Author: Anna Mercer, Deputy Director at Strategem
Last week saw a significant step in the campaign for a childcare strategy for Northern Ireland in the announcement by the Education Minister Paul Givan MLA of some interim measures to support parents and childcare providers ahead of a long-term strategy.
This included an extension of Tax Free Childcare (TFC) from 20% to 35%, with the additional 15% not subject to the existing £2000 cap. This has been possible due to the way in which his package will be delivered, using the existing structures set by Treasury (and therefore by Westminster) but using money from the Executive (some of the £25million). For this reason, the discount will be applied by childcare providers rather than within TFC accounts.
So why does this matter and why should we care?
As a devolved part of the UK, Northern Ireland has responsibility for a range of different powers delivered through the Executive Ministers and their departments, and scrutinised by MLAs in the Assembly.
This includes health, education, childcare, roads, water infrastructure, housing, arts and many more, whilst Westminster retains some reserved and excepted matters, the former of which can be devolved in certain circumstances. These include tax, international development, constitutional matters and defence to name a few.
So when it comes to childcare, a long-term strategy will likely require include input from both Stormont and Westminster.
What else should I understand about the institutions?
The NI Executive is a mandatory coalition which functions through the participation of Ministers appointed via the D’Hondt method. This system allocates seats based on the proportion of votes for each party. It needs representation from two different designations – this has traditionally been Unionist and Nationalist – and First and deputy First Minister are nominated by the largest party with the largest designation, before moving to the largest party within the second designation.
Childcare sits within the Education portfolio, which was selected by the DUP following the D’hondt process as their first pick after Sinn Féin opting for the Economy brief. This was a bit of a surprise as it had been expected that the second pick would be the Finance Ministry, which was instead available to Sinn Féin through this move by the DUP.
Education receives the second largest allocation of the budget after health at £2.8billion in the 2024/25 budget.
However it also has relevance to the Department for Economy whose responsibility includes driving economic growth and addressing economic inactivity – two key challenges that an effective childcare strategy has the potential to unlock.
The Finance Minister also has a role to play through holding the purse strings – however it is worth pointing out that for something as significant as the delivery of a childcare strategy, it is likely that it will require Executive support from other ministers anyway.
What role to MPs and UK Government have?
As outlined above, UK Government are responsible for tax, and for the Tax Free Childcare system. Campaigners have been lobbying to increase the threshold on this scheme from 20% to 30%, however this has, to date, not been successful, mainly for the fact that other parts of GB have used a range of other levers and schemes to make childcare more affordable and accessible.
There are also calls for the cap to be increased or removed, and for good reason. The current cap has been in place since 2017, and has not increased since this point despite significant increases to the cost of childcare and the cost of living more generally.
The combined impact of the cap and the TFC threshold is now out of step with the increased costs, resulting in those relying on full time formal childcare through the TFC scheme having limited access to relief on their childcare bills.
Can we lobby both UK Government and the NI Executive?
Whilst efforts to change the threshold have not generated the outcome campaigners are seeking to date, last weeks’ announcement was a nod towards integrating a cross-jurisdictional approach that follows a recommendation made by Melted Parents of using the existing infrastructure (TFC) along with Executive funds (£25m) to deliver interventions for families in the short term.
But there is more to do. The Childcare Subsidy Scheme announced by the Minister isn’t fail safe as it will be administered by providers rather than HMRC, and so we believe that it is important to push for the 35% to be managed within TFC gateway accounts.
We also want to see the cap removed from the existing 20% threshold. An initial first step would be to increase this with inflation to reduce the cost to the NI Executive as this would be absorbed by Treasury, with a view to NI contributing the difference of removing the cap.
What does the General Election mean in all this?
The General Election will enable voters to select their preferred candidate across the 650 constituencies in Northern Ireland, England, Scotland and Wales. Northern Ireland has eighteen of these seats.
Unlike Assembly elections, this is a “first past the post” election whereby a simple majority will see the winning candidate in each constituency elected. So put simply, its an “x” in a box beside your chosen candidate.
Whilst 18 seats is a very small proportion of the 650 seats up for grabs in Westminster, there have been occasions when NI MPs have held the balance of power, most recently following the 2017 General Election which saw the DUP agree a confidence and supply agreement with Theresa May’s government.
It is also important to point out that in 2019 General Election, the seat with the smallest margin was Fermanagh & South Tyrone, which saw Sinn Féin’s Michelle Gildernew take the seat by 57 seats to her nearest competitor, the UUP’s Tom Elliot.
The up sum of this: your vote counts, so make sure to use it!
If you aren’t due to be in the country on the day of the election which will take place on 4 July, you can arrange a postal vote. More information available here.
Also important to check you are registered to vote, and you can do this here.
Who should I vote for?
We can’t tell you who to vote for but we can suggest that you check out party manifestos to see which party best represents your interests.
Watch this space for updates on how to access manifestos when they are published.