The report Little Britons: Financing childcare choice, by think-tank Policy Exchange, calls for a Parental Care Allowance to be the principal means of funding for families with children from birth to three (see News, page 4). This recommendation of a universal payment to follow the child, whether the parents are using formal or informal childcare, working or at home, is certainly radical.
The proposal has some attractions in terms of making it easier for parental leave to be extended, freeing funding from the requirement to be in work.
However, there are also drawbacks. The PCA scheme would be very expensive, and Policy Exchange advocates paying for it by scrapping childcare tax credits, vouchers, Sure Start maternity grants and eventually the free early years entitlement for three- and four-year-olds. Thus, the policies aimed at helping children out of poverty and providing quality nursery education would be scrapped in favour of a non-means-tested payment.
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