28th September

Soaring childcare costs and crippling tax cuts force women to stay at home
Every week, 600 hard-pressed working mothers are being forced to give up their jobs.  When rocketing childcare costs are added to soaring household bills and vanishing tax breaks, many just can’t afford to keep working and throw in the towel.

Ruth Lythe investigates the financial reasons behind the rise of the stay-at-home mum.

What's happening?

Every day, dozens of middle-class mothers decide they cannot afford to return to work after having a baby.

According to insurer Aviva, 32,000 have quit the workplace in the past year.

It’s not because they believe a woman’s place is in the home — many love their jobs and want to return to well-paid careers — but because it’s cheaper to stay at home.

In the past 12 months, on average, household bills have soared by 20 pc, National Insurance has risen by £70 a year, £545 in child tax credits has been taken away, and child benefit was frozen.

Childcare costs have rocketed, too. According to children’s charity the Daycare Trust, parents pay 25 per cent more to send a two-year-old child to nursery than five years ago.

And the situation is going to get worse. From next year many families earning more than £25,000 will be stripped of even more child tax credits because of Government cuts. And from January 1, 2013, any household with a higher-rate taxpayer paying  40 per cent tax will lose child benefit worth £1,752  a year.

Figures Aviva has compiled for Money Mail show the cost of childcare is already so high that a mother of two children earning £25,000 a year — and with a husband earning £43,000, just over the higher tax threshold — would have just £300 left a month once childcare and the commuting costs have been taken into account.

And after child benefit is stripped away next year for families with a higher-rate earner she will have just £153 a month left from a month of full-time work — a figure which will drop further if childcare costs and fuel prices  keep rising. Her husband’s salary must  cover all bills, housing costs, clothes and food  and savings.

The Daycare Trust claims a quarter of  middle-income families are being pushed into debt by the cost of sending their young  children to nursery, while a further third say they struggle to afford it.

Almost two-thirds of an average family’s second wage is now swallowed up in childcare costs, with fees for children under two rocketing by 5 per cent over the past year.

Childcare costs

Whether you use a live-in nanny, a local childminder or send your child to nursery, the cost of childcare has soared — increasing by £42.46 a month in the past year.

Families on average now pay £729 a month to send a child to a nursery for 25 hours a week. For a 35-hour week a family would pay £1,540 a month for one child — almost as much as the average take-home pay of £1,680.

All three and four-year-olds are entitled to 15 hours of free nursery education for 38 weeks of the year.

This can include time in play schemes, nurseries and pre-schools.

However, many parents with full-time jobs still have to fork out for up to 40 hours of childcare a week for their pre-school children.

A nanny costs about £32,000 a year, including income tax and national insurance payments.

Those with older children also face big bills for care after school and during holidays.

The average cost of childcare during holidays in England — both at local authority playschemes and in private clubs — has doubled over the past decade to £96.85 a week.

The cost of childminders for the under twos is also on the rise — increasing by an average 8 per cent to £90 in England over the past year.

A spokesman for the National Childminding Association says: ‘Because there is no significant state subsidy for childcare, parents end up spending more of their income on childcare than those in most of Europe who receive more generous support.’

Household bills

Throughout 2011, family budgets have come under huge strain from soaring energy and food prices. Gas and electricity bills have risen by an average of 12 per cent, following a bevy of price hikes from energy providers.

And according to the Office for National Statistics, food bills have increased by 5.8 per cent, adding £14 to the average weekly family shop.

Parents who commute to work also face being hammered by the soaring cost of rail season tickets.

From the New Year these are due to rise by an average of 8 pc and up to 13 per cent for some journeys.

Those driving to work are also suffering. Fuel costs have risen by an average 15 per cent a year — costing families £9 more a week.

Meanwhile, motor insurance premiums have increased by a third in 12 months, according to the AA, and now average £923. And many items families buy have increased because of a rise in VAT from 17.5 per cent to 20 per cent from January 4 this year, although most of the food families buy, as well as books and newspapers and children’s clothes, are exempt from VAT.

Child benefit

Many families have also had to face benefits and tax credits being cut. Child benefit, paid to all families, has been frozen at £20.30 for a first child, and £13.40 for additional children for three years.

This will save the Government £975 million by 2014 — but taking in to account inflation, Citizen’s Advice reckon families could be £240 a year worse off in  real terms.

From January 1, 2013 families where one earner pays higher-rate tax at 40 pc will lose child benefit altogether. Not only will this take £1,752 from the pockets of a middle-income family with two children, it will also create a huge inequality.

For example, a couple where mum and dad each earn £41,000 — giving a total household income of £82,000, would still be able to claim child benefit. But a couple where one earner makes £43,000 and the other nothing would lose their benefits.

Worse, the Government has still not clarified how it will ensure stay-at-home mothers do not lose credits towards their state pension — which are only given to those taking child benefit. Meanwhile, new parents have lost other benefits. In January, the health in pregnancy grant, a £190 payment to all expectant mums, was scrapped. A £500 SureStart maternity grant is also now only for first children.

Child tax credits

These tax perks are whittled away for households with an income above £16,190. There are several parts to child tax credits — a family element worth up to £545 a year and a child element of up to £2,555.

Previously, families who earned more than £50,000 got the family element — and the child element was then gradually whittled away until at £58,000 they got nothing.

But since April families with incomes over £41,329 haven’t qualified. Families with newborns also used to get an extra £545 — but this has been taken away. From 2012, entitlement to the family element will be cut further — then anyone earning more than £25,000 will receive nothing.

Some working families are eligible for extra tax credits to help with childcare costs. Last year you could claim up to £240 a week for childcare for two or more children and £140 for one child — now it’s £210 for two children and £122.50 for one child.

National Insurance

National insurance is a tax on your income taken from your pay. Last year employed workers paid 11 per cent NI contributions on earnings between £110 and £844 a week. They then paid 1 per cent on earnings above this level. But in April contributions jumped to 12 per cent on earnings of £139 to £817 and 2 per cent above this level.

So someone earning £25,000 pays an extra £12 a year. Someone earning £50,000 pays £122 more a year.

The self-employed have also seen their contributions increase. They pay a flat rate of £2.50 a week on income over £5,315 a year, a rise of 10p a week.

Childcare vouchers

For many working families, childcare voucher schemes are a lifeline. These are normally offered by employers and the value of the voucher, up to £243 a month, is deducted from your pay packet before it is taxed, reducing your overall tax bill.

Yet this year families with a higher-rate taxpayer — someone earning more than £42,475 a year — have had the amount they can save in this way cut back from £1,225 to £623 a year.

What you can do

It pays to write a budget and shop around for everything — from clothes, to food to energy and phone deals.

When signing your three or four-year-old child up to a nursery or childminder, check you’re not paying for hours you don’t need. Make sure your Ofsted-approved carers give you the 15 free hours a week to which you’re entitled.

Families who face losing child benefit because they have a higher-rate taxpayer in the household can also take action. Try taking yourself out of the higher bracket by paying more into a pension — as you get tax relief on these contributions.

Someone earning £47,500 a year, with a standard personal allowance of £7,475, may already be paying 5 per cent in to a company pension — bringing their taxable income down to £45,125.

If they paid an additional £2,700 into a personal pension, their taxable income would be £42,425 — below the level at which higher rate tax starts.

If both parents are now basic-rate taxpayers, a family with three children would now qualify for £2,449 of child benefit.

source: Ruth Lythe, This is Money.co.uk

27th September

Daycare Trust calls for funding to back parent-run children's centres
Government reform of Sure Start rules to make it easier for parents to run children's centres must be backed with funding, the Daycare Trust has warned.

The government is to launch a consultation later this year over changes to Sure Start statutory guidance so that parents and community groups can apply directly to councils to run centres without having to seek central government approval.

However, Daycare Trust chief executive Anand Shukla said: "We welcome moves to give parents greater involvement in running children’s centres, but the most important thing is that funding is available to maintain the network of essential services and support that children’s centres provide. In too many areas children’s centres are being closed or seeing services cut."
 
He added that parents are already involved in children’s centres, including campaigning against closures and cuts to services.

Children’s minister Sarah Teather said: "Children's centres are at the heart of community life. New proposals to enable parents and communities to help run children's centres will give local people more control and influence over the services they use on a daily basis."

The move has also received the support of 4Childen chief executive Anne Longfield, who said: "The voluntary sector can offer cost-effective services and valuable specialist knowledge, particularly in working with vulnerable families and communities."

Patricia Hanson, National Day Nurseries Association director of strategic partnerships and development stressed that it was important that any local community or voluntary groups undertake due diligence to question whether they will be given will be given the same level of funding and support as local authorities currently receive to run children’s centres.

She added: "It is important not to give the impression that children’s centres are easy to operate. Local authorities have experienced several difficulties with maintaining children’s centres and a number have closed down due to issues with sustainability. There is a skill and expertise involved in running a Children’s Centre and this must not be underestimated."

Meanwhile, the government has also announced plans to expand its trial of payment by results for children’s centres. A further 18 councils will trial the system and test ways in which centres can be incentivised to support vulnerable families. This brings the total areas involved to 27.

Longfield said: "The payment-by-results approach has real potential to encourage and reward the excellent outcomes children’s centres achieve in their work with families.

"These trials will be crucial in establishing fair systems that are fully inclusive for all types of providers and incentivise continuing support for vulnerable families with complex needs."

source: Joe Lepper, Children & Young People Now

26th September

Payment-by-results 'the only game in town' for early intervention
Spending on public services and early intervention will not increase under a Labour government, the Labour MP who led a government review on the issue has warned.

Graham Allen, who has championed the cause of early intervention for several years, told delegates at a fringe meeting at the Labour conference in Liverpool that however unpalatable the concept may be, payment-by-results is the only way money can be raised, calling on party members to back the idea.

"If Ed Miliband becomes Prime Minister tomorrow, there is not going to be a great slab of public money to make these interventions," he said.

"We will be in a situation where we will need to be smart about how we raise money and this involves outcomes-based commissioning and payment-by-results.

"We have got to make sure it is not like PFI [private finance initiatives] for the sake of the children we represent.

"I would love to do all this with public money but the reality is it is not here with this government, or the next Labour government. [Payment-by-results] is the only game in town.

"To do the things we want to do for children we must explore other initiatives and not just hide behind the argument that it should be done with public money – that is a big cop-out."

Models for payment-by-results in different areas appear to be making some progress with pilots under way and research ongoing about how best to implement the system in different scenarios, such as reducing numbers of children entering care.    

Allen said Prime Minister David Cameron recently pledged to match every pound raised for the creation of an early intervention foundation, which will champion best practice, up to a maximum of £10m.

However, the concept has come in for criticism on both ideological and practical grounds.

Concern has been raised that those running schemes could go for easy returns, selecting children and families that have the highest likelihood of successful outcomes, while neglecting the most difficult cases.

Speaking at the meeting, which was staged by the Social Market Foundation, journalist and commentator Polly Toynbee criticised Allen for teaming up with Work and Pensions Secretary Iain Duncan-Smith to pursue payment-by-results models.

"Working closely with IDS and the Tories is a mistake," she said. "You end up being a fig leaf for what the government is doing, which is appalling."

She criticised the government for cutting the education maintenance allowance, family intervention projects and benefits.

"I think the social deficit being created here will be infinitely worse than the economic deficit. It will last from generation to generation, to generation."

source: Neil Puffett, Children & Young People Now

20th September

Allergy Alert - Sainsbury's recalls some Freefrom Pure Oats
Sainsbury's has recalled some batches of its own-brand Freefrom Pure Oats, as its testing has found low levels of gluten (wheat) in some packets. This is a potential health risk for individuals who are allergic or intolerant to wheat or gluten, as the labelling doesn't list this as an ingredient. The Agency has issued an Allergy Alert.

The product recalled is:

• Sainsbury’s Freefrom Pure Oats, 450g
• Best before date: July, August and September 2012

If you have an allergy to or are intolerant of gluten or wheat, you are advised not to eat the product.

The company has withdrawn all affected stock and recalled it from customers with an allergy or intolerance to wheat or gluten. Customer notices have been displayed in stores to alert consumers to the reasons for the recall, and if you have bought the product and have an allergy or intolerance to gluten or wheat you can return it to Sainsbury's for a full refund. In addition, the company has contacted the relevant allergy support organisations, which will inform their members who are allergic or intolerant to gluten about the recall.

No other Sainsbury’s Supermarkets Ltd products are known to be affected.

source: Food Standards Agency

19th September

Sarah Teather announces doubling of pupil premium funding
Sarah Teather, the children and families minister, has announced that funding for the pupil premium will double to £1.25bn as she unveiled a raft of announcements to highlight the role her party has played in government to ensure a "fair start for every child".

In a speech designed to showcase the party's influence on the government's social mobility policies, Teather announced funding for the pupil premium – a policy devised by the Lib Dems which gives extra money to schools for each pupil eligible for free school meals. It will double from £625m to £1.25bn in 2012-13. The rise is part of the coalition's overall plan to increase the funding pot for the pupil premium to £2.5bn by 2014-15.

She also announced a pilot scheme in four areas offering vouchers for parenting classes to all parents with children under five. The government compares these to antenatal classes which offer guidance during pregnancy. Teather said: "This is a direct response to the evidence that the home learning environment is the biggest single determinant of your child's future success. Where parents support their children to learn, the link between poverty and poor attainment can be broken."

The Lib Dem minister announced a consultation this autumn on the eligibility criteria for 15 hours of free early education for two-year-olds from disadvantaged backgrounds. The government expects that around 140,000 two-year-olds each year will be able to benefit from 2013.

She also announced government plans to allow parents and community groups to be more involved in running children's centres. Under the plans, local authorities would have the final say on whether projects would go ahead. She told delegates that the Lib Dems in power had begun to "tilt the playing field back in favour of those children and families who are falling behind". Teather underlined how the party had put the pupil premium – a key Lib Dem manifesto pledge – "at the centre of coalition negotiations" as well as ensuring it was protected in the spending review. "Children across the country will have a fairer start in life because Liberal Democrats fought for it and Liberal Democrats in government made it happen," she said.

While the pupil premium is a targeting of resources on the most disadvantaged, it is not good news for every school.

The premium increases the budgets of schools with a higher proportion of poorer children. But the education secretary, Michael Gove, has admitted that some schools will face budget cuts.

The number of schools that face cuts depends on how the pupil premium is allocated in future. If the terms of reference are drawn generously, fewer schools will face cuts.

The government has launched a consultation to determine who will be eligible for the funding and therefore how much it will be.

In England 17% of pupils are eligible for free school meals. They, and children who have been in care for more than six months, are allocated a pupil premium of £430 each. There is also a premium of £200 for children whose parents are serving in the armed forces.

The government says the pupil premium could be extended to include any pupil who has been eligible for free school meals in one of the past three years, covering 21% of pupils, or any pupil eligible in one of the past six years, covering 24%.

This would widen the scope of the premium and reduce the pressure on many schools' budgets. But that also means the extra funding will not be targeted exclusively at the most disadvantaged.

source: Hélène Mulholland and Jeevan Vasagar, The Guardian

16th September

Reading check for six-year-olds rolled out
Six-year-olds in England will face a new reading test next summer, after trials this year.

They will be tested on how they read using phonics, where children learn the sound of letters and groups of letters.

The government says nearly half of the teachers who took part in the trial said it had helped them identify children with reading problems.

But teachers' unions and the UK Literacy Association have been critical of the test.

A total of 300 schools took part in trials this summer.

At Elmhurst Primary School in east London, 120 pupils in Year 1 were checked.

Head teacher Shahed Ahmed described what happened.

He said children came out of their class one by one to look at a booklet of 20 simple words and 20 "pseudo" (made-up) words with their teacher.

"There were four to six words on each page and it took about five to seven minutes per child," he said.

"It's a quick check of children's phonic knowledge, not a reading test.

"We want to know that they can read the sounds of letters and blend them together."

The "non-words" used include "vap" and "vog". They are there, the government says, to check whether children can use their knowledge of phonics to de-code or work out words.

The results will be reported to parents and made available to Ofsted, the government and other schools.

The check is being introduced as part of the Westminster government's drive to get all primary schools to teach children to read quickly using phonics systematically.

All schools in England probably use phonics to teach children to read but ministers say that to be effective, the system must be used systematically, rigorously and early.

One in five pupils does not reach the level of English expected of them when they leave primary school.

Schools Minister Nick Gibb said: "There is no doubt we need to raise standards of reading. Only last month we learnt that one in 10 boys aged 11 can read no better than a seven-year-old.

"The new check is based on a method that is internationally proven to get results, and the evidence from the pilot is clear - thousands of six-year-olds, who would otherwise slip through the net, will get the extra reading help they need to become good readers, to flourish at secondary school and to enjoy a lifetime's love of reading.

"This study finds that the check will be of real benefit to pupils but takes just a few minutes to carry out, is backed by most teachers and is liked by most children."

Teaching unions agree phonics is a good way of teaching children to read but say it is one of a range of techniques used by teachers, who should be trusted to vary their methods depending on their pupils.

Chris Keates, the general secretary of the NASUWT said: "NASUWT research, among thousands of teachers, has shown that the clear majority disagree with the introduction of a compulsory phonics reading test for six year olds.

"Teachers oppose the test because it will not provide robust information about a child's reading ability.

"It is possible to pass a phonics reading test and still not be able to read."

The UK Literacy Agency (UKLA) is campaigning against the check.

It says phonics is the most effective way of reading many words, but cannot be used to read all words, for example "come" and "once", which require other techniques.

Greg Brooks, a former president of UKLA and Emeritus Professor at Sheffield University, says the check will inevitably become "high-stakes", leading to teachers "teaching to the test" and causing anxiety for parents and children.

source: Angela Harrison, BBC News

7th September

Childcare costs put parents in debt, survey concludes
Nearly a quarter of UK parents questioned in a survey by the Daycare Trust and Save the Children say the cost of childcare has put them in debt.

The survey of 4,359 parents found 58% had cut spending on other essentials like clothing, heating and other bills.

Nearly two-thirds said they could not afford not to work, but struggled to pay for childcare.

Four out of 10 families surveyed said the cost of childcare was on a par with their mortgage or rent.

The study suggests the cost of childcare has the greatest consequences for the poorest families.

Of those who completed the Daycare Trust and Save the Children questionnaire, 250 had an annual household income of £12,000 or less.

A quarter of these low-income parents said they had given up work and a third had turned down work because of childcare costs.

More than half (58%) of these families said they were no better off working and paying for childcare. This compared to just 19% of those with household incomes of more than £30,000.

And 61% of low-income parents said they were struggling to pay for childcare, compared with 37% of parents on higher incomes.

The survey found 47% had cut back on after-school activities such as swimming, compared with 22% of those with higher incomes.

Research by the Daycare Trust earlier this year found that 25 hours of nursery care a week in England for a child under the age of two would cost, on average, more than £5,000 a year.

In Wales it was about £4,700, while in Scotland parents faced an average nursery bill of £5,178 a year.

Kate Groucutt, policy and research director at the Daycare Trust, said: "It is unacceptable that parents are being forced into debt in order to pay for childcare.

"Our research shows that childcare costs have risen every year for the last 10 years.

"This, combined with the recent cuts to the childcare element of working tax credits, means that the financial burden on parents is greater than ever.

"With a quarter of parents surveyed in debt because of childcare, it is clear that, under the current system, work does not pay for many families."

The charities are urging the government to increase the amount they plan to spend on childcare support under the new universal credit.

Under this system, a single payment will replace child tax credit and working tax credit, as well as income-related jobseeker's allowance, housing benefit, income support and income-related employment support allowance.

A spokesman for the Department for Work and Pensions said: "The cost of childcare is one of the most important factors for parents when considering work, and ministers have always said that under universal credit they will invest at least the same amount of money into childcare as in the current system.

"We are working closely with the Treasury and other interested groups to ensure we get this right."

source: The BBC

6th September

Strain on parents' incomes spells uncertainty for extended services
One in ten breakfast, after-school and holiday clubs look set to close during the next school year and many others face uncertainty due to rising costs and pressure on parental incomes, a survey has revealed.

Extended service providers fear increasing financial pressures will put their settings at risk.

Almost a quarter of breakfast clubs, after-school clubs and holiday childcare providers fear for the future of services over the next academic year with rising costs and increasing pressure on parents' incomes, a survey by the charity 4Children has revealed.

The study of 492 extended services providers found that almost 10 per cent of respondents are at risk of closure during the next school year.

A further 15 per cent of providers are in limbo, unsure as to whether their service will be maintained because of uncertainty over future funding.

The survey found that demand for breakfast clubs, after-school clubs and holiday childcare schemes has dropped in 38 per cent of settings over the past year, with pressure on parents' incomes and unemployment cited as the two main factors fuelling the decline.

"It is very difficult to keep childcare affordable for working parents in the current climate," one provider warned. "Staff costs are rising again in October and food costs are high. To sustain the level of care we are offering at the moment may become difficult next year."

Asked to cite their main concerns for the year ahead, 66 per cent of providers said that a drop in parents' incomes will continue to pose a threat.

Half said they were worried about the rising delivery costs and almost 50 providers mentioned increasing numbers of academies and free schools as a concern.

A quarter said a waning emphasis on out-of-school activities could damage services, with 65 providers saying their school seemed to be ambivalent about provision and 11 describing their relationship with their school as negative or deteriorating.

One provider explained: "There are many worries this year. Last year, one school decided it would increase our rent from nil to £34,000 per year. Three of the other schools we work in have increased the rent by 66 per cent."

Another said: "Our rent will increase from September so sustainability has become a great concern. We will make a decision regarding closure at the end of winter term."

The previous government set a deadline for all schools to offer a full range of self-funding "sustainable" extended services by 2010.

According to the 4Children survey, three-quarters of extended services providers are operating without funding from their local authority and 95 per cent of extended services receive no funding from schools.

But of the providers that do receive local authority cash, 81 per cent are either facing cuts or uncertainty over budgets, while 59 per cent are losing a quarter or more of council funding in the coming year.

Providers in receipt of cash from schools are facing similar challenges. Of the five per cent of settings that do receive schools funding, 83 per cent are expecting to lose a quarter or more of their current income.

4Children chief executive Anne Longfield said that extended services have been partially protected from cuts, since so few are reliant on local authority or school funding.

But she warned of serious threats to the future viability of services because of "the unprecedented increase in running costs".

"Changes in local charging policy and moves to academy status are often the catalyst to this change, which runs the risk of putting many clubs out of business," Longfield said.

"Out-of-school clubs have worked hard to become self-sustainable, which has shielded them from the impact of local cuts.

"However, they have also followed government advice and encouragement to work in partnership with schools, which has often meant moving into school premises.

"Increased rental costs are therefore a bitter blow, which could put the future viability of some clubs in real question."

source: Lauren Hill, Children & Young People Now

2nd September

Parents warned of bunk bed dangers after four year old son dies
A coroner warned against the potential dangers of bunk beds yesterday after hearing how a four year old died after rolling of the matress in his sleep.

Daniel McGarry was found hanging between the bed and the adjacent wall.

The metal bunk bed had originally been fitted with barriers on both sides, but one was omitted when relatives re-assembled it at his home in Maryport, Cumbria.

Recording a verdict of accidental death, David Roberts said: “If there is a wider message to be passed out, it would be to check that bunk beds are properly constructed.

“Parents should also ensure that barriers are placed on both sides. They can’t rely on the wall alone being adequate protection to stop a child slipping down and falling from the bed”.

Despite his warning, Mr Roberts said that even if both barriers had been fitted in Daniel’s case he might still have become trapped.

The hearing in Workington was told that the bunk bed had originally belonged to one of Daniel’s aunts.

But when she passed it on to the child’s mother, Kerry Holding, the wall-side barrier was not fitted.

Relatives were unsure what had happened to it but thought that since the bed was pushed up against a wall any child using it would be safe.

On February 15 Daniel originally went to bed in his own room, but was later moved to the bunk bed.

Miss Holding went out at about 9pm, leaving her in the care of a 15-year-old babysitter.

She discovered her son in a collapsed state when she returned about an hour later.

Having pulled him away from where he was lodged against the wall, she carried him to a neighbouring house where Christine Scholey, a trained first aider, tried to resuscitate him while an ambulance was dispatched.

Despite further attempts by paramedics and doctors to revive Daniel, he was pronounced dead at the West Cumberland Hospital.

A post mortem examination determined the cause of death as hanging.

Mr Roberts said the child had probably rolled off the bed in his sleep and was unlikely to have suffered. He probably died quickly, he added, so the “valiant” efforts to save him were in vain.

Miss Holding said in a statement: “Daniel was my first son who I love dearly. He was a gorgeous little boy with his cheeky smile who everyone loved.”

She added: “I am still very devastated at the loss of my son."

Miss Holding endorsed the coroner’s warning, urging other parents to ensure that the barriers on their children’s bunk beds were secure”.

source: Nigel Bunyan, The Telegraph