The UK can learn a lot from Norway on childcare

Compared with other countries, in the UK there are complicated and inefficient mechanisms for the public funding of childcare.

In recognition of the continued pressures on family finances, Ed Miliband has today made a speech about childcare policy, fleshing out the announcements made at party conference.

The proposals, if enacted, have the potential to make a difference to families. In the long-term, however, real reform of childcare is needed if we are to address some of the problems in the current system.

To its credit, the Labour Party has done much to improve access to affordable childcare in the UK, through its 1998 and 2004 childcare strategies and the Childcare Act 2006. Proposals which were seen as being bold in 1997 are now accepted by all the main political parties.

Perhaps one figure illustrates how much progress has been made. In 1992 there were just 56,000 nursery places in England and Wales. Today there are 1.6 million places.

Labour introduced free part-time early education for all three and four year olds. It started the process of extending free early education to younger children when in 2004 it made funding available to provide part-time free early education to vulnerable two year olds. The coalition has continued its support for this initiative.

The first Sure Start children’s centres were also set up in 1999, offering childcare and a range of integrated services to support children and their families. Today there are over 3,000 Sure Start centres in England, providing services that make a difference to the lives of young children – although the future direction of this service remains uncertain.

The previous government also increased its financial support to parents to help them pay childcare costs. It brought in employer-supported vouchers and since October 1999 tax credits have contained a childcare element, now worth up to £175 per week for one child in childcare and £300 per week for two or more children in childcare.

Despite these achievements, childcare is still unaffordable for many families and its costs a barrier to parents returning to work. Those just above the tax credit threshold are hit hardest. Twenty five hours of nursery care costs an average of £107 per week in England – nearly a quarter of annual earnings.

As a consequence, maternal employment levels for those with children under five – particularly for the least well qualified – are low compared with other OECD nations.

Too much childcare is poor quality and may do little to narrow gaps between the least advantaged children and their peers. There are gaps in provision for school-age children.

Childcare often does not work for parents who have atypical work patterns, for example those whose hours of work fluctuate from week to week.

The Labour Party has recognised some of these problems, as have the Lib Dems in a policy document launched at their conference. Labour has promised 25 hours of free nursery provision for three and four year olds, conditional on parents being in work. This announcement aims to make part-time work a real option and will be funded by increasing the banking levy.

Parents of children of primary school-age will also have a legal guarantee of wrap-around childcare before and after school.

Yet there are issues that are not addressed in today’s speech. Too much nursery provision is of poor quality. Labour has not stated its policy on Sure Start, which is now suffering as a result of funding cuts and lack of direction from central government.

Too much nursery provision is of poor quality, but it is only high quality early education that makes a difference to children’s development.

Compared with other countries, in the UK there are complicated and inefficient mechanisms for public subsidy for childcare – through tax credits, free nursery provision, childcare voucher, the new £1,200 voucher and schemes operated by Job Centre Plus and colleges.

Many experts now think that the UK should be looking to the best practice overseas and switch to supply-side funding of nurseries, childminders and school-based provision.

In Norway, private and public sector providers receive money from government to provide early education and childcare. Low income parents receive this for free or at low cost. Those on higher wages pay income-contingent fees. Providers are properly regulated and are obliged to ensure high quality to receive their payment. It is a much more efficient system and it guarantees quality.

This sort of bold reform may be needed to address the UK’s childcare challenges.

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4 Responses to “The UK can learn a lot from Norway on childcare”

  1. swatnan

    We are not Norway, a small insignificant country somewhere up near the Artic Circle.
    Lets develop suitable childcare policies for Britain.

  2. SonicJohan

    Norway, private and public sector providers receive money from
    government to provide early education and childcare. Low income parents
    receive this for free or at low cost. Those on higher wages pay
    income-contingent fees. Providers are properly regulated and are obliged
    to ensure high quality to receive their payment. It is a much more
    efficient system and it guarantees quality.

    To nitpick a bit, since I live in that particular country: There is a national maximum fee (ca 230 GBP per month for full-time). Municipalities pays their own and private providers the rest. There is no income-contingent fee for higher income earners, they just pay the maximum fee. Individual municipalities decides on reductions from the maximum fee, which usually takes the form of discounts for siblings, and some have reductions for income. This is principally a universal benefits system, not a means-tested system.

  3. Marie

    There’s an assumption here that people are entitled to childcare 0-5 and that childcare is the best solution/start for children and also that childcare is a top priority for taxpayers – it is not always the case! Plenty of surveys and research shows that people value more family time and the opportunity to take care of their own children – and that many people are concerned about children spending too long, too early in their lives in daycare. For some reason (gender politics maybe?) the narrative around childcare never even begins to question whether families want to live in this crazy way – ie juggling two jobs and racing kids off to some institutionalised care facility somewhere. What about love and family and relationships? On the one hand the children’s sector wants a ‘good childhood’ for children – and for families to be strong and nurturing – and on the other hand it does everything in a topsy turvy way, prioritising childcare debates over more imaginative solutions to work-life balance for families which might, for once a) question the underlying logic of replacement care for little abies 0-3 – please, let’s think of it from their point of view!!!! b) look at taxation of families so they get to keep more of their hard-earned income (thereby relieving pressure on family budgets) c) sort out escalating housing costs – ie housing should be based on maximum one income, not two. d) controlling debt culture which means people are working and using daycare to service debt – how sad! e) make sure employers pay a fair wage for a fair day’s work f) make sure there is less of a gap between the highly paid and the poorly paid – you only have to look at the allowances culture in politics and local councils to see what some people award themselves at the expense of lower paid hard-working individuals.

  4. David Dallimore

    As Jill rightly describes, the last Government did a huge amount to develop childcare in England, recognising its importance to achieving both economic, social and gender equality aims. In particular their focus was on moving parents (and women in particular) from benefits and into work thus helping to alleviate child poverty, reducing welfare dependence and increasing tax revenues. Yet what New Labour created was a hybrid, childcare monster based on a mixed economy which can never work.

    The reason government has to subsidise parents’ use of childcare (through the tax and benefits system) is that quite rightly, there need to regulations that protect children and attempt to maintain quality. In most childcare settings, the ratios of staff to children are controlled. With staffing being by far the greatest cost for most childcare businesses, and rates effectively set by the minimum wage, the costs of providing childcare services are to a significant extent ‘fixed’ by government and therefore the market for childcare is by any definition, dysfunctional. This results in high prices for parents and low quality for children as childcare providers try and squeeze a profit out of a faulty business model which only survives by being propped-up by government supply-side subsidies.

    However, what often seems to be forgotten in the debate in England, is the child. I completely agree that the only logical solution is to provide access to universal state-funded childcare. However, an increasing body of research tells us that children are best cared for by their parents when very young (under 18 months) and by high quality care and early education services as they get older. Freely available childcare therefore needs to be developed alongside increased paternal leave entitlement so that parents can care for their babies.

    The Labour Party in England needs to follow developments in Scotland and in Wales where a commitment to children’s rights (through the adoption of the UNCRC) is leading us towards a more Nordic model of childcare that focuses on children, and healthy child development as the primary goal of all early childhood services rather than childcare that serves more short-term economic goals.

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