It isn't a waste of money at all; lack of affordable childcare is the singular biggest issue in this country impacting on working parents.
I don't know what it is about the UK, but childcare costs here are crazy. The going rate in here is the luxury rate in America; what most people pay for private care here (forget London) is the bells and whistles fancy nursery rate in America.
If I had to guess, the problem is OFSTED pushing up prices (though the flip side is they push up quality too), various rules about room sizes (flip side is that we avoid crowding) and simply not enough competition. I don't want to start a benefits fight here, but I know of a few women who wanted to do after school care or childminding, but decided childminding is too difficult (no argument from me!) and wasn't worth the effort over collecting benefits.
But yeah. I have spoken to swedes, french, canadians, and americans (all wealthy nationalities of course) and their jaws drop when I tell them how much childcare costs in the UK. This is not a conversation you want to have with people from abroad. it will make your blood boil.
Also, not to sound bitter, but we totally missed the boat on this one. My big childcare costs are in the past. it would have been nice if this came in a few years ago!
Finally, subsidies sound nice, but if people can afford more through subsidies, that will push prices up further. It seems to me that you want to address the supply side, not the demand.