Whispers from Westminster

4th December 2015 at 00:00
We’re on the horns of a childcare ‘trilemma’

Imagine you’re at a rock concert. The headliners have just played their long-anticipated set and the majority of people in the crowd are euphoric. The singer throws his microphone down and struts off.

Then, almost apologetically, someone else picks up the mic, taps it, and announces that there will be a short follow-up set from a worthy but less heralded band. It’s hard to imagine that many of the fans streaming for the exits, talking loudly about what they’ve just seen, will be interested. Follow that, indeed!

This was the unfortunate position that the Department for Education found itself in at 3.56pm last Wednesday, when the second reading of the Childcare Bill followed on from the chancellor’s Autumn Statement. And that’s a shame, because for a number of reasons childcare is the most interesting and complex policy issue within the DfE at the minute.

The first reason for this is that the bill is (at present) being supported by Labour – a rare example of bipartisanship. As MP Lucy Powell said, both sides agree on the necessity of allowing more women to return to work, and on the importance of early childhood development.

The second is that it’s a diverse and pluralist sector. About 96 per cent of provision for two-year-olds and 60 per cent for three-year-olds is through private and voluntary providers – childminders, nurseries, playgroups and the like. On the demand side, the government acts as a (partial) buyer of services, but some estimates say private contributions match or exceed this. This mixed market means that the government has to play a very different role than it does with schools.

And the third reason is that childcare is a public policy trilemma. Ministers need to grapple with how to achieve three goals: it must be affordable (to parents or the state), high quality, and with sufficient places. It is possible to achieve any two of these, but all three is tricky. Consider these facts:

l 29 per cent of women calculate that returning to work isn’t financially worthwhile because of the high cost of childcare

l A third of childminders and 16 per cent of nursery staff aren’t qualified to even level 3

l There was a 42 per cent increase in vacancies in nursery staff from 2011 to 2013, due in part to low pay

l The new national living wage will put significant cost pressures on some providers and potentially make them unviable, given how small their margins are

l The government spends above the Organisation for Economic Cooperation and Development average on childcare, at 1.1 per cent of GDP.

Which of those issues would you address first, and how would you stop action on one making some of the others worse?

This government’s answer is 30 hours of free childcare for working parents (up from 15), and tax-free savings for childcare. This represents a hefty further investment – another £1 billion a year by 2019 – and an increase in hourly funding for providers. It’s sure to be welcomed by parents. But will it solve the childcare trilemma?

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