An open letter to the Chancellor regarding the Spring Budget
Published: 20 Feb 2024
Dear Chancellor,
As the anticipation builds for the upcoming Spring Budget, I would like to draw your attention to the pressing issues facing countless parents and carers across the country. The forthcoming budget represents a crucial opportunity for meaningful change, particularly for those who are dealing with daily challenges made worse by current financial strains, despite the work you have undertaken to reduce inflationary pressure. Thanks to this slowing inflation, we are particularly mindful that you have some fiscal headroom due to a smaller debt interest bill.
We have recently worked with stakeholders from across the political spectrum to help your government deliver legislation to improve access to flexible working, to give workers the right to a more predictable working schedule, and to achieve a huge leap forward in introducing neonatal care leave and pay. However, there are still barriers that people with caring responsibilities face in the workplace, and we believe that your Spring Budget offers an opportunity for the Government to help remove some of these.
The 2023 Working Families Index highlighted the hurdles confronting many parents and carers, especially those with lower incomes. The scale of support needed can be seen through the numbers accessing our Legal Advice Service. In 2022/23 we provided personalised legal advice to nearly 1,700 parents and carers by email and phone and nearly 1 million working parents and carers accessed our legal advice pages. These individuals are navigating their way through a host of financial uncertainties, and desperately seeking our help in the hope that we can provide a solution and they can remain in employment.
For your Spring Budget, we are writing to ask you to build upon your support for working families and consider the following key issues facing them today.
- Address the shortfall in childcare funding.
The availability and affordability of childcare services is vital in supporting the functioning of working families. Yet, for many, exorbitant childcare costs serve as insurmountable barriers that risk taking them into further debt and financial instability.
With the cost of a full-time nursery place for a child under two costing an average of £285 a week, the equivalent of 44% of the average pay for full-time workers, we ask that the government devise a comprehensive strategy to bridge the £5 billion shortfall in childcare funding, thereby safeguarding the accessibility of vital childcare services for all families.
- Prioritise the plight of working parents by protecting those on Universal Credit and legacy benefits.
When you delivered your Autumn Statement, we welcomed your decision to uplift benefits in line with inflation. This decision has helped many of the most vulnerable in society, including many parents and carers.
As you will know, around 40% of those claiming Universal Credit are in work. We ask that you continue to raise benefits in line with inflation, which on current rates of inflation would be a 4% rise. By not raising benefits in line with inflation, families who are already doing everything they can to keep their heads above water, will be pushed into even further financial stress.
- Expedite the implementation of neonatal leave and pay provisions.
The Neonatal Care (Leave and Pay) Act represents a vital lifeline for parents of sick infants, offering much-needed respite. However, almost 120,000 parents of babies needing neonatal care in the UK from now until April 2025 will miss out due to the current timeframe for implementation given by the government. (Bliss, 2023)
We urge the government to expedite the implementation process, ensuring timely access to crucial resources for all affected individuals.
- Address the inequities perpetuated by the inclusion of Maternity Allowance payments in Universal Credit calculations.
This penalty unfairly affects vulnerable women, worsening financial hardships during maternity leave.
While intended to function similarly to statutory maternity pay, it’s treated as unearned income, creating disproportionate impacts compared to Statutory Maternity Pay, which is considered ‘earnings’. As a result, those receiving Maternity Allowance risk losing rather than supplementing their Universal Credit income. Despite unsuccessful legal challenges, this inequality persists.
We urge you to rectify this disparity by removing Maternity Allowance payments from Universal Credit calculations and promoting fairness for all.
- Re-evaluate the rates of pay for Statutory Maternity, Paternity and Shared Parental Leave.
Adequate financial support during parental leave is essential for supporting healthy parent-child relationships and help to alleviate financial pressures. Leave for new parents needs to be at levels that make it affordable to take. Individuals may feel unable to take the full length of leave they’re entitled to, particularly for lower-income families, due to the negative consequences for their finances. Our research indicates that on average, working mothers on a low income are only taking 23 weeks of maternity leave, a whole four months less than the UK average.
The Spring Budget presents an opportunity to enact tangible reforms that will alleviate the burdens weighing heavily on parents and carers across our nation.
Yours sincerely,
Jane van Zyl
CEO, Working Families
* Figure calculated by the Women’s Budget Group, February 2024