Debate on support for single parent families, House of Commons, Tuesday 14th March

• Single parents – the majority of which are women (90 percent) – and their children are more likely to be in poverty than any other type of household, with 49 percent living in poverty (July 2022).
• It is the LGA’s view that the national benefit system should provide the primary safety net for all low-income households and cover people’s essential living costs, which will enable councils to target local welfare support to those with the most complex needs. Recent research released by the Joseph Rowntree Foundation and the Trussell Trust found that Universal Credit allowance currently falls £140 short a month of the cost of food, energy and other essentials.
• The cost of early years provision in the UK is among some of the highest in the world. Recent data from Nesta found that a two-earner family on the minimum wage is now paying a third of their post-tax income on childcare, while single-parents on the minimum wage spend over two-thirds of their post-tax income on childcare. Unaffordable childcare is placing a significant strain on household budgets, and is contributing to poverty, gender inequality and economic unproductivity.  
• While access to childcare is important for all families, it is particularly crucial for those on the lowest incomes, the most disadvantaged children, women and single-parent families. Childcare enables people to work; increase their hours and take on training opportunities, which is vital to enable families move out of poverty and improve their life-chances.
• The unaffordability of childcare is holding parents back from entering the workplace. ONS data from February this year shows that the number of women not working so they could look after their family increased by 5 percent, the first sustained increase in at least 30 years. In total, an estimated 1.7 million women are prevented from working the hours they would like to due to a lack of suitable childcare, resulting in up to £28.2 billion of lost economic output each year.
• A more accessible and affordable childcare offer would offer significant socio-economic benefits for families and wider society. Ahead of this week’s Spring Budget, we are calling for: 
  • The universal credit cap on claiming for childcare costs – which has remained the same since 2005 despite the cost of childcare soaring (more than doubling in London) – to be increased in line with inflation and for claimants to be paid childcare fees upfront – rather than in arrears. 
  • The Government to adequately fund early years entitlements to cover the cost of provision and enable providers to recruit and retain skilled early years practitioners. 
  • Government should also consider expanding the additional 15 hours of free childcare to all three and four-year olds, to ensure the most disadvantaged children have equal access to quality early education.
• Community support for single parents is vital. We welcome the Government’s funding for best start and the Family Hubs Programme and want to see Family Hubs rolled out to every area so that no family or child misses out.

Single parents have been particularly impacted by the rising cost of living. A Which? Consumer Insight Tracker found that three in 10 single-parent households surveyed had skipped meals due to high food inflation, compared to one in seven in dual parent households.

Councils and local partners have delivered remarkable services and support and will continue to do what they can to protect people against the rising cost of living. The LGA is working with councils to take a cross-cutting approach to address all cost-of-living pressures, bringing together services including health, housing, welfare, social care, employment, transport, libraries and education. Our cost of living hub contains case studies, resources and data to share best practice and help councils support their residents. However, we want to work with government to ensure we move from crisis support, towards improving life chances and building long-term resilience.

In April 2023, benefits and the Benefit Cap will be increased in line with inflation, and cost of living payments have been extended to help those on the lowest incomes with higher prices. While this will help to ease some pressures, these measures do not tackle the fundamental issue of the basic benefit rate not covering the true costs of living.

Unaffordable housing costs are also pushing many households into poverty, which is compounded when people fall into rent arrears. Beyond April 2023, the Local Housing Allowance (LHA), which determines the amount of housing benefit private renters receive, will remain frozen at its March 2020 rate. This is despite rents expected to rise further this year. LHA no longer covers the cost of renting a modest two or three-bedroom homes in 91 per cent of England, with an average shortfall for a two-bedroom home of £547 a year.

To help lift single parent families out of poverty, Government must ensure the national benefits system meets households essential living costs. We are also calling for LHA rates to be re-aligned with the 30th percentile of local rents and linked with rental inflation going forward.

The LGA has long highlighted that the national funding for early entitlements is insufficient, which is resulting in higher costs being passed on to families. Data from the Institute of Fiscal Studies (IFS) found that the cost of a part-time nursery place for a child under 2 grew by 60 percent in cash terms between 2010 and 2021 – twice as fast as average earnings, and much higher than the 24 per cent growth in overall prices in the same period.

At the 2021 Spending Review the Government announced an uplift in early entitlement funding (£160 million in 2022-23, £180 million in 2023-24 and £170 million in 2024-25 compared with the figure for the 2021-22 financial year) for local authorities to increase the hourly rates they pay to childcare providers. However, IFS analysis shows that higher than expected inflation has undermined these increases. Real-terms funding will be 8 percent lower in 2024-25 than 2021-22, and providers will face a 9 percent cut in funding if taking into account their rising costs.

In addition to the universal offer of free childcare, working households who are in receipt of Universal Credit can claim back up to 85 per cent of their childcare costs up to a cap of £646.35 for one child, or £1108 for two or more children, per month. The cap on the childcare costs benefit claimants can claim has remained at the same level since 2005, despite the cost of childcare soaring (and more than doubling in London). Research by Coram and Family Childcare has found that in 99 per cent of local areas, the average price of a full-time nursery place for a child under two is higher than the maximum costs supported through universal credit and the benefits system. At this week’s budget, the Chancellor should ensure the cap is increased in line with inflation.

Claimants are currently required to pay their childcare costs upfront and then claim them back. This is a significant financial barrier to parents entering or continuing employment or increasing their hours. It can also cause families to go into debt to cover the first payment. The LGA is urging the Government to pay the Universal Credit childcare element before fees are required to be paid to the provider. There are several ways this could be implemented with mitigations against fraud, for example through a system of direct payments to childcare providers, similar to the system for Tax Free Childcare.

Currently all three and four-year-olds are entitled to 15 free hours of early education or childcare per week. Since 2017, families that earn over £152 a week have also been entitled to an additional 15 hours of free early education or childcare. However, the offer is not available to children from families on the lowest incomes (earning under £152 a week).

There is a significant body of evidence which demonstrates that the first four years of a child’s life plays a seminal role in their overall life chances and that early education has almost as much impact on a child’s education achievement as primary school. To close the gap between disadvantaged children and their more affluent peers, the Government should consider opening up the additional 15 hours of free childcare to all three and four-year olds to ensure they have equal access to quality early education.

Children’s centres and other community-based services provide a lifeline to parents. Department of Education research found that children’s centres are linked to improvements in parental wellbeing, family relationships, and child development, particularly among disadvantaged families

Although these services have been impacted by cuts to local government funding, councils are still finding ways to deliver these services and make a huge impact on people’s lives. We welcomed the Government’s investment in best start and the Family Hubs programme, to help areas reinvest in community-based family support. Family Hubs provide open access and outreach services for families with children aged 0-19 and for children with special educational needs and disabilities aged 0-25. They bring together and deliver a broad range of services through a single access point, and can provide early help with social, emotional, health and financial needs.

However, national funding for Family Hubs has only been rolled out to half of all local authority areas. To ensure no child or parent misses out on vital support, we are calling on Government to extend this funding to every area.

Megan Edwards, Public Affairs and Campaigns Advisor, [email protected]