Editorial: Time to fix the broken economics of childcare

The average yearly bill for a full-time nursery place is now a staggering £11,000

Share
Related Topics

Amid the freezes, squeezes and outright cuts assailing so much of Britain’s economic life, the Chancellor hopes to sweeten his Budget later this month with some much-needed relief on the high cost of childcare. Given that nursery fees routinely swallow anything up to a third of family income, any moves to defray the expense can only be welcome. But it will take more than a little tinkering around the edges to solve one of the more far-reaching social issues facing policy-makers today. 

If George Osborne needed further evidence of the need for government action, the latest research from the Daycare Trust more than provides it. According to the charity, childcare costs have shot up at more than twice the rate of inflation over the past year. The average annual bill for a full-time nursery place for a child under two is now a staggering £11,000; for an older toddler, it is even higher. Childminder fees and charges for before- and after-school care are also sharply rising. Nor is the problem new: costs have ballooned by more than three-quarters over the past decade, even as the economy has sunk and salaries stagnated.

The result? An estimated one million people “missing” from the labour market – the vast majority of them women – because it makes more financial sense to stay at home and look after the children than to pay someone else to do so. That means swathes of households missing out on an extra wage. It means children missing out on vital early-years education. It means gender inequalities reinforced by mothers’ stop-start careers and smaller pension pots. It means economic potential wasted and less tax rolling into the coffers of the state. In short, the status quo is bad for everyone.

Government efforts to tackle the issue are, then, to be welcomed. Some tweaks have already been made. Thanks largely to Nick Clegg, the entitlement to 15 hours of free nursery care each week has been extended, the system has been made more flexible to accommodate the working day, and the ratio of children to carers has been increased.

Now, ahead of the Budget, the aim is to address the issue of cost directly. Coalition negotiations pit the Chancellor’s long-held desire for childcare to be made tax deductible, against the Deputy Prime Minister’s preference for extra help for low-earners. Either way, however, the proposals are only making up for losses elsewhere – in Mr Osborne’s case the crimp on child benefit for higher-income households, in Mr Clegg’s the tightening of tax credits and other benefits payments. Neither are sufficient to bring Britain into line with other European countries against which, on this measure at least, we score so poorly.

Take Denmark, for example. More than nine in 10 young children have full-time nursery care and more than four out of five mothers work. Here, the proportion is only slightly higher than 60 per cent. The big difference? Danish families pay a maximum of 25 per cent of the cost of childcare – some of them nothing at all – and the government picks up the rest of the tab.

In the current climate of relentless fiscal austerity, the case for extra state spending is tricky to make. But the social and economic gains from putting an end to Britain’s ill-conceived, patchy and anachronistic childcare arrangements can hardly be overstated. And there is much that can be done, even within the Chancellor’s deficit-reduction targets. Calling time on perks for wealthy pensioners would be a start; and money earmarked for child benefit would be better channelled into the provision of services rather than handed out as cash. None of the solutions are easy. But a few minor adjustments will not suffice.

React Now

Latest stories from i100
iJobs Job Widget
iJobs General

Tradewind Recruitment: Geography Teacher

£90 - £140 per day: Tradewind Recruitment: We are currently looking for a Geog...

Tradewind Recruitment: Phase Co-ordinator for Foundation and Key Stage 1

Negotiable: Tradewind Recruitment: Phase Co-ordinator for Foundation and Key S...

Tradewind Recruitment: SEN Teacher

Negotiable: Tradewind Recruitment: SEN Teacher We have a fantastic special n...

Tradewind Recruitment: History Teacher

Negotiable: Tradewind Recruitment: My client is an 11-18 all ability co-educat...

Day In a Page

Read Next
 

If I were Prime Minister: Every privatised corner of the NHS would be taken back into public ownership

Philip Pullman
 

Errors & Omissions: Magna Carta, sexing bishops and ministerial aides

John Rentoul
Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee