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28th Nov 2023
Posted 7 March 2023
With Jeremy Hunt due to announce his Budget in Parliament on 15th March, we have seen some welcome attention in the media on the costs of childcare in recent weeks, and rumours that the Chancellor is set to act. We’re outlining the crucial measures which he could take to support single parent families.
Work and Pensions Secretary Mel Stride has been undertaking a review to find ways to reduce the number of people who are ‘economically inactive’. He and the Chancellor would do well to read our recent report on single parents and employment, which highlights that if Government want to make sure fewer single parents are ‘economically inactive’, action on childcare is a must.
As a minimum first step, Gingerbread wants to see a change in the childcare support element of Universal Credit (UC).
In theory, most parents on UC can claim support for childcare to cover up to 85% of the costs of childcare. However, this is capped at £646 per month for one child and £1,108 for 2 or more children and is paid in arrears to the claimant. This means parents need to pay fees to their childcare provider upfront and wait to get the money back. We know that this can be an impossible hurdle for single parents – many of whom will be unable to find the money to pay the upfront fees or struggle to fill the gap between the payment provided at a level capped in 2005 and the actual cost of a childcare placement in 2023. As a result, our research shows that single parents are forced to turn down roles or struggle financially and go into debt to cover the costs.
Providing a new mechanism for payment of childcare costs upfront for those on Universal Credit and increasing the level of the payment cap, so it genuinely reflects today’s costs of childcare, is therefore vital. This could be transformational for single parents, enabling them to enter, stay and progress in work.
More widely, it is clear that wholesale reform is needed to secure affordable, high-quality childcare, to enable single (and couple) parents to make genuine choices on work and care. Childcare that meets the needs of single parents will need to be available during the holidays and before and after school as well as for those who may need it while studying or training and crucially it has to be affordable for all.
Other support for single parents seeking work
Our report on employment also made clear the importance of action from Government and employers so that the regulatory environment and culture in workplaces is much more open to flexible or part-time roles at all levels in a workplace and all sectors across the economy.
The Government has previously announced their intention to change the law on flexible working, giving workers the right to request flexible working from day one. We are calling for this change to be implemented as soon as possible. We would also like to see new legislation that would require all roles to be advertised as flexible, unless there is a good business reason not to. We will be looking out for any further incentives in the Budget to encourage employers to offer more flexible or part-time roles.
Sanctions and conditionality
Our research shows that single parents want to work, and want to work more hours than they currently do. They don’t need additional pressure to find work or secure increased hours at work, or sanctions on them if they don’t comply. The Government needs to concentrate on removing the barriers to work for single parents, rather than on imposing harsher requirements on them.
Cost of Living Crisis and Welfare Reform
Single parents are disproportionately affected by the cost-of-living crisis. As an example, on fuel poverty, Government data shows that 26.4 per cent of single parent households were fuel poor, compared to 17% of households with couple parents and children. That’s why we supported Martin Lewis’ campaign to postpone the Government’s 20% increase in energy bills on 1 April. We’re delighted the Government has listened and that the Energy Price Guarantee is set to be extended for a further three months preventing an additional 1.7 million people from being pushed into fuel poverty.
As well as taking action on energy prices, we will also be looking to the Budget for any further actions from the Government that will help alleviate rising costs for single parent families. Following the recent actions of the London Mayor Sadiq Khan, this might include and expanding the provision of free school meals.
To target support to those who are struggling the most, reform to the benefits system is vital. We welcome the announcement in Autumn Statement that benefits and the benefit cap will rise in line with inflation. However, the local housing allowance (LHA), which determines the amount of support with housing costs that private renters can receive, was excluded from this announcement and has been frozen since 2020. As rents soar, it is essential the Chancellor addresses this in the Budget.
More widely, analysis by the Child Poverty Action Group shows that the biggest changes the Government could make to tackle child poverty would be to reform Universal Credit by scrapping the two-child limit and remove the benefit cap.
With 49% of children living in single parent households in poverty and with the cap disproportionately impacting single parent families, unless the Government takes action on welfare payments, we fear that this is only set to rise. Already, we are hearing more cases through our helpline of single parents going hungry and not heating their houses as they simply can’t make ends meet.
If the Government is serious about prioritising help for those who need it most, it is vital that the Budget is used to get rid of the cap and the two-child limit.