Whilst Gingerbread welcomes the Universal Credit childcare component increase and upfront payment, there are serious issues with the conditionality components of last week’s Budget that leave us concerned about the way single parents will be impacted.

The expansion of free childcare provision, which may appear on the surface to be a win, is so steeped in conditionality and excludes those in training or not working ‘sufficient’ hours, that it reduces parental choices and further embeds inequality. Single parents are already forced to live in poverty and sanctions and removing choice is of benefit to no one. Instead of penalising single parents, the Government should be supporting them back into appropriate, flexible work.

Universal credit

We have long been calling for increased and upfront childcare payments under Universal Credit, and we are pleased that the Government has finally listened, increasing the amount of support for childcare costs (to 83% of the national average full time nursery fees). Crucially, this will now be paid upfront instead of in arrears.

Good news for single parents?

In our Single Parent Employment Gap report, some single parents talked about the upfront cost of childcare as a barrier to them moving into work, including the difficulty of childcare costs being paid in arrears under Universal Credit – so upfront payments remove that barrier.

A greater proportion of childcare costs can now be covered by Universal Credit, which should leave some eligible single parents better off.

Limitations and issues for single parents:

• This increased payment only represents 55% of the average nursery fees in inner London, meaning some single parents will still be left to foot a hefty childcare bill. As Gingerbread understands, there are no plans to introduce measures to address the regional variance in nursery fees.
• Whilst the childcare cap is being increased (for the first time since 2006), it’s not going to increase with inflation, so we can anticipate it covering less and less of childcare as the years go by and costs increase.
• Only 14% of eligible single parents currently access Universal Credit childcare payments. Whilst the increased payment and the fact it’ll now be upfront will increase uptake, many parents will still not be able to make use of it because it can only be utilised with Ofsted registered providers (a lot of after school and school holiday clubs or care providers are not Ofsted registered.) The Government have introduced grants to incentivise Ofsted registration amongst childminders, however issues with childcare provision remain which will not necessarily be addressed by UC and expanded provision of free hours (see below). There needs to be enough good quality, local childcare provision for people to access. Some childcare providers currently have long waiting lists, and there are also issues with recruitment and retention of staff in the sector – these things won’t be alleviated by Budget measures.

Wraparound care

Gingerbread welcomes the Budget’s recognition of the importance of wraparound childcare. Many single parents tell us that the high cost of childcare influences their decision to only look for work for the minimum number of hours required (16 or 25 hours a week), to fit into school or nursery hours without any additional childcare. The Government will provide funds to schools with the expectation that they will introduce before and after school care options, from 8am – 6pm every weekday during term time.

 Good news for single parents?

In-school childcare for school age children means that single parents will have more flexibility in terms of when they can start and finish work. It also alleviates some of the stress and pressure of finding appropriate after school care outside of a school setting – something which is particularly hard for parents of young teenage children.

Limitations and issues for single parents

• The responsibility for wraparound care has been placed with schools, and it has been made clear that once funding stops, they will be expected to sustain the 8am – 6pm provision. Given funding issues schools currently face, this is concerning.
• School holidays are still not covered by this wraparound care and remain a huge childcare gap. Single parents have expressed how stressful it is trying to sort out school holiday childcare, with some even being forced to quit jobs ahead of the summer holidays in order to care for their children.
• Single parents who work in schools will now potentially be required to work longer days, for no more pay.
• Employers may now be less flexible in terms of working hours for parents of school age children under the assumption that children can be in school from 8-6pm. This is a long day for children and there may be many reasons, including personal choice, why parents may want to collect their children from school earlier than this.
• As with the free hours provided by nursery, this measure doesn’t account for the fact that some single parents work weekends or shift work – these people have to rely on informal childcare, or pay out of their own pocket.

Free hours

Gingerbread welcomes the expansion of free hours as a demonstration by Government that childcare is a vital part of our social infrastructure and should be a priority. Eligible working parents in England will be able to access 30 hours of free childcare per week, for 38 weeks of the year, from when their child is 9 months old to when they start school (from September 2025). On the surface this is momentous, but there are some concerns and limitations.

Good news for single parents?

For some single parents, especially those who are not eligible for Universal Credit childcare support, the expansion of free hours, is significant, and will save them money. For a parent with a two-year-old using 35 hours childcare every week, it offers a package worth around £6,500 and reduces childcare costs by nearly 60%.

Limitations and issues for single parents:

• The eligibility criteria have not been published yet, but if they mirror those currently utilised, some single parents will not be able to access the full 30 free hours (all will be entitled to the 15 hours). Currently, people aged 23 or over, must have an income of at least £1,976 over a three month period in order to be eligible for the 30 free hours. This represents working at least 16 hours at (or above) National Living Wage.
• Shortfall of funding means that there are concerns about how this policy will be delivered. Funding represents a 7.5% uplift, but since 2018, the early years sector has already absorbed a 13% real cut.
• Restricting eligibility for full 30 hours to working parents’ risks embedding inequalities for future generations (WBG analysis).
• The increased free hours will not be available for single parents in training, such as those training to become nurses or teachers. This limits the ability of single parents to train or retrain and can result in them being forced to take jobs that they do not want to in order to access childcare.
• The changes still do not provide all year-round childcare (38 weeks per year). Universal credit claimants can use their childcare funding to top up care with an Ofsted registered provider, but it is unclear how well this hybrid approach would work in practice.

Sanctions and conditionality

We are concerned that the Chancellor also announced stricter requirements on parents to seek work or increase their hours as a stick to the carrot of advance payments and increased childcare provision. A five-year academic study of welfare conditionality published in 2018 found that not only were sanctions ineffective, but they also impacted on people’s wellbeing and pushed them further into poverty.

By pursuing tougher sanctions and increasing conditionality, the Government is effectively pressurising single parents into low-paid, low skilled and precarious work in order to access childcare support.

Underemployment is a massive issue for single parents, and this will be exacerbated by measures outlined in the budget. Our Employment Gap report shows that 15% of single parents are currently underemployed, compared with 8% of couple parents. For single parents, work is not just important for financial reasons, it can have wellbeing benefits (for some this will be their main source of interaction with other adults) and many single parents have told us they want to work to be a role model for their children. As such, single parents shouldn’t just be pressurised to work in jobs that don’t work for them. The DWP’s new requirement that claimants have to be available for work (which usually means any paid work at the national minimum wage) on a full-time basis when their child turns three will give single parents no flexibility to look for jobs which really suit their skill sets, motivations or family circumstances.

The changes in the Budget mean that more single parents are going to be coming into contact with Job Centre Plus work coaches (for parents of children aged one, this will now be every three months as opposed to six, and for parents of children aged two, this will now be monthly, as opposed to quarterly). Further, those who working under the required 18 hours, will be expected to have weekly work coaching. Our recent employment report stressed the importance of work coaches having an understanding of single parents and their needs, with work coaches currently failing to take specific constraints single parents may face into account. Changes to the Administrative Earnings Threshold are anticipated to mean that an additional 100,000 claimants will be meeting with their work coaches and expected to take more steps to either move into work or increase their earnings – this can be a daunting prospect for single parents and it’s vital that is recognised.

Furthermore, the use of automated sanctions is going to be expanded. This will likely push more people into poverty, and cause a lot of stress and anxiety. We are particularly concerned about extenuating circumstances that single parents may find themselves in; these require sensitive and considered conversations with JCP, as opposed to automated sanctions. This is particularly important for people who have been victims of financial or any other forms of domestic abuse, or who may find themselves still under the financial control of an ex-partner. Additionally, whilst childcare provision is expanded, Job Centres need to recognise that it is not always easy for single parents to access childcare quickly, and this must be accounted for under the sanctions scheme.

Work capability assessments

Alongside the budget, a Disability White Paper has proposed a huge shake up to work capability assessments, to encourage more people with disabilities into work. IFS Analysis shows that up to 1 million people claiming incapacity benefits could lose hundreds of pounds a month under plans to shake up work capability assessments. This is largely down to the fact that those with conditions that prevented them from working (short term or fluctuating conditions) who don’t claim PIP or incur major additional living costs won’t receive extra support.

We are concerned about the impact that this will have on single parents (33% of whom are disabled). Disabled single parents, most of whom are women, were the group worst hit by austerity measures between 2010 and 2021, losing 21% of their income through changes to taxes and benefits, rising to 32% if they had a disabled child. Changes to support available will leave them in an even worse financial position.

Other aspects of Universal Credit:

Other elements of Universal Credit were largely neglected by the Budget, despite the fact we are in a cost-of-living crisis. Local Housing Allowance didn’t increase in line with inflation, meaning we are seeing real term cuts, at a time when rents are soaring.

Single parents have seen the most significant decline in financial wellbeing, with those in serious financial difficulties rising from 23% to 37% since October 2021 (Abrdn Financial Fairness Trust, 2022). This is set to be exacerbated as the cost of living crisis continues.

Energy

We are pleased to hear confirmation that the Energy Price Guarantee Cap has been extended until June, and that those on pre-payment meters will have energy charges brought in line with customers who pay by direct debit. However, as the cost-of-living crisis continues to bite, more long-term plans to ensure the affordability of fuel, as well as food and housing, are required to ensure that single parents do not fall further into poverty.

Good news for single parents?

• Analysis suggests this will save the ‘average household’ £160, and the parity for people on Pre Payment Meters is a positive step (research from Scotland shows 45% of Single parents are on PPMs), however this cap does not fix the flawed energy system in the UK, leaving us nervous about next winter. The Government needs to create policy that eliminates fuel poverty, the cap is a sticking plaster for the time being.

Summary

Although we welcome the introduction of up-front payments of the childcare element of Universal Credit and the retention of the Energy Price Guarantee Cap, we have serious concerns about other aspects of the Spring Budget and its likely impact on single parent families during the deepening cost-of-living crisis.  Whilst on the surface the expansion of free childcare hours to up to 30 hours a week looks positive, the Government says it could dock benefits unless parents:

• Are available for work up to 30 hours a week once their youngest child turns three, nearly double the current requirement of 16 hours.
• Meet with a job coach every three months – up from every six months – as soon as their child turns one. Parents of two-year-olds will have to attend coaching monthly.
• Seek employment if their partner is in paid work but their wages are topped up with universal credit. These individuals previously had no obligation to work.

Gingerbread has asked the DWP and HMRC  for clarification on how and when these changes will be implemented, and we will share their response when it is available.

If you are interested in helping us campaign and lobby for a better deal for single parent families, email us at campaigns@gingerbread.org.uk