A record number of families are getting support from the government to help cover the cost of childcare.

The tax-free childcare scheme tops up cash families pay into a pot for services such as childminders, nurseries and nannies.

HMRC figures show some 3,245 families in Brighton and Hove used the scheme in the year to March 2023 – up from 2,670 the year before.

It was the highest number since records began in 2017, when it was 450.

But the scheme has been branded “regressive” and is said to favour families with a disposable income rather than those with less money.

Neil Leitch, chief executive of the Early Years Alliance, said countless families are still unaware they are eligible to receive support through it or that it exists at all.

He said: “What’s more, it remains an entirely regressive policy, with parents with more disposable income receiving more financial support than those with less.”

Families get £2 for every £8 they put into an account set up for childcare spending, up to £2,000 per child per year, or £4,000 for a child with a disability.

The scheme is available for children aged 11 and under, or 16 and under if they have a disability, however not all children qualify for tax-free childcare.

Applying parents must be in work and earning at least the equivalent of the national minimum wage or living wage for 16 hours per week.

Those claiming Universal Credit, tax credits or certain other benefits, or when one parent earns more than £100,000 would be ineligible.

Mr Leitch said childcare providers are being forced to raise fees due to “sustained underfunding” and the sector is facing “even greater pressure” with early entitlements soon to be expanded.

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But a government spokesman said it is spending more money on childcare than ever before.

“Last year we announced the single biggest childcare investment this country has ever seen, saving parents up to £6,500 on average and helping tens of thousands back to work,” he said.

“Take-up of tax-free childcare continues to grow and roughly 60,000 more families used it in November 2023 compared to the year before.”