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As most parents will be aware, it can be hard juggling work around caring responsibilities. This tends to be particularly difficult for single parents, who lack the option of ‘shift parenting’ that couple parents can use. This is why childcare affordability is so critical to making work a possibility for single parents. And it is why the significant rise in childcare costs over time is so concerning.

Plans to increase support from 70 to 85 per cent of childcare costs show the government is taking this issue seriously. But will this solve the problem? New analysis from Gingerbread, in partnership with Donald Hirsch (Centre for Research in Social Policy, Loughborough University), shows the increased support will mean many will gain instead of lose money by increasing their working hours. For some, they might even gain enough income to reach a decent income to meet the minimum needs of their family.

There is a fly in the ointment though. Those with high childcare costs – for example, if their child is of pre-school age or not yet eligible for free childcare hours, or in a high-cost area like London – will end up worse off if they increase their working hours. We found that a typical single parent in London with support for 85 per cent of costs, for example, will still lose £36 per week by moving from part-time to full-time working hours. This is because the additional childcare required to work longer hours will mean these parents go over the limit on childcare costs eligible for support. Somewhat illogically, this cap has remained unchanged since being introduced a decade ago, while – for instance – nursery costs have increased by around 70 per cent in this time.

Where does this leave childcare policy? If the government continues with subsidies for childcare, it urgently needs to review the cap on support to ensure it reflects current childcare costs. It should also consider how long parents should continue under the current system – they will only receive the 85 per cent support rate once they enter Universal Credit; those on tax credits are unlikely to do so for some time, potentially a number of years. Yet single parents are struggling now; our research found half of those surveyed had borrowed to cover childcare payments in recent years.

But we also need a broader look at the childcare funding system, to ensure longer term affordability. In the next 18 months, there will potentially be four forms of childcare support in tax credits, Universal Credit, ‘tax-free’ childcare and employer vouchers. A new government must make it a priority to review the childcare system as a whole and establish whether the reforms are fit for purpose. Without this, we will have yet more complexity in an already fragmented system, and this helps no-one – not parents, not employers and not the state.

Sumi Rabindrakumar is Research Officer at Gingerbread, and tweets at @GingerbreadPA