Katie Schmuecker is Policy and Research Manager at the Joseph Rowntree Foundation.

Childcare has become a mainstream political issue.  Where once it might have just about been found in the margins of political party’s manifestos, it can be expected to be far more visible in the 2015 general election campaign.  

It has become an important issue for three reasons. First, good quality childcare supports child development, especially among children from deprived backgrounds.  Second, affordable and accessible childcare removes a barrier to work for parents, enabling them to move into work or work more hours, boosting household incomes.  Third, childcare has become a central cost of living issue: since 2008 childcare fees have increased by 42%, while the overall cost of a basket of essentials has increased 28% and average earnings 9%.

New research out today from JRF and the Child Poverty Action Group reinforces the centrality of childcare costs to the squeeze on family living standards.  The Cost of a Child report calculates the additional cost having a child adds to a household’s budget, based on detailed research with members of the public about what goods and services are needed for a minimum socially acceptable standard of living in the UK.  

It finds the presence of a child adds £83,000 to a household’s budget over 18 years, or £89 a week, not including rent or childcare costs.  Once these items are factored, the cost leaps to £154,000 over 18 years, or £165 a week.

It is therefore not surprising that the government has made childcare costs central to its approach to helping families with living costs.  Their plan to help low income families with 85% of their childcare costs through Universal Credit will make a big difference (currently families can claim support with 70% of the cost through tax credits).  

However, there are two slight catches. First, the government has said the estimated £400m a year needed to pay for the extra support for childcare costs through universal credit must come from savings within the Universal Credit Budget, which could mean giving with one hand while taking away with the other.

Second, the policy – understandably – sets a maximum amount of childcare costs that the state will support, currently £175 for one child.  But this figure has not changed since 2005.  Given how quickly childcare fees have increased in recent years, it won’t be long before the average price of childcare outside London exceeds the limit.  Inside London, average full time fees are already well above this rate.  

If it is not careful, the government’s positive plan to support the living standards of low income families will be undermined.  Finding extra the money to support childcare costs from somewhere other than the Universal Credit budget (perhaps from the same place the £750m was found that has been earmarked to pay for the tax free childcare offer for middle and higher income families), and uprating the limit on childcare costs in line with average childcare inflation would be two easy step to ensuring the policy makes a real difference.