Executive Summary: Childcare advance project Hillingdon pilot project report 2012

Childcare Advance Hillingdon pilot project report 2012

02 Childcare Advance Hillingdon pilot project report 2012

ContentsExecutive summary 03

1. Project outline 042. Childcare Advance loans 053. ‘Into work – what to expect’ workshops 074. ‘A parent’s guide to moving into work’ factsheet 095. Parent survey 106. Discussion of project outputs 147. Recommendations 17

Appendix 18

03Childcare Advance Hillingdon pilot project report 2012

Executive summaryContentsProject outlineThe aim of the Childcare Advance Hillingdon pilot project, funded by Calouste Gulbenkian Foundation from November 2010 to February 2012, was to help reduce child and family poverty by decreasing childcare cost related debt which is a significant barrier to entering and staying in work. The project set out to achieve this by increasing access to low interest credit to pay for childcare fees in advance, and increasing awareness of the help available to parents whilst they look for and move into work.

The pilot consisted of three elements; the Childcare Advance loan offer, support and advice to parents who were looking for or starting work and a research element to assess the outcomes of the pilot model.

The Childcare Advance Hillingdon pilot project was delivered by Daycare Trust, Hillingdon Credit Union, Hillingdon Citizens Advice Bureau and eight other partner organisations who all work with parents in Hillingdon through housing, employment, education/training and advice services.

Project outputsNo loans were taken out during the project delivery period; however, two loans have been taken out in March 2012.

Seven ‘Into work – what to expect’ workshops were delivered in Hillingdon and neighbouring boroughs. ‘A parent’s guide to moving into work’ was published in September 2011.

A survey of parents’ attitudes to borrowing money for up-front childcare costs was carried out in January and February 2012. Key findings were:• half of the respondents hadn’t heard of credit

unions;• half of the parents who answered said that

they would borrow money to pay for up-front childcare costs;

• the most important factors for parents when considering borrowing money were that the money is from an organisation/person they trust and low interest rates.

RecommendationsAs the only loans to be taken out were granted after the project delivery period, the original aim of this pilot project to make recommendations for a national roll out of Childcare Advance loans is not possible. Instead, the following recommendations are offered to inform any future work focusing on the up-front costs of childcare and to support the continued offer of Childcare Advance loans by Hillingdon Credit Union. The recommendations are aimed at central government (particularly the Department for Work and Pensions), local authorities, Jobcentre Plus and any other organisations involving in supporting parents to return to work.1. Increase awareness and understanding of the

credit union.2. More targeted promotion of the Childcare

Advance loan to parents who are at the point of starting work, for example through employers and childcare providers.

3. Up-front costs of childcare should be included in broader support for parents to meet childcare costs.


1. Project outlineBackgroundIn November 2008, Daycare Trust was awarded funding from Friends Provident Foundation for a project to investigate which parents experience difficulty meeting the up-front costs of childcare and how much of a barrier to work this created, the existing help available and to suggest options for a sustainable scheme that would offer financial help to parents with these costs.

Over half of the parents surveyed for this research reported struggling to meet the up-front costs of childcare with 21 per cent reporting that up-front fees affected their decision to start work. One of the proposed solutions to overcome this barrier to work was to offer loans to parents who are starting work; these loans could be offered by:

• employers offering an interest-free loan repaid by payroll deduction;

• family Information Services and credit union/community development finance institution offering a low interest loan; or

• registered social landlords and credit union/community development finance institution offering a low interest loan.

The project decided to recommend a loan rather than a grant to increase the long-term sustainability of such a scheme. Copies of the executive summary and full report can be downloaded from www.daycaretrust.org.uk.

This pilot scheme, funded by Calouste Gulbenkian Foundation combines the last two options to

offer low interest loans to parents through a partnership of the Families Information Service and registered social landlords in the London Borough of Hillingdon, allowing two of the proposed solutions to be tested.

AimThe aim of the Childcare Advance Hillingdon pilot project was to help reduce child and family poverty by decreasing childcare cost related debt which is a significant barrier to entering and staying in work. The project set out to achieve this by:

• increasing access to low interest credit to pay for childcare fees in advance; and

• increasing awareness of the help available to parents whilst they look for and move into work.

The pilot consisted of three elements; the Childcare Advance loan offer, support and advice to parents who were looking for or starting work and a research element to assess the outcomes of the pilot model.

ObjectivesThe objectives of the project were to:

• promote the availability of low interest loans from Hillingdon Credit Union to pay for childcare fees in advance where parents were not eligible for other help;

• monitor the take-up and repayment of loans in order to evaluate the scheme’s potential for national roll-out;


• provide financial inclusion training to parents to support their money management and make work sustainable; and

• investigate parents’ attitudes to credit unions and credit.

Project structureThe Childcare Advance project was delivered by a partnership of organisations working with parents in Hillingdon, co-ordinated by Daycare Trust.

Childcare Advance loans were offered and administered by Hillingdon Credit Union.

Financial inclusion training was developed and delivered by Hillingdon Citizens Advice Bureau and Daycare Trust.

Loans and workshops were promoted to Hillingdon parents through the following partner organisations:

• Hillingdon Families Information Service;• Shepherds Bush Housing Group;• Catalyst Housing Group’s Pathways to

Work scheme;• Thames Valley Housing Association;• Odu-Dua Housing Association;• Hillingdon Homes;• Uxbridge College; and• Jobcentre Plus.

Daycare Trust developed policies and procedures, publicity and information materials and collated and evaluated the project.

Loan offerHillingdon Credit Union has an established presence in the borough and offers outreach sessions at community settings including a number of children’s centres, which made it a good service through which to offer loans. To ensure that the loans were sustainable and fit within its existing framework, Hillingdon Credit Union agreed to an initial offer of Childcare Advance loans to five parents. Further loans would be agreed on condition of the successful repayment of these initial loans.

The recommendations of the scoping research project were followed and Childcare Advance loans were offered:

• to parents: living or working in Hillingdon; and starting work (full time or part time); and with a household income of up to £40,000

per year (at the point of application); and who are a member of Hillingdon Credit

Union1; and • for up to four weeks childcare fees in advance

up to a maximum of £1,000.

Loans were offered to parents who were not eligible for other help towards the costs of childcare fees, for example from Jobcentre Plus.

Loan applications were subject to the standard credit checks carried out by Hillingdon Credit Union and could be refused.

2. Childcare Advance loans

1 Membership and loan applications could be made at the same time. All members are asked to commit to saving a minimum of £10 per month.


Childcare Advance loans were offered at a rate of 26.82% APR (2% per month on the declining balance) and had to be repaid within 12 months. Repayment was available and encouraged through deductions from benefits, for example, Child Benefit, paid directly into the parent’s credit union account with the balance either being diverted to their credit union savings account or to another bank account.

Loan publicity Childcare Advance loans were publicised through the project partner organisations who all work with parents in Hillingdon through housing, employment, education/training and advice services. Overall, publicity reached more than 9,000 parents in Hillingdon through a variety of media including;

• distribution of leaflets; • displaying posters; • one-to-one discussions with parents looking

for or about to start work; and • articles in organisation/estate newsletters.

In total, 6,000 flyers and 100 posters were distributed to organisations in Hillingdon. The loans have also been publicised on the Hillingdon Credit Union and Hillingdon Families Information Service websites as well as Uxbridge College’s student intranet.

Interest/take-upWithin the project delivery period, five enquiries were made to Hillingdon Credit Union and two loan applications were received. Unfortunately, neither of the parents was eligible; one had previously defaulted on a loan and the other had been in work for some time. However, in March 2012 the first Childcare Advance loan of £400 was paid to a woman returning to work after maternity leave. At the time of writing, a second loan for £750 has been referred to the Credit Committee for approval.

Following a talk with Jobcentre Plus staff by the West London Financial Inclusion Champion and their subsequent promotion of the loans and Hillingdon Credit Union, four new parents joined the credit union as regular savers.

Future of Childcare Advance loansHillingdon Credit Union will continue to offer Childcare Advance loans for a further 12 months beyond the delivery period of this pilot project (until March 2013). It is also developing links with employers in the borough with a view to promoting credit union membership to their employees and will include a loan for childcare costs (repaid through payroll deductions) for new starters in its offer of services.

Daycare Trust will continue to liaise with Hillingdon Credit Union to monitor future take-up of loans.


Workshop outlineA two-hour workshop was developed by Daycare Trust and Hillingdon Citizens Advice Bureau to support parents to plan for and manage the transition from benefits to work.

The objectives of this session were for parents to be able to:• understand the changes to their benefits when

they move into work, for example to Child Tax Credit and Housing Benefit;

• identify the extra financial help available during the transition to work and whilst in work, for example the Job Grant, Extended Payments of Housing Benefit and help with childcare costs; and

• understand the advantages of saving money.

The workshop was designed to pass on information about benefit entitlement and to facilitate discussion and the sharing of experiences between the parents attending.

Delivery of the workshop was offered free of charge, although hosts were asked to provide a venue and co-ordinate attendance. The workshop was offered to Childcare Advance partner organisations, children’s centres, Work Programme delivery organisations, housing associations and other community or parent-focused organisations in Hillingdon.

The workshop was developed for parents, but members of staff were encouraged to attend to enable the information to be cascaded to other parents they work with.

These financial inclusion workshops were also used to further explore the attitudes of parents to credit and borrowing money, both by monitoring feedback offered in group discussions and by adding a question to the workshop evaluation form which all parents were asked to complete. See the feedback section below.

Workshop delivery and attendanceThe ‘Into work – what to expect’ workshop was delivered from March 2011. A total of 15 workshops were organised but only 7 were delivered due a lack of sign up by parents.

Of the parents who attended the workshops2:• 29 were female, 1 was male;• 11 were aged 25-34 years, 12 aged 35-44 years,

3 aged 45+ years and 4 were aged 16-24 years;• 3 considered themselves to have a disability;• 14 had an income3 from benefits, 7 from

benefits and employment, 4 from employment and 5 didn’t respond; and

• ethnic groups included; African, British, British Asian, Chinese, Iranian, Japanese, Pakistani, Polish, Romanian, Somali and West Indian.

3. ‘Into work – what to expect’ workshops for parents

2 statistics from the 30 monitoring information forms completed3 income cited was the family income


Date Organisation (borough) Number of parents signed up

Number of parents who attended

Number of advisers/ staff who attended

28/3/11Catalyst Housing Pathways to

Work (Hillingdon)5 3 2

12/7/11Peabody Housing Association

(Hillingdon)7 4 1

31/8/11A2Dominion Housing Association

(Hillingdon)4 2 3

12/9/11Shepherd’s Bush Housing Group

(Hammersmith)10 6 0

29/11/11A2Dominion HA/Hounslow

Homes (Hounslow)10 7 1

12/12/11Charville Children’s Centre

(Hillingdon)14 6 1

20/2/12Harefield Children’s Centre

(Hillingdon)7 5 0

TOTAL 57 33 8

FeedbackFeedback from the workshops showed that 13 parents would take out a Childcare Advance loan, 2 might take out a loan but 14 of the parents who attended wouldn’t (2 didn’t respond).

The reasons given for not taking out a loan include:

“I try to avoid any types of these which might bring you into debt. We had [sic] experienced that before”

“Due to my religious background am not sure whether I can”

“I’ll try from the money I am receiving, I want to ignore loans”

Workshops delivered

In response to the question about how confident the parents felt to manage the move into work,

• 12 of parents who attended were fairly confident or very confident;

• 5 were neither confident nor unconfident; and • 11 were fairly unconfident or very unconfident.

Future workshop deliveryCourse materials and guidance will remain with Hillingdon Citizens Advice Bureau to allow for delivery of the ‘Into work – what to expect’ workshop to continue beyond the end of the Hillingdon pilot project.

The workshop has also been added to Hillingdon Citizens Advice Bureau’s six-week ‘Managing your Money’ course offered through children’s centres and community organisations.


‘A parent’s guide to moving into work’; a ten page factsheet for parents, was produced in September 2011 to support the ‘Into work – what to expect’ workshop and as a resource for parents in England.

The guide was written by Daycare Trust and was checked by Jobcentre Plus.

‘A parent’s guide to moving into work’ includes:• Information about financial help for parents

when they are: looking for work moving from out of work benefits to work in work (long term)• Back to work checklist• Contacts for further information

The guide has been disseminated through the project partner organisations, to workshop participants and host organisations and is available as a free download from the Daycare Trust4 and Paying for Childcare5 websites.

To date there have been 150 downloads of the factsheet from the Daycare Trust website (figures are not available for the Paying for Childcare website) and the following feedback was received from a London borough representative: “a very informative and well written fact sheet.”

FutureThis guide will continue to be available from the Daycare Trust and Paying for Childcare websites beyond the end of this project and will be updated as required to ensure it remains a current resource for parents.

4. A parent’s guide to moving into work

4 www.daycaretrust.org.uk/pages/-factsheets-for-parents-63.html5 ww.payingforchildcare.org.uk/pages/factsheets.html


A survey of parents’ attitudes to borrowing money was carried out in January and February 2012. The survey was disseminated to parents throughout Hillingdon and neighbouring boroughs by the project partner organisations and children’s centres involved in the project.

The survey was open for five weeks and was primarily available online although paper copies were also distributed by the Families Information Service, Citizens Advice Bureau and a children’s centre in Hillingdon. A prize draw for £100 high street vouchers was offered as an incentive and all parents who gave their contact details were entered into the draw. The survey questions are given in the Appendix.

120 parents responded to the survey, with 72 parents completing the full survey. The survey asked parents about their awareness and membership of credit unions, whether they would consider borrowing money to pay for up-front childcare costs and if so, who they would borrow from and their attitudes to different sources of credit/help.

Credit unionsOf 120 parents who answered the first question about knowledge of credit unions, 49 per cent said they hadn’t heard of credit unions, 32 per cent had heard of them but didn’t know what they

did and the remaining 19 per cent had heard of credit unions and knew what they did.

Of the 61 respondents who had heard of credit unions, only 7 were members. The most popular reasons for not joining were that respondents didn’t know what credit unions do (25 respondents) or that they already had a bank account (20 respondents).

Borrowing money to pay for up-front childcare costsHalf of the 74 parents who answered said that they would borrow money to pay for up-front childcare costs whilst a third wouldn’t (the remaining respondents said they didn’t know/weren’t sure).

Figure 1 (below) shows which sources of credit parents would turn to for help with up-front childcare costs. Family members and friends are clearly parents’ preferred options followed by bank loans/overdraft. Encouragingly, the lowest responses were for high-cost credit (doorstep and payday loans).

5. Parent survey


0

10

20

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0 10 20 30 40 50

Figure 1: From which of the following sources would you get help to pay for up-front childcare costs?

Figure 2: The three most important things you would look for when borrowing money

Figure 2 shows the factors parents consider to be the most important when borrowing money. The top three responses were: that the money is from a person/organisation I trust; low interest rate and the person/organisation is flexible about repayment of the money. These all concur with the preferences given in the previous question to borrowing from family members, friends and banks.

Family member

I know someone else that has borrowed money from that source

Simple application process

I can get the money quickly

The person/organisation will understand if I have difficulty repaying

Flexibility about when I need to repay the loan

Low interest rate

It is from a person/organisation I trust

48

7

15

16

23

Count

Cou

nt

25

44

46

21 2016

10 10 8

1

Friend Bank loan/overdraft

I wouldn’t borrow

money to pay childcare

costs

Credit card Credit union Payday loan Doorstep loan

0

10

20

30

40

50

60

70

80


Figure 3: Borrowing money from any source

The third section of the survey asked for more information about parents’ attitudes to different sources of credit. Full responses can be seen in figures 3-5.

The strongest messages from the responses were that parents: • don’t want to get into debt; three quarters of

parents agreed with the statement ‘I don’t want to get into debt’;

I wouldn’t borrow money (from any source) to pay up-front childcare fees because...

• don’t want to pay back interest on borrowed money; three quarters of parents agreed with the statement ‘I don’t want to have to pay back any interest’; and

• reported family members and friends as being a viable source of credit; more than half the parents who responded disagreed with the statement ‘I don’t know anyone who would/could lend me the money’.

borrowing money goes against my personal values

I don’t want to get into debt

I can use childcare that doesn’t require

up-front

I can afford to pay up-front childcare

fees without borrowing money

12

3

1513

12

5

2 9

17

10

28 20

13

12

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18

42

1113

Cou

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5 (Completey disagree)

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1 (Completey agree)


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80

I don’t want to have to pay back any interest

I don’t want to have to pay back any interest

I don’t think a bank would lend me money/I’ve been turned down for a loan, overdraft or credit card

before

I don’t think a bank would lend me money/I’ve been turned down for a loan, overdraft or credit card

before

I don’t think a bank would be flexible or

understanding if I was struggling to repay them


4

3

2

1 (Completey agree)


4

3

2

1 (Completey agree)

Cou

ntC

ount

Figure 4: Borrowing from a bank loan/overdraft/credit card

Figure 5: Borrowing from a friend or family member

I wouldn’t use a bank loan/overdraft/credit card to pay up-front childcare costs because...

I wouldn’t borrow money from a friend or family member to pay up-front childcare costs because...

Finally, respondents were asked the maximum amounts they would borrow from both professional lenders and friends and family members to pay for up-front childcare costs. The results showed the median amounts parents would borrow as £500 from professional lenders – less than the £1,000 offered through the Childcare Advance loan – and £300 from friends and family members. Interestingly, these amounts correspond with the median up-front costs of £300-£500 incurred by parents surveyed for the Childcare Advance scoping project research.

6

30

62

12

88

14

2119

7

12

36

8

24

8

17

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24

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919

5


Discussion with project partners and others involved in the project suggest that the following factors are significant in assessing the outcomes of the Childcare Advance Hillingdon pilot project.

Economic climateThe timing of this pilot project (November 2010-February 2012) was unfortunate as it fell in a period of recession and rising unemployment, which could affect both the rate of parents returning to work and attitudes and behaviours towards borrowing and credit.

• The number of economically active unemployed people in Hillingdon has steadily increased from 6,500 in July 2007-June 2008 to 11,500 in July 2010-June 2011 (8.2% of all economically active people in Hillingdon – higher than the rate of 7.7% in Great Britain).

• In March 2011 there were 965 unfilled jobcentre vacancies in Hillingdon.

• 12.4% of economically active women were unemployed in Hillingdon in the period January-December 2010 compared with 6.6% in Great Britain6.

Daycare Trust and Save the Children’s parent survey in spring 2011 reinforced the need to address the barrier to work created by childcare costs. The survey of 4,000 parents found that difficulties accessing childcare – including cost – are significantly affecting the ability of parents in severe poverty to work, train or study7.

Attitudes to debt/borrowing moneyAnecdotal feedback from parents given to Families Information Service and Jobcentre Plus officers suggests that parents are reluctant to take out a loan and incur debt, particularly in the current economic climate. This is supported by the findings of the parent survey carried out for this project, a reported general fall in loan take-up, and wider social research carried out into attitudes to debt and credit.

To further investigate the reasons for the lack of take-up or interest in the loans, a survey of parents’ attitudes to borrowing money was carried out in January–February 2012 as part of this project. Whilst half of the parents who responded to the survey said that they would borrow money to pay for up-front childcare costs, the preferred sources of help are family members and friends and, to a lesser extent, banks. This concurs with findings that the most important factors when borrowing money were borrowing from a trusted source and low interest rates. Further findings are given on pages 10-13.

Hillingdon Credit Union report having seen a reduction in the value of loans taken over the last 12 months generally; a trend also found by the Consumer Credit Counselling Service8. Based on the circumstances of its clients, the Consumer Credit Counselling Service found that debt levels were dropping as people seek to reduce the money they borrow. Its statistics also show that

6. Discussion of project outputs

6 All statistics from www.nomisweb.co.uk7 Making work pay – the childcare trap (Daycare Trust and Save the Children, 2011)

8 Statistical Yearbook 2011 (Consumer Credit Counselling Service, March 2012)


households with dependent children owe 21 per cent more than households without children on average.

Data collected for a 2009 study carried out by the Personal Finance Research Centre suggested a hardening of attitudes to credit by the adults interviewed and found that the desire to reduce borrowing was often expressed. Evidence was also found of a ‘correction’ to consumer attitudes to, and behaviour towards spending and borrowing either based on direct experience or present or future uncertainty about the level of household and wider economy. Even if people were unaffected by economic downturn, they were found to be exercising ‘precautionary restraint’.9

In a survey of 2138 people carried out in November and December 2010, 53 per cent of respondents said that money (debt and bank balance) was one of their biggest worries in 2010 (compared with 48 per cent in 2009).10

It is also worth noting that some organisations were uncomfortable about promoting loans to their clients because of concerns that it would encourage them to build up debt.

The concept of taking out a loan to pay for childcare costs, however, is not something that parents appear to be against in principle. The Social Market Foundation report ‘A better

beginning: Easing the cost of childcare’ (Shorthouse, Mulheim and Masters, 2012) recently proposed a National Childcare Contribution Scheme to take advantage of the Government’s low cost of borrowing to enable parents to manage ‘punishingly expensive’ childcare costs. Money used through this scheme to pay for childcare would be repaid (contingent on income) at an interest level of three per cent above inflation. In their survey of 502 parents of children aged under five, 27 per cent of parents said that they were likely to use this scheme.

Knowledge of credit unionsBeing required to join Hillingdon Credit Union to be able to take out a loan could also have been a deterrent for parents who don’t understand how credit unions work. The findings of the parent survey for this project show that 50 per cent of respondents had not heard of credit unions – and only 19 per cent of had both heard of credit unions and knew what they did.

Hillingdon Credit Union acknowledges that Credit Unions are not well understood in the UK but that there is a concerted effort underway to change this. On a local level, they would like to do more to promote their services to a wider audience but with limited resources to do this themselves, they are reliant upon other organisations also publicising their services and loans.

Feedback received through the workshop

9 Facing the squeeze: A qualitative study of household finances and access to credit in a 21st century recession, Collard, Finney & Crosswaite (Personal Finance Research Centre/ECOTEC Research and Consulting Ltd, 2009) www.infohub.moneyadvicetrust.org/content_files/files/090928_facing_the_squeeze_exec_summ_final_2.pdf 10 ‘Worries 2010’ (Samaritans/YouGov, 2010) www.infohub.moneyadvicetrust.org/resource.asp?cat_id=278&rPath=cat&r_id=624


sessions has also highlighted some confusion about the interest rate of the loan and a lack of understanding of interest rates and APR which suggests that further financial inclusion work is needed to ensure that parents fully understand their options to pay for one-off costs such as childcare fees in advance.

Point of contact/loan promotionIn discussion with the partner organisations, concerns were raised that the timing and contact point for the loan offer is also an issue for the promotion of the Childcare Advance loans. Speculative publicity was sent to parents without any knowledge of what stage of the work-seeking process they were at, and workshops were attended by parents who were often at the earlier stages of job search, both of which allowed for a potentially significant time lag between the parents receiving the information about the loans and actually needing help with fees in advance.

This approach of broad promotion was adopted in order to reach as many parents as possible, but more targeted promotion at the point of starting a job is likely to offer a better opportunity to explain and encourage take-up of any financial help available. In addition, with some help available through Jobcentre Plus through discretionary funding and the Job Grant payment11, a more targeted approach would allow the loans to be promoted to parents who don’t have access to other help, for example, couples families when

the second parent starts work, maternity leave returners. It was suggested that more appropriate points of contact could be childcare providers or employers (see Recommendations).

OtherReligion also seems to be a factor in some parents’ choices about whether they would take out a loan as Muslim parents who attended the ‘Into work – what to expect’ workshop raised concerns about whether the dividend earned on the account and interest charged are Shariah compliant.

WorkshopsLack of take-up of the workshops could be attributed to:• the difficult economic climate and fewer

parents starting work or considering work as a realistic/immediate possibility;

• workshops being offered in areas without existing services, for example, housing estates with minimal presence from housing association/other support staff to encourage sign-up and offer credibility to the sessions; and

• funding cuts/public sector restructuring which meant that some organisations were unable to offer workshops because of changes to their services, for example, Hillingdon Homes and welfare to work organisations during the changeover period from Flexible New Deal to the Work Programme.

11 £250 paid to parents who sign off specified benefits after claiming them for at least 26 weeks to start work lasting at least 5 weeks.


As the only loans to be taken out were granted after the project delivery period, the original aim of this pilot project to make recommendations for a national roll out of Childcare Advance loans is not possible. Following the discussion points above, recommendations are instead offered to inform any future work focusing on the up-front costs of childcare and to support the continued offer of Childcare Advance loans by Hillingdon Credit Union.

A. Increase awareness and understanding of the credit union.The parent survey carried out for this project revealed that one of the most important factors for parents when borrowing money is that it is from an organisation or person they trust. The same survey also highlighted a lack of knowledge of credit unions.

Greater awareness of Hillingdon Credit Union – and more generally of how credit unions work – is therefore essential for the successful promotion of Childcare Advance loans. Wider promotion of the credit union could also encourage parents to join the credit union as savers which would give them access to low interest credit when they need it.

B. More targeted promotion of the Childcare Advance loan through employers and childcare providers.As outlined in section 6 of this report, the potential delay between parents receiving information about Childcare Advance loans and starting work could be a barrier to taking out a loan. Reaching parents at the point they are about to start work, would allow the loan to be promoted most effectively. As the most significant stakeholders when a parent starts

work, employers and childcare providers seem well-placed to promote the loans.

Support through employers could continue to be offered through the credit union where the organisation offers membership to its employees.

The Childcare Advance scoping project told us that childcare providers need to charge fees in advance to manage their business so it is in both their and parents’ interests to make the payment of these fees as affordable as possible. Loans should therefore be promoted through local childcare provider networks so that they can signpost interested parents to the credit union.

C. Up-front costs of childcare should be included in broader support for parents to meet childcare costs.It is also essential that up-front childcare costs are not forgotten in wider proposals for support for parents with childcare costs, and Daycare Trust will continue to raise the issue through consultation responses, research and lobbying work.

For example, the new Universal Credit could be designed to allow parents to draw down some of their entitlement in advance of starting a job, with the amount repaid in instalments. Under the proposal made by the Social Market Foundation for a National Childcare Contribution Scheme, it would be possible for money to be drawn from parents’ accounts for up-front childcare costs as well as ongoing costs.

7. Recommendations of the Hillingdon Childcare Advance pilot project


Credit UnionsCredit Unions are financial institutions that are owned by their members. They provide services, such as financial advice, affordable loans and ethical saving options. There are Credit Unions operating all over the world and many operate on a local basis.

1. Had you previously heard of Credit Unions? p Yes, I had heard of them and I knew

what they did p Yes, I had heard of them but I didn’t

know what they did p No (If no, go to question 4)

2. Are you a member of a Credit Union? p Yes (If yes, go to question 4) p No

3. Why haven’t you joined a Credit Union? (please tick all that apply)

p I don’t see the benefit in joining p I don’t need the services of a credit union p I’m not really sure what they do p I already have a bank account Other (please specify) ..................................

Borrowing money Childcare can be expensive and parents sometimes have to pay up to four weeks fees up-front. We would therefore like to ask you about sources of help with your up-front childcare costs.

4. Would you consider borrowing money (from any source, including family members) to pay for the up-front costs of childcare?

p Yes p No p Don’t know/Not sure

5. From which of the following sources would you get help to pay for up-front childcare costs? (please tick all that apply)

p Family member p Friend p Bank loan/overdraft p Credit card p Payday loan p Doorstep loan p Credit union p None- I would not borrow money to pay

up-front childcare costs Other (please specify) ..................................

6. What is the most important thing you would look for when borrowing money? (please tick the three most important)

p Low interest rate p It is from a person/organisation I trust p There is a simple application process p I know someone else that has borrowed

money from that source/person p I can get the money quickly p The person/organisation is flexible about

when I need to repay the loan p I know the person/organisation will

understand if I have difficulty repaying the loan

Other (please specify) ..................................

Appendix: Borrowing money to pay for childcare survey


7. Thinking about the things that would stop you borrowing money to pay up-front childcare fees, please rate how strongly you agree with the following statements (1 = completely agree, 5 = completely disagree).

I wouldn’t borrow money (from any source) to pay up-front childcare fees because...

(Completely agree)

1 2 3 4

(Completely disagree)

5...borrowing money goes against

my personal valuesp p p p p

...I don’t want to get into debt p p p p p

...I can use childcare (not provided by a professional) that doesn’t

require up-front feesp p p p p

...I can afford to pay up-front childcare fees by without

borrowing moneyp p p p p

I wouldn’t use a bank loan/overdraft/credit card to pay up-front childcare

costs because...

(Completely agree)

1 2 3 4


5...I don’t want to have to pay back

any interestp p p p p

...I don’t think a bank would lend me money / I’ve been turned down for a loan, overdraft or credit card before

p p p p p

...I don’t think a bank would be flexible or understanding if I was

struggling to repay themp p p p p

I wouldn’t borrow money from a friend or family member to pay

up-front childcare costs because...

(Completely agree)

1 2 3 4


5...I feel it would be unfair to them p p p p p

...I don’t know anyone that would/could lend me the money

p p p p p

8. What is the maximum amount of money you would consider borrowing to pay up-front childcare costs?

From a professional lender such as a bank or credit union £ ................................

From a friend or family member £ ................................

Supported by

Daycare Trust is the national childcare charity, campaigning for quality, accessible, affordable childcare for all and raising the voices of children, parents and carers. We advise parents and carers, providers, employers, trade unions and policymakers on childcare issues.

Established in 1986, Daycare Trust has seen its campaigning translate into policy change, including the establishment of the national childcare strategy. However, access to quality childcare services is still dependent on where families live and on their income. Daycare Trust is uniquely qualified to give a voice to parents facing a multiple range of challenges. Please support our campaign for quality affordable childcare for all.

Daycare Trust 2nd Floor, 73-81 Southwark Bridge Road, London SE1 0NQ

Tel: 0845 872 6260Fax: 020 7940 7515Email: [email protected] Web: www.daycaretrust.org.uk

March 2012

Daycare Trust is a registered charity: 327279 and a company limited by guarantee: 02063604 registered in England and Wales.VAT registered: 830 9847 06. © All rights reserved Daycare Trust 2012

Government & Nonprofit

Executive Summary: Childcare advance project Hillingdon pilot project report 2012