A source said the plan was canceled after the Treasury said there was too great a risk of money being lost to fraud.
“The Treasury objected outright, saying the risk of fraud was far too high, without actually offering their mitigation proposal, and clearly has no interest in the economic benefits of this policy as a whole, as well as in significant benefits for families,” the government source said. .
“Once again, this stands in stark contrast to their attitude towards fraud in the public sector. They care about fraud on the one hand here when it comes to reducing the cost of custody. children, but are jaded by the billions lost in the pandemic.”
On Saturday, a source close to Mr Sunak said: ‘Rishi actually wanted to fundamentally reform the way child care support and Universal Credit interact to get more support to families faster, but the Department of Labor and Pensions told him that was not possible.
“What he has done is set up the Holidays and Activities Fund worth £200m a year to help provide activities for children during the holidays.”
“Problem of very high childcare costs”
Currently, working parents claiming Universal Credit can claim an additional £646 per month for one child, or £1,108 for two or more children, to cover childcare costs. But payments are only accessible for childcare provided by organizations registered with Ofsted – mainly nurseries and schools themselves.
In a letter to members of the Cabinet’s Domestic and Economic (Strategy) Committee, which includes Mr Sunak and is chaired by Mr Johnson, Dr Coffey – who now backs the Liz Truss leadership campaign – said in June: “This means that many forms of childcare will not be covered unless providers voluntarily choose to register with Ofsted, which excludes parents from a large part of the childcare market. of children for those over eight years old.
“In addition, DWP is proposing to amend its regulations to include certain group-based providers, such as: school holiday activity providers; school wrap-around providers; after-school facilities; nurseries.”
The letter said Sunday schools, nannies, babysitters and tutors would be excluded.
In the letter, Dr Coffey said the proposals stemmed from the Prime Minister’s request to ministers to find ‘solutions to the problem of very high childcare costs’.
She added: “The average cost of caring for a child aged two or under is around £260 a week, more than three times what the average family spends on food. It’s a huge burden for families, alongside the wider and rising cost of living pressures, so we need to find solutions that make a difference now.”
Dr Coffey also cited the proposals as a way to increase use of the childcare element of Universal Credit.
The Treasury insisted it was taking action to prevent fraud involving Covid support schemes which “have been implemented at unprecedented speed”.