In the run-up to Chancellor Hunt’s first Budget there has been
media speculation about possible reforms to help parents with the
cost of childcare, amid a wider review ongoing within government
of workforce participation. Here we bring together a very brief
summary of the key evidence on this issue, including: what is
currently on offer, how childcare is used in England and what
this means for the Budget.
Read the new IFS
briefing here.
Christine Farquharson, Senior Research Economist at the
Institute for Fiscal Studies said:
"The current early years system in England is a mish-mash of
eight different programmes, layered on top of one another with
different eligibility rules and means of delivering the support.
It is difficult for parents to navigate and even to know what
they are entitled to - resulting in low take-up of several
strands of support. These problems have been compounded by high
levels of inflation and rises in the minimum wage which have
pushed up childcare providers' costs, eroding the value of
government funding and raising prices across the board.
It is unlikely that Mr Hunt will be able to fix all of the issues
in the childcare market next Wednesday. However, there are
several problems that he could take aim at. These include low
awareness of tax-free childcare and support via the benefit
system, reimbursing benefit claimants for childcare in arrears,
and the long freezes in the caps on support. But in the long
term, the real prize is in moving away from piecemeal tweaks
towards a clear strategy - where the government sets out what it
wants to achieve through childcare funding, and designs a
coherent policy to deliver it."
ENDS
Notes to Editor
'Early years and childcare in England: Public spending,
private costs, and the challenges ahead' is an IFS comment
by Christine Farquharson, Rob Joyce and Tom Waters.
