The childcare debate heats up


While hardly mentioned in the mid-term review, a key part of the coalition’s ‘renewal of vows’ will be next week’s launch of the Childcare Commission, which aims to make childcare more affordable for working parents.

At present, Daycare Trust’s annual childcare survey shows that across Britain nurseries cost an average of £4.10 per hour – more in London – and an after-school club about £45 per week. The government is looking at a flat rate tax break and the deregulation of childminding in order to relieve parents’ financial burden.

Leaks from the Department for Education have suggested a new flat-rate tax break of £2,000 to allow parents to pay for childcare. At the moment childcare vouchers work in this way, allowing some parents to pay for childcare pre-taxation. While the proposal is welcome, it does little to make childcare more affordable for those parents who pay little or no tax and have seen the financial help that they can get with childcare costs scaled back since 2011 through cuts to tax credit support.

There are also further mooted changes to tax credit support for the parents of the over fives. At the moment low income families can receive help with up to 70 per cent of their childcare costs through tax credits, up to maximum cost levels of £175 per week for one child in childcare and £300 per week for two or more children (help was set at 80 per cent of costs until 2011). Officials have been looking at cutting this support for families with over fives who may be using after-school clubs or registered childminders. While nurseries can be costly, childcare costs of older children can also mount up. For a family with two children using 39 weeks of after-school childcare and four weeks of holiday childcare per year, the Daycare Trust estimates their costs will be £4,300 per year, a large financial strain on a family with a modest income.

Elizabeth Truss, minister with responsibility for childcare, also believes that childcare would be more affordable if regulations were relaxed. Government is looking at allowing childminders to care for more children. At the moment a childminder working by themselves can care for up to six children under eight, providing no more than three are under five. But many professionals, including childminders, have argued that changing the care ratios risks compromising safety and that childminders are unlikely to pass on to parents the savings made by changing the ratios.

The government will also roll out its response to the Nutbrown review of qualifications into the childcare commission. The independent Nutbrown review proposed suggestions to improve the skills and qualifications of the early years sector in England; this is important as staff qualifications are the factor most strongly linked to quality in nurseries. All research has shown that it is only high quality nurseries that bring about better outcomes for the most disadvantaged children. The early years’ sector is an under-qualified sector in the UK with only nine per cent of early years’ workers having a degree level qualification in 2011. Some 16 per cent of childminders had no qualifications at all in 2011.  The government’s response to Nutbrown will make interesting reading, as many in the early years sector belief that it is poor pay that prevents recruitment and retention of the best qualified and most skilled early years’ workers. The Department for Education’s own survey showed that average pay for non-supervisory staff in a nursery was £6.60 in 2011, just above minimum wage.

Elizabeth Truss has brought energy and commitment to the childcare debate, but tax breaks and de-regulation are unlikely to solve the childcare challenges faced by families. While much has been achieved since a newly elected Labour government published its childcare green paper in 1998 – with about 1.5 million new nursery places since then and free part-time nursery places for all three and four year olds, much more is needed in order to stop childcare being a barrier to work. The government could look at practice overseas and introduce a simpler and more efficient subsidy target at providers, rather than today’s expensive, complicated and inefficient support system. In Norway, public subsidies go straight to the nursery or club, which in turn has to deliver high quality care or face funding cuts. A simple provider subsidy could be combined with income- contingent fees for higher income groups, as happens in France.

The IPPR is among the organisations which have argued for free early education to be extended to more two year olds. We also need to look at the childcare needs of parents who work outside normal office hours and cannot turn to partners or relatives to provide childcare. And we need to ensure that more parents benefit from family friendly work practices, such as flexible working and term-time work contracts.

When the full details of the Childcare Commission emerge next week, it does not look like root and branch reform that will increase affordability, flexibility and quality. However, childcare will remain high on the political agenda in the run up to the next election, with Labour also committed to improving childcare provision. It is unlikely that this will be the last childcare review.

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