- The UK has the most expensive childcare in the developed
world. 30% of two-earner household incomes are spent on
nurseries, three times higher than in Germany. A full-time
nursery place for a child under two costs on average approx.
£14,000 in the UK – around half median female earnings
- This is both economically and socially damaging - driving
women out the workforce, altering the demographic makeup of the
country and harming national productivity
- Over-regulation has caused costs to soar and minimised the
availability of cheaper, informal providers. No other European
country imposes equivalent burdens
- The Government has announced a consultation on changing
childcare ratios in England to mirror those in Scotland. A new
CPS briefing paper urges minister to go much further to deliver
cheaper childcare, at no cost to the taxpayer
- It argues that we should copy French rather than Scottish
childcare ratios; consider making the Early Years Foundation
Stage voluntary rather than compulsory; and rejuvenate the
childminding sector by cutting red tape
Britain has the highest childcare costs in the developed world. A
typical two-earner family in the UK spends around 30% of its
household income on nurseries and childminders, twice as much as
in France and three times higher than in Germany or Japan. This
is despite the state subsidising childcare to the tune of £7.1
billion annually.
Unaffordable childcare has disastrous social and economic
consequences, as women leave the workforce to avoid extortionate
childcare costs; this is a hammer blow to equality and national
productivity.
A new CPS briefing
paper today puts forward a threefold solution that would
deliver for families and the economy while bringing the country
in line with its European neighbours. All three could be
implemented without burdening the taxpayer with any additional
cost.
First, the Government must cut the excessive levels of red tape
around early childcare years and relax ratios. England has the
most stringent ratio regulations in the developed world, driving
up costs for nurseries and thus parents. The Government is
launching a consultation on moving to Scottish levels. But
studies have suggested that by relaxing child-staff ratios to
French levels, we could cut childcare costs significantly without
undermining safety.
Second, the Government should reassess the compulsory nature of
the Early Years Foundation Stage. The EYFS is unusual
internationally for mandating the equivalent of a full-blown
curriculum for children below the age of compulsory education. We
should assess whether EYFS ought to be scrapped, made voluntary,
or restricted in scope, with the central presumption being that
parents ought to have the right to choose the type of childcare
they want for their child.
Finally, we should seek to actively increase cheaper, informal
childcare and childminders. The UK’s unique burden of regulation
on early years childcare has resulted in a rapid decline in the
number of childminders - often a much cheaper alternative.
Numbers have halved in the last 20 years from 103,000 in 1996 to
34,800 in 2019. Reducing red tape in the sector and pushing these
numbers back up would enable parents to return to work and allow
nurseries to be more innovative and responsive in what they
offer.
Elizabeth Dunkley, report author and Researcher at the
CPS said:
“Even before the cost of living crisis struck, childcare
reform was urgently needed. Tackling the cost of childcare will
allow the Government to increase families’ spending powers and
remove significant barriers to women returning to the labour
market - two vital ingredients to producing the economic growth
the UK desperately needs.
"Failing to implement the changes set out today - which
impose no additional cost to the taxpayer - will represent a
significant missed opportunity to improve the lives of millions
of families across the country.”
Notes to Editors
- ‘Solving the Childcare Challenge’ can be
downloaded here
- Elizabeth Dunkley is available for comment
- For further information and media requests, please contact
Callum Price on 07796565754 or by email at callum@cps.org.uk or
Lauren Maher on lauren@cps.org.uk
- The Centre for Policy Studies is one of the oldest and most
influential think tanks in Westminster. With a focus on taxation,
economic growth, business, welfare, housing and green growth, its
goal is to develop policies that widen enterprise, ownership and
opportunity
