30 hours free childcare: still complicated

31 May

Figures newly released from Wales, show that take-up of 30 hours free childcare per week – available to 3 and 4 year olds with parents in work – has been considerably lower than expected.  For a flagship government policy, aimed at improving outcomes for disadvantaged children, and at enhancing mothers’ opportunities in the labour force, this must raise questions in the corridors of power.

Back in 2015, when 30 hours free childcare was first slated in the Queen’s Speech, I wrote a blog outlining some of the issues which were likely to open up in the gap between rhetoric and practice.  In the intervening period it has remained one of my most popular pieces.  It’s a policy area where the solution offered seems simple, but which encompasses an impressive range of potential pitfalls.

Three main factors demonstrate the problems with the offer.  First, 30 hours free childcare is offered to children where parents are working – it is not a universal offer.  While children in some of the most disadvantaged families can access 15 hours free child care from the age of 2, and all 3 and 4 years can access 15 hours per week over the school year, the enhanced 30 hours offer is limited, at the lower end, to those earning at least the equivalent of 16 hours National Minimum Wage per week. The lack of universality is an issue, as some of the families where early childcare might be most beneficial, may not be eligible, due to lower or no earnings for at least one parent. Secondly, there is a timing issue.  As parents are not eligible for free childcare from the end of maternity or parental leave, the 30 hours can be viewed as too little, too late.  For parents who have had to go it alone in the period between their child’s first and third birthday, some may be unwilling or unable to change existing providers when eligibility eventually kicks in; others may have already done the calculation of costs of childcare (rising at rates of 7% last year) versus wage packet (stagnant), and left the workforce altogether.

Thirdly, providers are struggling (as was warned from the start) to meet the conditions of the offer without cross-subsidising the free hours through new charges elsewhere.  The hourly rate paid to providers by the government, may not reflect full costs, and has not been uprated this year.  The funding rate is complicated still further by interaction with other policies. Increases in the National Minimum Wage mean that staff are now more expensive, and auto-enrolment in pensions will make employer bills still higher, as outlined here.  Of course, such employment policies are positive in a relatively low-paid sector of the economy, but if funding for children’s places does not reflect these costs, a hole remains to be filled.  Some may bridge the gap by employing cheaper, less well-trained staff; others lower staff to child ratios.  Meanwhile, parents working longer hours will pay more for cover of hours above the 30 provided free. Some nurseries now charge for items (e.g. meals) and excursions that were previously included in fees.  Moreover, commentators have started to raise concerns that large-scale providers could go bust if the funding pressures become  greater. As local authorities provide fewer childcare services directly, private sector organisations are increasingly important.  A recent Guardian piece noted that commercial providers may be less accountable in terms of how they use government money, and distribute costs between themselves and parents. They also need to bring profit to investors. In more deprived areas the pressures may be magnified, as quality childcare is more patchily available, and there may be little capacity to cross-subsidise the free offer through additional charges elsewhere.

In her feminist takeover of the New European, Caroline Criado Perez today makes the case for universal free childcare as an integral part of achieving gender equality.  She points out that 25% of mothers in the EU cite unpaid care work as the reason for their lack of participation in the jobs market (compared to only 3% of men).  The UK has amongst the most expensive childcare in the region, so it is perhaps unsurprising that the partial solution on offer here is proving unpersuasive for many.  The generous policies of countries like Sweden, which provides daycare for all children at an enviably subsidised rate, alongside relatively well-paid parental leave, is beginning to prove a pull for workers from Britain, other parts of the EU, and beyond.  In an article for Swedish radio, an Irish woman talks about how being in Sweden means she can be with her child in the early months and not worry about costs when she returns to work, or about having to give up work altogether.  Thirty hours free childcare for 3 and 4 year olds in the UK still risks failing to meet this test for many parents.

 

 

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2 Responses to “30 hours free childcare: still complicated”

  1. Clare June 9, 2018 at 2:03 PM #

    Can I just point out that the 30 hours offer in England and the 30 hours offer in Wales are completely different policies, offered by different governments.

    • wonklifebalance June 9, 2018 at 5:16 PM #

      Hi Clare, Thanks for commenting. The terms of the childcare offer and issues raised by it are very similar in England and Wales. I could have been clearer that the Welsh policy is devolved and not identical – with 48 weeks covered per year it is a little more generous.

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