Childcare clubs `will need at least pounds 300m from business and counc ils'

BUSINESSES and local authorities will have to contribute at least pounds 300m a year on top of parental fees if the Government's scheme for out- of-school clubs is to work, the Kids' Club Network (KCN) warned today.

While the Government has promised pounds 300m in total to set up 30,000 clubs with a million places, a substantial investment by local business, local authorities and fundraising activities will have to be made if the clubs are to succeed. At present only 5 per cent of schools provide or facilitate out-of-school childcare and only 3 per cent of employers provide out-of- school childcare for their employees.

The Independent is campaigning for the Chancellor to invest in the nation's children by giving working mothers a tax allowance to help with the cost of childcare.

The Kids' Club Network has calculated that an average club for 30 children costs pounds 40,000 a year to run. "We assume that average parental fees will cover pounds 30,000 of these costs [but] that club will need to find a further pounds 10,000 a year. In low- income areas this figure could be substantially bigger."

The pounds 10,000 would then have to be found from a mixture of fundraising, local authority and local business - pounds 3,300 each, on average. "The implications are that funds are going to have to be found from somewhere else," said Ann Longfield of the KCN. "They are not going to be self-financing."

Meanwhile, the Daycare Trust called on the Chancellor to use a childcare tax credit to make childcare more affordable for parents. "Making childcare more affordable will maximise the Government's pounds 300m investment in expanding childcare by creating a stream of revenue to ensure the long-term viability and sustainability of new and existing places," said Colette Kelleher, director of the trust.

The Budget on 17 March provides the Government with a "real opportunity" to help low-income families, says the charity.

British families currently pay the highest childcare bills in Europe. A family with two children - one pre-school and one child at school needing after-school and holiday care - typically faces bills of more than pounds 6,000 per annum. At present, fewer than 30,000 families get help with childcare costs through the benefits system.

The Daycare Trust argues that a childcare tax credit would be available to many more families on low incomes, would be simple to understand and would provide realistic levels of help.

To provide incentives to go to work the tax credit needs to be set at a high rate - with a top rate subsidy of 90 per cent of childcare costs. To avoid poverty traps, subsidies also need to be available to families on the next income bracket up, with a gradually decreasing subsidy rate.

The trust is also calling for a "back-to-work childcare grant" to provide free childcare for the first six months in employment for people leaving income support and a "childcare for training grant" to help lone parents in full-time education or training.

"Making childcare more affordable has many benefits," said Ms Kelleher. "It will underpin the success of the welfare to work programme; it will help tackle social exclusion; it will improve the quality of childcare services and it will sustain the Government's expansion in childcare places."

She added: "A childcare subsidy within the working families' tax credit is the first much-needed step towards making childcare more affordable in the UK. With increasing numbers of mothers with young children returning to work, employers need an effective childcare infrastructure as much as they need roads and railways."