Parents on Universal Credit will be able to claim hundreds of pounds more to cover childcare costs from the end of June, the Government has announced.

However, Labour has criticised the announcement for not going far enough and failing to include an increase in the workforce.

The change will allow parents to claim back £951 for childcare costs for one and £1,630 for two or more children – a 47% increase.

Work and pensions secretary Mel Stride said the changes will ‘cut inactivity and help grow the economy’.

Mr Stride said: ‘These changes will help thousands of parents progress their career without compromising the quality of the care that their children receive.

‘By helping more parents to re-enter and progress in work, we will be able to cut inactivity and help grow the economy.’

However, shadow education minister Helen Hayes said: ‘The Conservatives are piling pressure on a broken system.

‘Their plans come with no plan to increase the workforce, who are so critical to delivering an expansion of childcare.

‘What parents and children both need is higher standards, better availability across our country, and a flexible system that supports families from the end of parental leave to the end of primary school.’

Commenting on the announcement, Cllr Louise Gittins, chair of the Local Government Association's (LGA) Children and Young People Board, said: 'We are pleased that the Government has moved to increase Universal Credit’s maximum childcare payment, which is something the LGA has long called for, and are also glad action is being taken around recruitment and retention, with councils concerned about provider closures, but this action is needed now.

'However, these proposed changes will have to be managed carefully to ensure that a focus on high quality education, alongside the focus on childcare, remains. We await further information regarding the rollout of the expanded childcare offer and funding attached to it.'

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