Some of the areas classified by the Government as England’s most deprived have among the lowest rates of take-up of state assistance with childcare costs.

Herpreet Kaur Grewal

Some of the areas classified by the Government as England’s most deprived have among the lowest rates of take-up of state assistance with childcare costs, official figures seen by Regeneration & Renewal reveal.

The childcare element of the working tax credit does not take into account the cost of living in an area, so it penalises poor families working in higher cost, higher wage areas such as London, said Regeneration & Renewal columnist Karen Buck MP, who obtained the Revenue & Customs figures.

The London boroughs of Tower Hamlets, Camden and Westminster are deemed so acutely deprived by the Government that they feature among the 86 English councils that receive Neighbourhood Renewal funding. Yet the data shows that Westminster, with the City, has the lowest rate of take-up of the childcare element of the tax credit in England and Wales: 0.26 per cent. Tower Hamlets has the third lowest, while Camden has the 13th lowest.

County Durham has the highest rate of take-up at 4.06 per cent, the figures reveal. Denbighshire in north Wales (1.86 per cent) and Blackpool (1.85 per cent) have the next highest claimant counts.

Buck, Labour MP for Regent’s Park and Kensington North, said: “This data shows a clear North-South divide in families’ entitlement to the childcare element of the credit. Families with identical levels of disposable income are treated differently by the system depending on where they live.”

Graeme Cook, researcher at think-tank the Institute for Public Policy Research, agreed that the low levels of entitlement to take-up in the South was probably because of higher wages in the area.

But a Revenue & Customs spokeswoman said that payment of this benefit is based on “eligibility rather than geography”.

TAX CREDIT TAKE-UP

Bottom and top areas for the proportion of working age people receiving
the childcare element of the WTC in 2005/06

Area Take-up

Westminster & the City 0.26%
Kensington and Chelsea 0.27%
Tower Hamlets 0.32%
Blackpool 1.85%
Denbighshire 1.86%
Durham 4.06%