SOCIAL MARKET FOUNDATION
Chapter 5: road-testing the idea So far this report has made the theoretical case for a National Childcare Contribution Scheme (NCCS). It has argued that the NCCS should be fiscally neutral, progressive and increase take-up of formal childcare. There are clearly tensions between these objectives, as discussed in detail in Chapter 4. The more generous a scheme is to parents, the less likely it is to be fiscally neutral. The challenge is to find the balance that works for parents whatever their circumstances and preferences, but also works for taxpayers. This chapter illustrates the work conducted by the SMF to do just that. First, modelling was conducted to identify the sets of design parameters that could result in a fiscally neutral scheme, based on plausible assumptions about the current and future earnings of those taking up the scheme. This demonstrated that the policy objective of fiscal neutrality was theoretically possible. Second, having identified parameters that could – in theory – meet the objective of fiscal neutrality, a representative poll was conducted to find out if such a scheme would be at all attractive to parents. The findings demonstrate that there is significant interest among parents of all incomes; the findings indicate the kinds of design features that are important to parents; and the findings suggest ways in which availability of the scheme might change parents’ use of childcare.
Modelling There are any number of permutations for the eligibility, distribution and parental contributions within the NCCS. These were set out in Chapter 4. Together, these might be called policy design parameters. Some of the parameters for eligibility and distribution have already been determined in Chapter 4. But some parameters
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