Scottish Councils Fail To Support National Childcare Scheme

Working mothers are missing out on thousands of pounds because local authorities have failed to put in place available tax breaks. Childcare vouchers, which cut tax from nursery fees, can save busy parents as much as £100 a month.

Gordon Brown, the Chancellor, introduced the scheme in April 2005 to ease the burden on working families. However, so far only 30,000 people in the UK have benefited, including an estimated 3,000 families in Scotland.

Just 11 local authorities in Scotland have introduced the scheme, eight health boards, six police boards and 11 of 27 quangos surveyed. In contrast, Halifax Bank of Scotland, Royal Bank of Scotland, Scottish Power and Standard Life all provide the scheme for their employees.

The situation came to light when a teacher in Edinburgh complained to her local MSP, Tory David McLetchie.

The mother of two, who does not wish to be named, was angry that friends and neighbours employed by private companies were able to take part in the scheme, but it was not yet available in Edinburgh City Council.

“I have lots of friends working for other companies who do take advantage of it and they save lots of money and it would be nice to be in the same position – especially with two young children – to have more money available. I feel I have lost out,” she added.

Mr McLetchie discovered that only 575 people have taken up the scheme in 11 local authorities.

“Childcare vouchers should be generally available in both the public and private sector to employees who would benefit from them. The failure to introduce such schemes right from the start means that some parents have already lost out on as much as £2,000,” he said.

“I know that finding childcare is a major issue for families. Put simply, money which is available to help with childcare is currently going to waste and that makes no sense at all.”

Eileen Dinning, Unison Scotland equality officer, also called on local authorities to take up the scheme, along with other family-friendly practices.

“Local authorities take-up of them seems to be much the same as other employers, and we think they should be leading the way,” she said.

The Treasury said provision of childcare vouchers was not a “diktat”; instead, the legislation was put in place and organisations were expected to take the initiative themselves.

TAX SAVING OF £2,300

CHILDCARE vouchers can save a working family more than £2,300 a year.

All working parents of children under 16 are eligible regardless of tax status as long as their employer introduces the scheme, which works on a salary sacrifice basis.

For example, a working parent could forgo up to £55 a week, or £243 a month, in salary and instead take a childcare voucher which can be redeemed to this value against the cost of childcare, tax-free.

The vouchers are organised through a separate agency and can be redeemed manually or electronically.

Any officially approved nursery or childminder will take the vouchers, as well as after-school clubs, au pairs and even holiday clubs for school-age children.

Both parents can take part, representing an annual saving of up to £2,392 per family.

Employers also save up to £373 in National Insurance contributions per employee per year.