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Leading early years membership organisation The Early Years Alliance has issued a comment in response to the latest Tax-Free Childcare statistics which reported that 512,415 families used the scheme in the last year. This is up from 374,135 in the previous year. Tax-Free Childcare was introduced by the government in 2017 to help parents cover the costs of childcare. For every £8 a parent pays into their childcare account, the government adds an extra £2, up to a maximum of £2,000 per year per child (or £4,000 for a disabled child). 

Neil Leitch, chief executive at the Early Years Alliance, said: “Although today’s figures show an increase in the number of families using the tax-free childcare scheme, the fact remains that the scheme continues to be used by less than half of eligible families.  

“At a time when so many early years providers are struggling to remain financially viable, surely much of the money the government continues to plough into this struggling policy would be better spent increasing funding for the early entitlement offers, something our own research has shown would be the most effective way to drive down the cost of early education and childcare. 

“What’s more, we have long warned that tax-free childcare is a regressive policy, with parents with more disposable income receiving more financial support than those with less. Given that we are in the midst of a cost-of-living crisis, we urge the government to start focusing on investing in policies that will actually benefit those families that need the most support.”