Cost benefit analysis

DoreenMassey4x3.jpgDoreen Massey on giving parents better access to childcare where and when they need it

Childcare options for parents are complex and expensive yet many parents use it because they work to boost family income, because of pressures of the workplace, taking time out or their desire to combine a career with having children. What parents want is care where the child will be safe, happy and stimulated. And parents go to some lengths, whatever the cost to secure that. 

Some facts are clear. Since the last election, the cost of nursery places has risen by 30% - five times faster than pay. The average cost of a nursery place of 25 hours a week has risen to £107. There are 576 fewer childcare places. 1 in 3 councils do not have enough capacity. 91% of nursery care, and most of pre- and after- school care, is provided by the private and not-for-profit sectors. A parent buying 50 hours of childcare a week for a child under two will face a Bill of around £11,000 a year, rising to £14,000 in London. The situation for a disabled child is even more problematic and prevents or discourages parents of these children from working.

The Government announced last year that it would spend an extra £1bn a year on 600,000 families eligible for Universal Credit who will be potentially eligible for extra childcare support from 2016. And also that 2.5 million higher earners not eligible for Universal Credit will be able to claim tax-free child care through a system of vouchers worth up to £1,200 a year per child. Meanwhile, Ed Miliband has announced that an incoming Labour government would extend free child care for three and four year olds from 15 to 25 hours a week, funded by the bank levy; and also increase the legal guarantee of access to wraparound care from 8am to 6 pm at primary schools. 

Many professionals in the field of childcare and family welfare feel the system in England and Wales is fragmented, with challenges about profitability in the private sector; and they want to see vision, direction and a long term strategy from all political parties. They suggest a simpler funding system, rather than the multiple streams we have now. The Scandinavian model gives power and funding to local authorities to plan local provision and gives parents legal access to services.

An interim report from the Institute of Public Policy Research suggests childcare in the UK could pay for itself over time by attracting mothers back into the workplace, as it would generate £1.5bn in tax revenues and make savings in benefit payments. Either way, the system needs simplifying, with better access to a free offer of care where parents feel in control of where and when they access it.

Baroness Doreen Massey is a backbench Labour Peer

Published 9th January 2014

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