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Costing the creche: should parents call for universal childcare?

Children watching TVChildcare - and its affordability - is a hot issue for many parents. Deciding whether one parent should stay at home is often a tortured subject - and for many families it's a debate they can't afford to have.

In this guest blog, Mummyisagadgetgeek reports back from a Progress debate about all things creche, and asks: should government provide universal childcare?
 

"The cost of childcare is something that makes many a parent quake in their financial boots. And no wonder: on average childcare costs make up 27% of household expenditure.

Many parents will be asking, why bother going back to work? But with the cost of living increasing, it’s an economic reality that a large proportion of households require a dual income stream simply to keep their heads above water.

Should the government provide free childcare for working families? Tell us here.

The Labour party is considering a universal childcare system, to ease the burden on parents… but what does this actually mean? Could it actually work? And, of course, in a time of austerity cuts and budget tightening nationally - where will they find the money?

Universal childcare is a system where all children between the ages of one and five would be entitled to free, quality childcare, should their parents wish or need to use it. The Nordic childcare systems are often quoted as examples of this – and it’s interesting to note for example that in the U.K. currently, only 33% of under 3’s are in childcare, compared to 73% in Denmark. The reason for this is not only the lower cost; there is a real trust in the quality of care by parents and wider family members.

But how easily could this system translate into a workable U.K. solution?  Patrick Diamond, co-author of the Labour Purple Papers, identified three main considerations:

1.  The scale of the challenge faced – currently there is a huge gap in provision, caused by prohibitive costs, inconsistency in hours of coverage, and a somewhat mixed picture when it comes to quality of care.
2.  Major political constraints – basically, childcare just isn’t very high up on the list of priorities. This is because a lot of voters don’t have children, and some may resent extra priority being given to families – even if the societal and economic return from this could be of benefit to everyone. Not only this, but some voters feel that mothers should not be going out to work in the first place!
3.   Possible solutions – where is the money going to come from? Various options have been bandied around, including balancing tax credits to focus more on the supply side (ie: funding more government childcare rather than private) and less on the demand (less giving of tax credits to pay for expensive childcare); utilising an intergenerational system of taking money from the affluent elderly and redistributing this to early years provision (ironically removing universality from those of pensionable age); taxing capital wealth and property more efficiently; or looking at the role of employers who are, of course going to be one of the big groups that benefit from this...basically there are lots of possibilities, but all of them are going to offend someone (see point 2!)

And of course, that’s the real problem. Because whichever way you look at it, everything comes back to money.

Stephen Twigg, the Shadow Education Secretary, spoke about the ‘long term fiscal black hole’, and the fact that, were Labour to come to power in 2015, they would inherit an incredibly difficult economic situation. So would it be possible to achieve a universal system of quality preschool childcare in an age of austerity?

Of course, one of the advantages of such a system would be economic. Labour and their minions have done the maths, and they predict that for every mother returning to work, the economy will benefit to the tune of £20,050 over the four-year period that the child would be in childcare because of the tax revenue generated - and that’s after deducting the cost of the childcare. This figure doesn’t include what they call ‘multipliers’, either – the VAT returns from increased spending power, and the reduction in the benefit bill.

So in this respect, there would be a strong return for the exchequer, and not all the money needs to be found upfront from playing around with all the existing pots. Sounds pretty simple to me on the face of it, but of course there is always a spanner in the works.

What do you do about people who aren’t ‘average’ - the ones who don’t fit into this neat little prediction? Some mothers, for example, work atypical hours – shift work, ad hoc work, differing shifts each week – and the costs of overnight, sporadic, or 24/7 availability childcare aren’t going to be the same as the Monday-Friday, 9-5 scenario. The economic argument needs a lot more work before it can provide a truly compelling justification for universal childcare.

From a social justice point of view, there is overwhelming evidence that quality Early Years care can make a massive difference to life chances, leading to a more equal society. But would it also take away something that most people hold dear – freedom of choice? Polly Toynbee made the point that you can’t have high quality childcare and expect to make money from it, and therefore it’s of no use to rely on the private sector. If you take the private sector out of the equation, however, all that parents are left with is whatever the government has on offer. Perhaps not a thought to be relished?

My own view?  I (and my groaning wallet) would love cheaper, high quality childcare. But  - if you consider again the Nordic systems, the culture that supports them, and the years and years it has taken to reach the point they are at now - it seems unlikely that the U.K. could achieve anything similar simply by identifying some money and putting the scheme in place. Before a putative Labour government could really introduce a system that works, they might need to concentrate on driving innovation in the current sector; looking at alternative models such as co-operatives or mutuals, and helping lead society towards a culture that values its children and doesn’t simply see them as a [cut] nuisance who should be seen, and not heard."

What do you think? Should the government provide free childcare for working families? Let us know.

Mummyisagadgetgeek blogs about baby gadgets, mummy gadgets, breastfeeding and bringing up two kids over here.

 

 

 

Last updated: 09-Apr-2013 at 4:26 PM