Budget 2012: baby steps for parents, but much more is needed

March 23rd 2012

You know you have grown up when you know the date of the budget, the Chancellor’s name and that of the Chief Secretary to the Treasury. Nowadays, I know all three!

The budget is of interest to me for two main reasons. Firstly, what will it do to help parents better afford childcare, and secondly would it do anything to help a social businesses like ours? Having trawled papers of all political persuasions, I found this budget has done at least something for parents, but nothing much for social businesses or charities.

Raising the tax free personal allowance to £9,205 next year is good for all staff working in Early Years, as this is historically a low paid sector, yet the drop in the higher rate tax from £42,475 to £41,450 will put many parents under even more pressure, with less again available for childcare.

Elsewhere I was pleased to see a fairer approach in the changes to child benefit.  I had already tweeted our disgruntlement about the initial unfairness of reducing it for families with one working parent, whilst allowing households with two working parents claim it even when their combined salaries exceeded the same limit. The new model seems fairer, although this first step towards producing a universal credit may be a retrograde one in the long term. Once a small snip makes it through, it will be easier for future Chancellors to trim away along the edge and soon the tablecloth has become a napkin.

I thought the Chancellor missed a trick by not improving working tax credits. It was a good move to exempt families with disabled children from changes here, but he could have done more to improve opportunities for all working parents – for instance letting them qualify for tax credits after 16 hours work. This would have meant fewer families would lose out when choosing to work part time, instead of being worse off than when they were on benefit.

Tax credits offer possibly the single greatest means to helping parents cope with the real cost of working when paying for childcare, and so much more could easily have been done here to make work pay.

The commitment to end child poverty by 2020 looks to be once again in jeopardy, especially if the Chancellor cuts £10bn from the welfare budget by 2016.  The promise to show us how our hard earned tax is used may be helpful here, so we can see exactly what the cuts will do to poorer families. Still, it remains grossly unfair that the poorest should bear the brunt of costs from the Government deficit.

Meanwhile, businesses were no doubt very pleased with the reduction in corporation tax, but sadly this makes no difference to social enterprises.  The Chancellor offered  no tax cuts for those of us in the social or charity worlds; nor did he improve access to social investment, which is key to helping grow and develop business in a way that has the potential to fundamentally change the way services are delivered to our communities. Access to social investment finance is the biggest barrier to business development in the social and charity sectors, but only the sixth barrier to ordinary businesses. Changes to the community investment tax could have made a massive difference here.

Finally, I do hope he keeps a lid on the reductions in UK planning laws. This country needs its green lungs.  We spend a lot of time finding ways to give children in our nurseries fresh air and space to be themselves, and it seems to be getting harder every day. Competing with cars and developers is no mean feat.  Allowing buildings on every site and squashing us all together will not be good for the aesthetic, physical or emotional well-being of anyone.

So what do we think of this budget?  A small glimmer of growth, whilst keeping a tight rein on the budget remains the watchword for households and businesses alike.

Either way, I know one nursery rhyme we might all be learning this week…

A dime and a dollar
Took me by the collar
And whispered this word in my ear:
“We must leave you to-morrow,
But prithee don’t sorrow,
We’ll come back to see you next year.

Leroy F. Jackson