As part of the Government's ten-year childcare strategy, the DfES and the London Development Agency (LDA) are working together on a childcare affordability programme to support up to 10,000 childcare places, targeted at the most disadvantaged areas of the capital to help parents on low incomes to stay in or return to work.
Childcare costs in the capital are far higher than in the rest of the country and in inner London - an area with a population comparable to Wales - 54 per cent of children live in poverty.
The new grant will go direct to providers who are offering full daycare for children aged from nought to five, and who will be contracted to provide affordable places. The programme will be rolled out across all the London boroughs from 2005 to 2008. The amount of funding available has not been specified, but it will come from the LDA and will be partially met through Sure Start from 2006.
Denise Freeland, senior childcare manager at the LDA, said 'The cost of childcare is as much as 25 to 40 per cent higher in London than the national average. Parents in disadvantaged areas just cannot afford to access quality childcare.'
She added that the initial costings already made for the childcare affordability programme would be reworked to take into account the increases to the childcare element of the Working Tax Credit, announced in the Government's ten-year childcare strategy earlier this month.
Ms Freeland said that while parents across the country would benefit from the tax credit increase, the aim of the childcare affordability programme was to proportionally make childcare more affordable and accessible to families in the capital.
It is envisioned that the scheme will work in a similar way to the Neighbourhood Nurseries Initiative, so that providers who want to take part in the programme will have to meet certain criteria and offer a certain number of places to fulfil the needs of the most disadvantaged families.
The LDA is the lead agency for delivering the mayor's London childcare strategy and is also the lead regional development agency for childcare in England.
It is already committed to providing more than 3m in investment for childcare in 2003 to 2005, mainly in gap funding for the capital's Neighbourhood Nurseries.