The Government-run scheme works like an online account. You pay money in an account from your net pay, this means it is deducted after tax and National Insurance.
If you are eligible it offers £2,000 of childcare costs, per child, per year for children under 12 (or under 17 if they have a registered disability). For every 80p you pay in, the Government will top up an extra 20p. This is equivalent of the tax most people pay - 20%. The Government will top up the account with 20% of childcare costs up to a total of £10,000 - the equivalent of up to £2,000 support per child per year (or £4,000 for disabled children).
More information is available from the Government websites:
The voucher scheme is closed to new entrants. However, parents who already use the childcare scheme will be able to continue to remain in the scheme for as long as the scheme runs, unless they cancel their childcare vouchers or leave the University.
Childcare vouchers are an alternative to the flexible benefits scheme (.pdf).