Think tank pushes for radical extension to state funded childcare
Every family with children under 5 should get help from Government with the cost of childcare, according to a new report from the think tank IPPR.
At the moment, most families get no free hours until their child turns three. Under the IPPR plan, lower income families would benefit most but help would be extended to every family.
The report argues that prioritising childcare policy makes sense because it would improve children’s development, boost the employment rates of parents, particularly mothers, and allow parents to make better choices about sharing work and childcare. The report shows that by 2020, £750m could be saved in extra taxes and lower benefits, because the new system could help around 150,000 mothers back into work.
Based on average childcare prices, a typical family with two children aged one and three, each using 35 hours of childcare per week, faces costs of £1042 a month.
This family would receive £313 a month towards their childcare costs, after accounting for their 15 free hours for 48 weeks and the additional hours purchased by parents. This is £105 more than they would receive under the government’s proposed system of tax-free childcare, and means the family would pay £730 a month.
A family using the same amount of childcare, but who are in receipt of Universal Credit, would receive £990 a month towards the cost of childcare, £80 more than they would receive under the government’s proposals. This would leave them with monthly net childcare costs of only £52 a month.
The report recommends:
Extending 15 hours a week of free early education to all 2 year olds (currently only the 40 per cent most disadvantaged families benefit).
Extending 15 hours a week of free early education for 2-4 year olds to cover 48 weeks per year (currently 38 weeks).
Extending support to cover 95 per cent of childcare costs for families who will be claiming Universal Credit (from 85 per cent) and 30 per cent of costs from those eligible for tax free child care (from 20 per cent) – with a guarantee that childcare places are available locally for 1 year olds, as well as older pre-school children.
Raising qualifications across the sector and ensuring that settings delivering free early education are graduate-led.
A new 1 month ‘daddy quota’ of parental leave paid at the National Minimum Wage.
Dalia Ben-Galim, IPPR Associate Director, said:
“Our plan for moving towards a universal, high-quality and affordable system of childcare, combined with reforms to parental leave, would meet three core objectives: supporting children’s development; boosting employment rates for parents, particularly mothers; and advancing gender equality."
The IPPR report argues that, over time, funding for childcare and early education should be shifted from tax reliefs and credits into supply funding for providers, with price controls to ensure that parental fees are capped. It says that the extension of childcare and early learning should take place through Children’s Centres, nursery schools and other local institutions shared by parents and communities, rather than through cash benefits or tax reliefs.
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