Child Benefit could be limited to two children

It is reported that capping Child Benefit at two children would save £1billion annually. A reduction in the benefit amount for a first child is also being considered – reducing it from £20.70 per week to £13.70. The Institute for Fiscal Studies calculates that this would save £2.5billion a year and cut £360 per year from every family with children.

These discussions are taking place as David Cameron announces plans to double the free childcare given to parents of three and four year olds, from 15 to 30 hours per week. The childcare offer will benefit up to 600,000 families, and be worth the equivalent of £5,000 per year.

Yet the Pre-School Learning Alliance, which represents 14,000 private, voluntary and independent groups, has criticised the plan, warning that councils are already paying insufficient hourly rates to provide existing levels of childcare.

Neil Leitch, Chief Executive of the organisation said: “The current free childcare system is so grossly underfunded that extending this without really looking at what it’s going to cost will just exacerbate the problem.” He estimates that at least £354million in additional funding would be required to deliver the plans.

Priti Patel, the Employment Minister said the overall funding model will be reviewed.

She said: "We are doing more than any other government to improve the affordability and accessibility of childcare for working families.

"Having the right childcare in place will mean more parents can have genuine choice, security and peace of mind when it comes to being able to support their family."

Pilots of the scheme will begin in some areas from September 2016 and rolled out nationally the following year.

For further information and help, read Your situation section: Bringing up a child.