Letter: Private investment in childcare

From Mr Andrew Newton

Sir: I was surprised by Professor Ruth Lister's remarks in her letter (2 December) that proposals to encourage lone parents to move into paid employment are of doubtful effect particularly while the Government "refuses" to invest in childcare facilities.

A study made earlier this year by the Institute for Fiscal Studies indicated that the availability of childcare does not automatically return mothers to the labour market.

Immediately after the Budget it was announced that the childcare benefit (not to be confused with Family Credit) is to be raised from pounds 40 to pounds 60 per week, equivalent to the average full-time weekly cost of childcare outside London. Now that government has guaranteed the whole of the cost of childcare, and childcare businesses will be able to borrow on the collateral of a childcare voucher, there is a valid business case for private sector investment in childcare facilities.

If the greater social problems of single-parent families are not worked out in the future, that will increasingly be because childcare subsidies and taxable benefits alone are not able to provide all the necessary security.

Yours faithfully,

Andrew Newton

Chairman

Social Security Committee

Bow Group

London, W2

5 December