Association (CPVA), which recently lost a Supreme Court case against the
Government on Tax-Free Childcare
Why did the CVPA take the Government to court over its plans to introduce Tax-Free Childcare?
The CVPA issued a claim for judicial review of the Government's decision to award the contract to National Savings & Investments to administer the new Tax-Free Childcare scheme. We contested that the contract was awarded unfairly and should have been subject to an open tender.
The action was launched to protect parents' access to a choice of suppliers and the cost disciplines and service innovations that competition between suppliers naturally generates, which has been evident in the childcare voucher programmes.
What did the court decide?
The case has been through the High Court and Court of Appeal, and this month the Supreme Court, which rejected the CVPA's appeal; it also lifted an order that had previously prohibited the Government from implementing the new Tax-Free Childcare scheme.
What is the likely impact of the ruling on childcare providers, employers and parents?
Since the ruling, the Government has announced that the implementation of the new scheme will be delayed until early 2017. This means that childcare vouchers will still be open to new entrants for a much longer period than previously expected and provision will temporarily remain unchanged. Our research shows that 66 per cent of households will be worse off under the new scheme, so childcare providers should encourage parents to sign up to childcare vouchers while there is still a chance. This is also an opportunity to offer information and help parents prepare for the change.
Employers manage the administration of childcare vouchers, but parents will need to take full responsibility for managing Tax-Free Childcare. There are currently no Government-led plans to introduce any way for employers to support parents under the scheme.
The impact on parents is, first and foremost, choice. Once Tax-Free Childcare is live, there will be no further opportunity for parents to sign up to childcare vouchers, giving no choice of the provision best suited to them. Parents must seek advice and enrol now to have the choice later.
Will the CVPA appeal against the court's decision?
The CVPA has responded to the Supreme Court ruling, accepting the judgment.