23 March 2025
SDLP Leader Claire Hanna MP has called on the UK Treasury to remove the cap on Tax Free Childcare which has remained the same since 2017, in spite of significant increases in costs for families.
This comes amid reports that childcare costs in England have fallen for the first time in fifteen years. Costs have not fallen for Northern Ireland families.
Ms Hanna has written to the Chancellor Rachel Reeves and Secretary of State Hilary Benn to discuss the proposal.
South Belfast and Mid Down MP Ms Hanna said:
"The cost of childcare is one of the biggest financial strains on families in Northern Ireland, and whilst some progress has been made with the introduction of the NI Childcare Subsidy Scheme, increasing costs mean that much of this support has since been absorbed by continued rises in fees.
"Families in England have seen costs decrease through the introduction of funded hours for children under 3, while parents continue to face rising costs here. The Executive has repeatedly committed itself to delivering affordable and accessible childcare, but their track record doesn't give confidence that this will change anytime soon.
"I have requested meetings with the Chancellor and Secretary of State to discuss how removing the cap on TFC could support parents in Northern Ireland now and generate an economic return by enabling more parents to stay in the workplace. The UK Government has been clear that helping people return to work is a priority for them, with one of the Chancellors' stated aims supporting women in particular, and this is a way that will help enable people to stay in the workplace at a time when many women find themselves with no other choice but to leave or reduce their hours due to the cost of childcare.
"The current Tax Free Childcare cap hasn't changed since 2017 - when the average cost of a full time childcare place in Northern Ireland was £8736 (EFC survey 2017), compared to £10,036 as cited in their most recent survey - this figure could be as high as £14,423 according to a survey by Melted Parents.
"Inflation that has hit the pockets of hard-working parents hasn't been reflected in inflationary increases to the cap, which would be an obvious and straightforward way to start relieving the pressure on families struggling to keep their heads above water. This is an important, deliverable intervention that will put money back in peoples' pockets and it’s something I hope that the UK Government will act to put in place.”