Since the start of this year I have been campaigning with parliamentary colleagues on the issue of childcare. Last month we presented a written submission to the Chancellor, setting out our proposals ahead of the Budget.
Approximately 65% of parents of children aged 0-4 access some form of formal childcare. Recent figures show that, on average, 26% of parents’ joint net income goes on childcare with a third of parents saying childcare is one of their most expensive living costs.
This has an impact in other areas. Whilst we have high female participation in the labour market overall, women are far less likely to be in full-time employment and the cost of childcare is a contributory reason for this. Women in part-time employment are less likely to secure promotion than their full-time counterparts, therefore childcare does not just present households with higher costs but indirectly supresses earning potential.
The current scheme is complex – comprising eight different subsidy schemes which are costly to administer and can lead to irregular outcomes. I have worked closely with early years providers in West Berkshire and have heard directly from them about ways the system could be improved. I have also heard from busy parents – to whom I can relate – about affordability and accessibility.
I think there are some immediate steps that the Government should take and in addition that there is a strong case for deeper reform in the long-term.
First, I think there it is vital to increase funding to nurseries for the 15- and 30-hour offers which apply to preschool aged children. The take-up of these schemes is high yet providers repeatedly tell me that current funding does not come close to covering staff costs, putting some at risk of closure.
Second, I would like to standardize the business rate exemption that currently applies to nurseries attached to primary schools but not to independent or voluntary-run settings. This could be an effective tool in bringing down overall costs.
Third, we need to make it easier for childminders to set up and get started. Childminders are important providers because they offer low-cost, flexible care and are often willing to extend hours into the evening which can make them ideal for working parents. It can be attractive work because childminders have the advantage of being able to work from home. One way to increase their numbers is through the use of agencies who can provide umbrella support to individuals with regulatory and safety issues, managing budgets and professional development. I’d like the Government to incentivise childminder agencies with a payment of £1,000 for every new childminder they register who starts trading.
Finally, I think we can make Universal Credit work better in relation to childcare. At present, only 13% of eligible parents take up the offer because they have to make an initial upfront payment and take on debt before they are reimbursed. This creates an obvious barrier at the start.
These are just some initial ideas. But overall I want the Government to make help for families with the cost of childcare a priority.