A Childcare System Purely Designed To Get Parents Back Into Full-Time Work Is Not One We Should Aspire To
April 2, 2023
“We will introduce 30 hours of free childcare for every single child over the age of 9 months.” So said the Chancellor in the most eye-catching part of the Spring Budget. What’s not to like? As Jeremy Hunt himself said, “We have the one of the most expensive systems in the world.” About 80% of us have children at some point in our lives so it’s an issue that affects millions of people.
But is the announcement all it’s cracked up to be?
Let’s start with the present day. The ‘30 hours free childcare’ message is everywhere – the Government’s spin machine is alive and well. Parents of 3-and-4-year-olds are already supposed to get it, provided both work at least 16 hours a week. But as a parent in my team explained, that’s not how it works in practice.
Now, bear with me here – this gets complicated. He and his wife pay £435.20 a month for his 2-year-old to attend nursery 2 days a week (20 hours) – that’s £5,222 a year. They pay for it using the tax-free childcare system – basically a Government bank account. For every £100 they transfer to the account the Government tops it up by £20. So the £544 a month bill they get from the nursery is really £435.20.
Confused? It gets worse. When his daughter turns 3 they become eligible for the ‘free’ scheme. That brings the initial nursery bill down to £320.27 a month which comes down further to £256.22 when paid for through the tax-free childcare scheme. So it will be £178.98 cheaper than it is now. But £256.22 a month or £3,074.64 a year is not ‘free’ by any definition of ‘free’ you’ll see in the dictionary
Well done if you’ve followed that. It’s complicated.
But why is it so complicated? Accident or design? Only a third of families are eligible for tax-free childcare in the first place. And of that third, only half take up the offer. So that’s about one in six families benefit. So it’s not a massive surprise that in the four years the scheme has been running, the Government spent £2.3 billion less on tax-free childcare than it had planned.
Complexity is our enemy. Simplicity is our friend. Make a scheme complicated and time-consuming to use and, hey presto, a lot of people won’t use it. Make it simple to navigate and they will.
What are we trying to achieve?
Most parents I speak to want a balance. Yes – they want to spend time with their kids as they grow up, particularly when they’re very little. But they want to work too. A system purely designed to get parents into full-time work is not one we should aspire to. Treating childcare simply as a business rather than a vital public service does not serve children and their families well.
It doesn’t serve nurseries well either. 4,000 providers closed down last year. Partly because the Government doesn’t fully pay them to deliver the ‘free’ offer. Nationally the gap between what the Government gives them and the true cost of delivering the ‘free’ hours is £1.82 billion. It forces them to charge higher fees for 1-and-2-year-olds. No one in the Treasury seems to have any idea what will happen when nurseries can’t do that anymore.
But childcare isn’t just about nurseries and nurseries aren’t just about childcare. Nurseries are about early years education too and we know that the first 1,000 days have a big impact on the rest of a child’s life. Too many children in the North East aren’t ready to start school when the time comes. So in the North of Tyne we’re funding 100 schools to provide extra help to kids in reception and those of pre-school age.
We’re also funding after school clubs in 22 schools because we know parents need that support now, not in 2026 when the Chancellor’s pledge on wraparound care is set to start.
I had the opportunity to look after my boys full-time when they were younger. It was time well spent. Giving every parent the choices and opportunities that I had is what the childcare system should be all about.