Childcare and the budget: what should we hope for

On Saturday, the front page of The Guardian read Tories plot childcare giveaway in budget with the story giving detail about the various expansions to the funded early education entitlements being looked at by the Department for Education ahead of the budget. This comes at a time when childcare is becoming ever more unaffordable for many families struggling with the pressures of the cost of living. Many parents will have read the headline and felt some hope that their monthly battle to pay their childcare bills could be coming to an end.

It is fantastic to see the recognition that childcare is an excellent investment, even during times when public finances are stretched. Unfortunately, this may not be the silver bullet to end families’ childcare woes. Instead these proposals could push the childcare system to the edge

Childcare holds the potential to change families’ lives: it enables parents to work and it boosts children’s outcomes, including narrowing the attainment gap between disadvantaged children and their peers that opens up before they even start school. It also means that employers and employees have reliable and skilled colleagues in the workplace. But the system we have at the moment is not achieving this potential. Childcare is too expensive for families, with many parents, and mothers in particular, finding that childcare costs mean that they simply cannot afford to work. The professionals caring for and educating our young children are often barely paid above minimum wage. The Government funding rate is not enabling providers to focus on pushing up the quality of childcare. Some providers are struggling to stay afloat and many are closing or restricting hours or numbers of children.

We need complete reform of the system. Although the idea of more funded hours is likely to appeal to parents and could make childcare more affordable in the short term, it holds a real risk of increasing childcare shortages. For many childcare providers the cost of providing childcare is higher than the funding that they receive from the Government, so they have to put up prices for parents. Some childcare providers are unable to make the finances work even with the current offer of funded hours – asking them to provide more Government funded hours could push them to the brink. Our research has found real pressure on the sector, with childcare providers already taking steps that could reduce the quality of provision to keep going.

Over recent decades we have seen a lot of well intentioned investments and new childcare policies. Each of these have somewhat helped some families. But the system is now overloaded, overly complex and not achieving its potential. It is incredibly exciting to see that the importance and urgency of childcare change is being recognised and we welcome the possibility of new investment. But it must be investment that strengthens the system and makes a real difference for children and families.