keep childcare vouchers open for a further six months until October.

"This will allow more time for tax-free childcare to bed in, for awareness to increase and for families to understand the support they can receive under the scheme.

"Now that tax-free childcare is fully rolled out, the Government will keep it under review to ensure it is delivering the support needed for working families."

Childcare vouchers and directly contracted childcare will now close to new entrants on October 4, Ms Truss said.

She added: "After that date, parents who are already using vouchers can continue to do so for as long as they remain with their employer, and their employer continues to offer the scheme."

In her statement, Ms Truss said tax-free childcare was a fairer and better targeted system than childcare vouchers.

She also said that since opening the childcare choices service through which parents apply for 30 hours' free childcare and tax-free childcare, more than 370,000 people have successfully applied and are now using the service.

"This Government is providing more help with the cost of childcare to working parents than ever before," she said.

Peter Dowd, shadow chief secretary to the Treasury, said: "The Government's shameful attempt to sneak out the date they will close the childcare vouchers scheme is fooling no-one.

"This change, forced through without parliamentary oversight, is the latest sign of a policy in chaos, leaving parents struggling with a complex and chronically underfunded childcare system.

"With tax-free childcare a disaster, the Government should listen to Labour, campaigners and even Tory MPs who are urging them to abandon their plan to phase out childcare vouchers for working parents."

Copyright (c) Press Association Ltd. 2018, All Rights Reserved. Picture (c) David Mirzoeff / PA Wire.

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