21st July 2026
Hopes raised for additional childcare support – but will it ever be implemented?
Childcare is becoming more and more expensive as the childcare sector continues to be hit with rising input costs, from the increasing costs of oil and gas to the increases in the National Minimum Wage and employer National Insurance costs.
With this in mind, any Government announcement that could bring about increased financial support for parents or direct support for childcare providers raises the hopes of working parents who are struggling with the cost of childcare.
Increase in Universal Credit childcare support
In last year’s Budget the UK Government announced an extension of support through Universal Credit for childcare costs associated with the third and any subsequent children in a family.
The current Universal Credit support for childcare only includes two possible amounts of support, a maximum amount of support for 1 child or a higher amount if you have 2 or more children.
This means that larger families, including those with children of a multiple birth such as twins or triplets, are capped at the 2 child amount of childcare support through Universal Credit.
The budget states “The government will also support working families with three or more children by increasing the maximum amount of childcare costs they can claim in UC.” (Para 2.18)
And then further states “The maximum amount that can be reimbursed for childcare costs for eligible Universal Credit claimants will increase by £736.06 for each additional child above the current maximum cap for two children.” (Para 4.18)
This would make a huge difference to working families with more than 2 children in childcare and would help to encourage parents of larger families to work or increase their working hours.
Free childcare for non-working parents
In early July, the then Education Secretary Bridget Phillipson delivered a speech in which she laid out her vision to extend the Government funded childcare in England to families where parents are not working.
She stated she wants to extend the funded childcare to “families who cannot afford quality childcare, because they aren’t working, or aren’t working enough to qualify.”
She continued; ”…many are struggling to work precisely because they cannot afford quality childcare, stuck in a loop that serves nobody, and the children least of all.
So, by extending government-funded childcare into these communities, not only would we be supporting parents into work, not only would we be supporting disadvantaged children with quality early years, but we would no longer be cutting off those families from society, no longer fostering disengagement, with parents in work and children in childcare.”
How could this affect Northern Ireland?
Changes to Universal Credit in GB are generally carried over into NI legislation and therefore we could reasonably expect the increase in UC childcare support to be implemented here.
However, in Northern Ireland we do not have the same free/funded childcare model that exists in England, the additional targeted funding that this proposal would entail would have a direct impact on the funding here in Northern Ireland through the Barnett Consequentials.
In the past some of the funding through Barnett Consequentials has been used to support working parents through the Northern Ireland Childcare Subsidy Scheme. This scheme gives a 15% discount on childcare costs. However, this is restricted in its targeting, not only to working parents, but only those working parents who are also using the Tax-Free Childcare scheme.
Therefore, working parents on a low income who are claiming Universal Credit and parents who are not in work, are unable to access the discounted childcare through the NI Childcare Subsidy Scheme.
If something similar to this proposal were to be introduced in NI it would mean a significant shift away from the current approach which supports working parents only.
Recent changes in Government
Since these announcements were made, we now have a new Prime Minister, in Andy Burnham, and he is currently selecting his Cabinet Ministers.
We hope this change in Government will mean there will be some positive movement that will bring about the implementation of additional support for both childcare providers and for parents who are paying for registered childcare.