Childcare cash could be handed straight to parents in subsidy shake-up

Prime Minister Liz Truss is reportedly planning to overhaul the subsidised childcare system in a move which would see money handed directly to families.

As it stands, all three and four-year olds in England are entitled to 15 hours' free childcare a week during term time, while some families can claim up to double that amount.

The funding for each place is currently sent straight to approved providers, such as nurseries or childminders.

However the Prime Minister and her Education Secretary, Kit Malthouse, are reportedly weighing up proposals which would see the money paid directly to parents to invest as they wish.

The Department for Education (DfE) said "a wide range of options" are being explored to make childcare more accessible and affordable, but no decisions have yet been made.

The Times said one option is for parents to be given a flexible childcare budget in place of a paid-for space, with the Government potentially loosening the rules on which providers can offer the care and how old children need to be to qualify.

Alternatively, families could be given near-total freedom on how they spend the cash, potentially passing it on to grandparents helping out with childcare.

A DfE spokesperson said: "We are exploring a wide range of options to make childcare more accessible and affordable for parents, but no decisions have been made."

Earlier this month, The Telegraph revealed that Ms Truss will drive the creation of new “childminder agencies” under a French-style system to slash the cost of childcare.

Under radical reforms being considered by the Government, the agencies could be given public money to grow while childminders could also be released from individual Ofsted inspections, with regulation by the watchdog focusing on the agencies instead. Childminders could also be given permission to work from council homes.

In his speech launching the mini-Budget, Kwasi Kwarteng, the Chancellor, promised to break down “barriers for enterprise” by “reforming the supply side of our economy”, with childcare identified as a key sector for reform.