More child care would help lone parents, ministers told

THE MINISTERIAL offensive over the mounting social-security cost of lone parenthood was launched despite advice from civil servants that more child care was needed to take mothers off income support.

A further leaked section of the Cabinet Office paper on lone parents, drawn up before last month's Tory party conference, accepts that the margin between minimum wages plus family credit - the benefit payable to low-income families in work - and out-of-work benefit is now equivalent to average child-care expenditure.

The paper, which was leaked to Labour, says: 'Increasing this margin would help lone parents who have to meet child-care costs.'

Many lone mothers are unable to take advantage of family credit, still less leave the benefit system altogether, because paying child-care costs while working would leave them worse off than if they remained on income support.

Boosting disposable income by increasing family credit or disregarding earnings could add between pounds 100m and pounds 200m a year to the pounds 80bn social security budget, the paper says.

Under the alternative of providing assistance targeted on child-care costs, it says it 'seems likely that there would still be an overall net public expenditure cost. There may, however, be unquantifiable advantages gained in reducing the length of benefit dependency, and an increased long-term earnings potential which would eventually allow more lone parents to move out of benefits altogether'.

There is no indication in the paper that any detailed cost-benefit analysis has been carried out.

But apart from improved incentives in the benefit system, the paper lists initiatives that could help more mothers into work.

Spending pounds 5m a year over three years could help 1,500 part-time playgroups to extend their hours and increase full day-care places by between 30,000 and 40,000, it says. The Department of Health's Small Grants Scheme could also be extended by pounds 1m to pounds 2m a year to enable the development and expansion of local child-care schemes.

The paper says none of the proposals were put forward as bids in this year's public spending round.

The case for investment in child- care was now unanswerable, Labour said yesterday. Gordon Brown, shadow Chancellor, said: 'The leaked document exposes the hypocrisy of government statements about lone parents. New child-care provision has not been rejected on the grounds of public cost. It has not even been proposed because of government dogma.'

In a further instance of Labour's conversion to funding services with a mixture of public and private finance, Harriet Harman, shadow Chief Secretary to the Treasury, yesterday urged the Government to learn from examples of co-operation between Labour councils and local employers in child-care provision.