A radical approach to childcare costs, urging tax relief of up to £80 per week as well as subsidies for low earners who cannot afford childminding facilities, are urged in the new report.
The report, carried out under Partnership 2000, also calls for a broad range of measures varying from tax-free allowances for childminding earnings to incentives for the building of centres and employing workers to increasing the limits under the family income supplement.
All the measures are based on receipted expenses in an attempt to bring childcare in from the black economy. The group has also recommended that the tax breaks and allowances be available for seven years only before tapering off.
The main form of tax relief proposed is relief on receipted expenses of up to £4,000 a child for all children up to 12 years. This could be used by all families. However, as the group admits, it is least likely to be used by parents who work full-time in the home.
The group has proposed tax allowances of £4,000 a year for the first child under five and £3,200 for subsequent children. Allowances for children of five and over should be set at £2,000, the group said. The value of this allowance would be £1,040 a year, or £20 a week for the first child.
The group does admit that one of the most equitable ways to provide support for families irrespective of the parents' employment is an increase in child benefit. However, this is also very expensive - a weekly rise of £20 for children up to 12 would cost £728.6 million.
At the same time it has recommended that free or subsidised workplace childcare should no longer be treated as a benefit in kind for taxation purposes.
The group has also taken the likely move to a tax credit system into account. It has recommended that, if the system is introduced, all the recommendations in relation to tax, family income support and other measures should be replaced by refundable tax credits.
The group has proposed a special tax allowance solely for childminding earnings, while these earnings should also be disregarded when considering eligibility for social welfare and other benefits, such as medical cards.
These measures would be reviewed after three years. The relief would be available to people working in their own homes as well as those minding children in their homes.
This is expected to provide a real incentive to childminders to stay in and enter the industry, as well as bringing large numbers of people out of the black economy.
The group has also proposed that employers should be allowed to offset spending on childcare for their employees, whether by providing facilities, vouchers, or direct subsidisation of childcare places.
There is also a variety of proposals for lower-income families. The group has recommended that the specified income limit for Family Income Supplement be raised where families incur receipted childcare costs.
It has also proposed that the one-parent family payment scheme be expanded to increase the earnings ceiling to £16,000.