Investigation will form part of wider Treasury Committee probe into impact of childcare policy

Credit: CROFT MALCOLM CROFT/PA Archive/PA Images

HMRC’s troubled rollout of the government’s flagship childcare pledges is to be examined by the Treasury Select Committee as part of a review of how the current system of childcare support impacts the economy.

The review was announced today by the committee chair Nicky Morgan, who said that the provision of high quality and affordable childcare was vital for getting parents into work and supporting working families.

“The Treasury Committee will look at how it delivers benefits to the economy and supports labour productivity and participation,” she said. “We’ll also look at the effectiveness of government initiatives at making childcare accessible and affordable.”

In particular, the review will look at the launch of the government’s Childcare Service website, which was run by HMRC and was intended to provide the government’s pledge to double the amount of free childcare entitlement to working parents to 30 hours.

However, HMRC chief executive Jon Thompson admitted to the committee last August that 5% of people who used the new website designed to bring together the 30 hours pledge and tax-free childcare options had experienced technical difficulties ahead of the Autumn rollout. 

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“With regard to the problems that some parents have experienced, we are working to improve the way the service works and in the meantime, where necessary, we are issuing 30 hours free childcare codes manually, and are paying parents the government top up for Tax-Free Childcare when they’ve had difficulty accessing the service because of technical issues,” he said of the problems in August.

Morgan had previously warned Thompson that the committee was likely to review the website after reports of failings.

Speaking this week, she said: “There had been reports of problems with the HMRC-run Childcare Service website, which has been a cause for concern. We’ll examine the impact of these failures on the take-up of government initiatives that aim to make childcare affordable.”

The review will also look at the effectiveness of the government’s range of schemes to support parents with childcare costs, which as well as the free entitlement include the ability to use salary sacrifice childcare vouchers and a new tax-free childcare account. The committee will assess how these individual initiatives interact and whether they have helped support adequate provision of affordable childcare.

The first session in the inquiry will hear from chief secretary to the Treasury Liz Truss on 31 January, while the committee’s website has an inquiry page where submissions can be made.