Major boost for childcare is a winner for families

Parents are the big winners from this year's Pre-Budget Report, with boosts to the finances and increased access to care for those with babies and young children.

Chancellor Gordon Brown confirmed a whole raft of benefit increases and funding to improve childcare provision - many of them already announced several times in the past.

He extended paid maternity entitlement from six months to nine from April 2007. The government says this could help reduce postnatal depression, infant mortality rates and the number of babies with low birthweights, while increasing breastfeeding and preventative health care.

The government plans to increase paid leave again to 12 months by the end of the next Parliament and to introduce legislation to enable mothers to transfer a proportion of this to the child's father.

It admits that young children generally benefit from parental care, but stresses that paid work is the best route out of poverty.

Ministers believe this has knock-on benefits, such as improved educational achievement when a child is older and a better understanding of the link between educational achievement and fulfillment in later life.

That is why many of the changes are designed to help parents to get back to work by making childcare more affordable.

The childcare element of the Working Tax Credit - claimed by 340,000 families - will increase in April from a maximum £135 to £175 for one child. The maximum will rise from £200 to £300 a week for bigger families.

The proportion of childcare costs parents can claim will rise from 70 per cent to 80 per cent from April 2006.

About 250,000 single parents will be offered a £40-a-week bonus in their first year of returning to work.

The national minimum income guarantee for a couple with one earner and one child will rise to £258 a week, and £199 a week for a single parent with one child. This is equivalent to £12 a hour.

The government will ensure that all three and four-year-olds get 12 hours a week of free early education and childcare from 2006, increasing to 15 hours a week by 2010.

Childcare at a price will also be offered by schools on weekdays, both during term and holidays. The government says all families with children between five and 11 should have access to school-based care by 2010. Half will benefit by 2008.

Secondary schools will be open from 8am to 6pm on weekdays all year round, offering a range of activities, and one third of them should be offering this by 2008. Demand for more formal childcare for 11 to 14-year-olds is to be tested in a small group of schools.

Existing school-based childcare services charge about £60 a week. Stephen Burke of the Daycare Trust charity says fees may vary when the schemes are extended, depending on costs and subsidies.

Gordon's Isa tonic

Cach welcomes the Chancellor's decision to encourage saving by postponing plans to cut the annual limit for saving in Isas from £7,000 to £5,000. The annual limit for cash Isas will stay at £3,000, rather than £1,000. The levels were due to fall in April 2006 but the government is now to consult the public and interested groups on keeping them higher until 2009.
Maria Scott