BlogChildcare Reform in the New Budget – Where does it leave Employers?

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For anyone interested in working parents there is no doubt this has been a big news week writes Andy Philpott for HR Magazine (21/3/13). Yesterday was dominated by the announcement of a new childcare voucher scheme that will allow households where both parents are in employment to claim up to £1,200 per child towards the cost of childcare.
Today, the analysis and commentary on the working parents who will be the winners and losers is still in full flow.
But what about employers?
Among all those words written and spoken so far, there has been scant mention of what the impact will be on organisations who currently provide support for working parents through a childcare voucher programme. Less so for those who might be thinking of reviewing or planning to strengthen their support for what is unanimously seen as a vital but embattled group of employees.
The first thing employers need to know is that none of the new arrangements will come in until Autumn 2015 at the earliest.
Until then the existing arrangements for childcare voucher provision that rely on salary sacrifice and voucher schemes will stay in place. Even then, despite reports in some areas in the media, the existing childcare vouchers scheme will remain open for those who have signed up before the new scheme starts.
Where there is still some uncertainty is around the role of employers in the new scheme and here it is possible a new system may exclude employers.

This, along with all the other details, is still to be finalised as part of the consultation which is now underway.

So what should employers be doing now?

The first thing is to think about how they need to react to these changes in relation to working parents in their organisations.

From what has been announced, it is clear the existing childcare voucher scheme will offer better value to a number of parent groups. Households with a stay at home parent will be less well -off under the new scheme as will parents with children over five years old who will be locked out of the new scheme initially – the current scheme helps those up to the age of 16.

Clearly then there is an opportunity to help employees first by clarifying the impact the changes will have on them and then by helping those who can take advantage of the existing arrangements before they change.

The second thing is to engage with the consultation on the future of the voucher scheme. Our view at Edenred is that employers have a key role to play in any future scheme, especially in validating the eligibility of scheme participation and communication. We know that providing quality support for working parents is a key issue for many of the organisations we work with so it is only right that employers have their say in their future involvement in any scheme.

As the debate raging in the papers today testifies, this is a sensitive issue and one that has the potential to make a big difference to working parents. If there is one thing you can guarantee, it is that the working parents in your organisation will wondering what this all means for them so at the very least it demands some careful thought and clear communication so parents can work out what is best for them.

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