Government considering introducing childcare loans.

[Haziedoll]

Apologies in advance for not providing a link, I'm on my phone.

"The SMF think-tank has come up with a proposal that suggests a national childcare contribution scheme in which parents earning more than 12K could request a lump sum to be paid monthly through the tax system over an extended period and at a low interest rate. The report gives the example of a family paying £7,800 for childcare over three years. Under the scheme, their repayments would fall from £50 a week over three years to £14 a week over 11 years." - The Times 8/2/12.

It sounds a fantastic idea, probably too late for us because they are considering trial areas first. My career had to be put on hold as childcare costs were too expensive, we have suffered financial hardship because of our decision to have children and I know lots of families are in the same boat.

Such a scheme will give women an actual real choice as to whether they want to continue with their careers or not. Not all SAHM's are at home because they want to be, my commuting costs and childcare costs were higher than my monthly salary despite having master level qualifications and over 10 years experience.

I'm liking this proposal very much.

in some ways i think its a good idea. but isn't there a danger that people just get into masses of debt - student loads, mortgages, car loans, and now childcare loans?

I would prefer it if people were paid a living wage instead of adding yet another debt to all the others

or make childcare more affordable

The only thing that will happen is childcare providers will hike their prices up, like they did with the voucher scheme. Only shareholders will benefit from such a scheme, as usual!

I think it sounds desperate. The best anyone can offer me in terms of childcare help (which takes well over half my household income) is an interest-accumulating loan? We are so far from being Scandi on this issue that it's embarrassing. Good if it would help the OP but otherwise ...grrrrr.

But how do you help make childcare more affordable? The government are never going to throw their own money at it.

I was actually on a decent wage (£27k) a few years ago but childcare and commuting costs still meant that I would be working for nothing.

They are keen for this not to be seen as a loan because in practice it will work along the same lines as the the new student tuition fees loan which means that it isn't ordinary debt, paid by taxation etc.

I appreciate it isn't for everyone but I would have jumped at the chance. I'm self employed at the moment and won't earn anything until my youngest starts school. If this scheme was in operation now I could afford childcare and concentrate on the business properly.

OP, governments all over Europe who are far more sensible than we are actually do 'throw their own money at it'. In Scandinavian countries as well as in the Netherlands, childcare is very heavily subsidised by the government, so that parents can keep their careers on track. Yes, they pay a lot more tax over there, but you actually get something back for it. Whereas here it seems to get given to bankers instead...

This idea is just another sticking platers over a hole the size of Manchester.

'Plaster', even.

It'd be better than nothing - IF there was a way of making sure nurseries didn't just stick their prices up. But agree with pointy and anyfucker - the sensible long-term solution which would be far better for families and more efficient for the public purse would be to make childcare affordable, either through more equitable distribution of wages or through subsidised provision.

By distribution of wages, I mean the situation where over the past 30 years middle-earners have been squeezed and the poor hi,t while those at the top end have got richer and richer. The share of national income for the rich has spiralled out of control. The proceeds of economic growth (when we had any) have not been shared fairly according to contribution or any reasonable social contract.

Tax is the thing though. Belgium, like the Netherlands, offers subsidised and tax deductible childcare. But we pay LOADS more tax.

We will never have a system like the Scandinavian countries because lets face it a large proportion of the British public would be happier if the benefit cuts were even more drastic, there is no way the general public would support higher taxation to pay for the childcare of other peoples children. That's the way this country is going now I'm sad to say.

As Edam said it's better than nothing and from a personal point of view it would make a massive difference to my families finances and my long term earning potential.

As long as it isn't a first step to withdrawing the 15 hours a week free childcare for 3 & 4 (and some 2) year olds!

Oh, come on. What a fucking stupid idea.

Who pays the loan off when one parents walks away from the relationship? Most NRP's pay no child support as it is.

Cynical view Lagrandissima, but it wouldn't surprise me. A recent report cites that the introduction of free nursery provision has not made a difference to the key stage 1 tests at age 7. They have remained static for a number of years. Free nursery provision will be next for the chop,

Yes, stupid idea.

My expensive full time childcare years are coming to an end in July; youngest at school in September (hurrah!).

I'd still much rather pay higher tax to provide decent subsidised childcare, so that expensively trained parents don't jack in their careers, often for too many years to get back in, as soon as they have their second child, if not their first.

Having instead an interest paying loan may be helpful to some individual families (which is not to be sniffed at, I quite see that) - but not great for society as a whole...

LineRunner makes an excellent point.

That is a good point LineRunner. I'll have to try and get hold of the full report to see the recommendations. I guess it is the individual who opted to have the loan paid through their salary, but how do you make that decision? Childcare should after all be a joint responsibility. The individual has to have a gross salary of at least £12k pa. You can't clear off and do a runner because it would work in exactly the same way as student loans, PAYE and in some cases some people will never repay the loan.

If it's the Social Market Foundation, aren't they a right-wing think tank? So not that keen on being fair to lone parents. Probably quite happy if the mother is landed with a £12k loan to pay back all on her own while the father fecks off and doesn't bother paying a penny towards his children, let alone contribute to the loan. (Before anyone jumps on me, I am NOT saying all men are evil or anything, but lone does have a point - a lot of men don't pay child support and they are hardly going to take their fair share of childcare loans either.)

Sorry, line has a point, not lone!

OTOH, perhaps we could support this idea if all such loans were put into the child's father's name.

edam - if they are right wing would they not be biased towards the parents staying married and if they did separate both of them paying to support their families rather than becoming dependant on the tax payer? Surely the 'fecks off and doesn't bother paying a penny' is more the labour party ethos?

'fecks off and doesn't pay a penny' is the stats, sadly. The majority of NRP apparently pay nothing.

It would be wrong to leave the RP with an additional financial burden to shoulder alone.

People are in trouble because of encouragement to borrow money from various quarters, combined with wage erosion and now a recession.

The govt are always banging on about how people shouldn't borrow too much money but with massive uni fees, terribly expensive housing stock and living costs and wages that aren't enough to actually live on for large swathes of people, this suggestion just seems ridiculous.

Linerunner's point is an excellent one as well.

dreamingofsun the tories want to introduce a levy on RPs using the CSA, and then take a % of any money actually obtained.

So they don't seem that keen on helping people get money for their children from the other parent.

I think part of the problem is this insistance some women have of attributing all child-care costs as an offset of their salary instead of as a shared cost to the household. The "It's not worth me going out to work" argument. The family holiday or the bank loan for a new kitchen might impact the household finances but you never see anyone saying that because they're paying off the HP on the new family car it's 'not worth me going out to work'. They share the cost. A loan to pay for childcare might be an opportunity for some but my fear is that the person who would see themselves as responsible for paying it back would be the mother.

I see your point Cogito and I think it really depends on the state of the families finances. If one partner earns considerably more than the other and there is money left over at the end of the month it is only fair to share childcare costs. In our case every penny is accounted for, at the end of the month there is no "spare" money for treats or savings so it's neither here nor there whose salary pays for the childcare as it doesn't make any difference.