Childcare reform: are we throwing the baby out with the bathwater?
I have a one year old. He’s happy, cheeky, loves food (particularly bananas) and is always looking to make friends. He goes to an amazing nursery. Staff turnover is near zero, he sees the same people each day, has the most fantastic range of toys and I think, if given the option to stay there at weekends, could well take it. I should clarify that this isn’t some super deluxe childcare offering with trendy scandi furniture and a paleo diet. It’s just a really nice local nursery.
He’s getting the most incredible start in life, and it comes through in everything he does. The amount he’s learning, his confidence, his social skills. I hope some of it comes from me but nursery plays a huge part in his small world.
The pre-school childcare reforms currently being proposed by the government would seek to reduce the cost of childcare by changing the ratio of two year olds to each member of staff from four to five. Others have set out far more articulately than I could what this would mean for staff (I’m exhausted after a day with my small person one-on-one and struggle to imagine what caring for four, let alone five would feel like) and the likelihood that it’ll have little bearing on childcare costs.
I then wonder how these reforms would play out in practice. Does it mean the amount paid for free childcare by the government would be reduced? Does that mean nursery providers would withdraw from offering it? Would you end up with two tiers of nursery, those that do and don’t implement the new ratios. Most importantly, what does it mean for children’s development — if that’s less time each day someone’s focusing just on them. And within all this, who are the children that will be most impacted and it’s this last point that worries me most?
If these reforms come in, for some parents there’ll be the option of changing nursery to one that maintains the ratios. Or reducing their working hours so they can provide more of their own childcare, or getting family members more involved; taking more direct control so if their child is not getting that same emphasis on development at nursery, they can have more care at home.
But this isn’t the case for thousands of parents and their children, those on low incomes who don’t have the luxury of paying more for a nursery place or reducing their working hours. I understand that in the midst of a cost of living crisis there’s a need to look at every which way we can help families, and with childcare often exceeding housing costs it has to come fairly high up the list. However, if we want to take some of the financial sting out of childcare costs for those on low incomes, there are places other than childcare ratios we could start. There’s three in particular that I come across in our work at Citizens Advice that impact on families’ ability to access affordable childcare.
Firstly, for many starting work or increasing hours, childcare presents a huge financial barrier; Citizens Advice research found that for one in five parents on Universal Credit, childcare costs restricted their work options. While Universal Credit offers some help with childcare, parents have to meet the cost upfront and then claim it back (in contrast to the old tax credits system). At a time where the labour market is struggling and we need to be doing everything we can to support people into work, a simple change in government guidance to make it clear that something called the Flexible Support Fund (designed to help people into work) can and should be used to help with upfront childcare costs seems an easy win. And to be clear, this can’t just be used to defer that same upfront payment to the next month (which would happen if it’s treated as cancelling out childcare costs for month one), rather it needs to be a one off payment that helps parents overcome that initial financial barrier. The alternative is a return to the tax credits approach of paying childcare costs upfront. Either option would make a significant difference in removing the financial barrier to work posed by childcare.
Secondly, let’s make sure that the financial support offered within Universal Credit towards childcare matches the childcare market (and it is a market). At the moment parents can claim up to 85% of costs back for their first child (there’s a combined amount for two children) up to a total of £646 per month. This figure has remained unchanged since 2016 and doesn’t reflect regional variations in costs. As stands, that’s about enough, on average, to cover just over 25 hours a week childcare for a toddler, or, allowing for commute time, roughly three days. Again, if we’re serious about supporting people to work, we need to revisit the amount of support available under Universal Credit.
Thirdly, let’s make accessing help with childcare easier. There’s a plethora of different ways into free childcare.If you earn £15.5K or less post tax per year (roughly what you’d earn working full time on the minimum wage) then you can access 15 hours a week once your child is two, everyone can access up to 30 hours a week once their child is three, if you are on Universal Credit you can access support through the childcare element, if you’re not you can claim tax back on your childcare costs up to £2,000 pa. It’s a complicated system to navigate and almost impossible for parents to plan for their particular scenario. Yes, as with all social policy there’s a need for investment, but simplification would also have benefits in terms of helping parents know what support is out there. For example, combining the existing 15 hours offer for those households on the lowest incomes, with the maximum £646 available under UC, would mean being able to make something much closer to a universal free 2–3 year old childcare offer for low income families. Something far easier to understand and far easier to administer than the current patchwork.
I may not be a childcare expert, but I do have a sense that the current reforms are starting from the wrong place. Yes, in a cost of living crisis childcare costs are a major factor for thousands of families. However, let’s not improve childcare by watering it down, something that feels like a dangerous social experiment where it’s the children from lower income families who risk bearing the cost. Instead, let’s look at how we can boost access to childcare for those families — let’s take what we have and build it up, not pull it down. In short, let’s not throw the baby out with the bathwater.
