The coalition needs to improve the quality of childcare, not just the cost

There is a gulf in the quality of childcare available to parents in prosperous areas and those in deprived areas.

“I don’t need childcare, I have a wife.” This was one of the responses to a recent survey we carried out for our upcoming report on childcare. The government is right to worry about the equality of choice for women when attitudes like this still exist.  

Women’s employment rates since the birth of a child never reach the same level as men’s, even after their children are teenagers.  Yet, increases in female employment have been shown by recent analysis to be the key driver of increases in wealth among low and middle-income families in the last 50 years. Finding the right kind of high quality and affordable childcare, which makes a return to work financially viable, is rightly high on the political agenda as we kick start 2013.

Analysing Ofsted inspection marks from last year, Policy Exchange has today highlighted a gap between the quality of childcare available to parents across the country. Three quarters (77 per cent) of childminders were judged "good" or "outstanding" by Ofsted last year compared to only 61 per cent of childminders working in more deprived areas. This is deeply worrying as we know that high quality early years education improves children’s life chances.  Research has shown that in terms of vocabulary development, the poorest children are the equivalent of 16 months behind those in the highest income families. 

Our report also highlights that only 1 in 10 childminders and just over 1 in 5 daycare staff hold a qualification above A-Level equivalent.  We need to attract more bright graduates into the early years profession, particularly into these deprived areas which are most in need of high quality provision.  We should ensure that professionalization can be reflected in pay rates by prioritising early years education spend.

Despite citing quality as the most important factor in choosing a provider  cost was more important for low-income families. This increases the pressure on some nurseries to provide the cheapest childcare in order to attract parents.  If we want consumer choice to drive improvements, we have to ensure that all consumers, particularly those on low incomes, are genuinely able to make informed decisions based on quality and not cost.  Publishing Local Authority childcare provider quality ratings will allow parents to compare providers in their area alongside Ofsted ratings in order to make a more informed decision and better hold Local Authorities to account. 

Entitlement to free early years education is taken up less by the most disadvantaged families.  Equally, we estimate that 52,000 recipients who already apply for Working Tax Credit (WTC) and are fully eligible for the childcare element do not in fact claim it.  Furthermore, the HMRC have estimated that £265m was claimed erroneously in 2010/11, the majority in error, totalling 16.5 per cent of the total budget.  Simplification of the system for claiming childcare support by introducing online childcare accounts, which the childcare element of WTC, employer vouchers, and any money parents, friends or relatives wanted to set aside for childcare, could be paid into.  As a parent, you would not have to make complicated calculations about whether you are better off with vouchers or tax credits as the applications would be managed through one system and you could instantly access the most financially sensible choice.   

The coalition has an opportunity to address these issues in its response to the Nutbrown Review next week. Let’s hope the quality of childcare is at the top of its agenda.

David Cameron is pictured during a visit to a London Early Years Foundation nursery. Photograph: Getty Images.

Lucy Lee is head of education at Policy Exchange

Photo: Getty
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Could Labour implement universal basic income?

The battle over this radical policy is moving gradually into the mainstream.

Shadow chancellor John McDonnell has called universal basic income (UBI) “an idea whose time may well have come”. It means a fixed regular payment to each citizen, irrespective of income or behaviour. It is seen by both socialists and Silicon Valley as a panacea for the post-industrial world, addressing unrestrained inequality, economic insecurity, and automation-generated unemployment in the modern economy.

Guy Standing, a professor at Soas and founding member of Basic Income Earth Network (BIEN), says a “perfect storm of factors have suddenly pushed us into being a mainstream policy question” in recent years. “A lot of people who were sitting on their hands, as it were, have started to come out in favour ... I'm inundated with requests to speak and involvement in conferences, and it's indicative of the sudden realisation that if the growing inequality and growing economic insecurities persist, then the drift to fascist populism will continue. 

“Of course, in the background, a lot of these techies including prominent names in Silicon Valley have come out in favour because they see robots displacing us all. I don't buy that argument, but it's added to a growing chorus of people saying that we should take it more seriously.”

Standing's recent book charts the long history of thinking about UBI (through ancient Greece, Thomas More, and Martin Luther King). But the idea's rise to prominence is the result of a interlinked developments in the economy and the nature of work. As Labour MP Jonathan Reynolds argues, changes such as the rise of self-employment and the gig economy challenge the appropriateness of the traditional welfare state. It's “based around the principle of compulsion, and broadly believing there's two binary states – people in work, and people out of work. We know it's becoming a much more complicated picture than that... The state can't keep up with the complexity of people's lives.”

For Standing, the prospects of UBI being implemented successfully depend largely on how it is framed. He is wary of libertarians who see it as an opportunity to dismantle the welfare state, and believes it needs to be placed within the context of chronic economic insecurity for a growing number within the post-industrial economy.

“The argument that I think is going to prove really important for the left is linked to the growth of the 'precariat',” he says, meaning those living without predictability or security. “People in the precariat are experiencing chronic insecurity that will not be overcome by any existing policy.” 

Even so, support from business could be key. Peter Swenson's work on the history of the welfare state finds that reforms and expansions of social policy have only succeeded when key sections of the capitalist class are in support. He, and other academics, resist the idea that the welfare state is simply the focal point for the battle between left and right over Robin-Hood style redistribution. If UBI is to make its way into policy, support from business may be more important than the strengthening of the left.

Reynolds claims UBI may solve not just policy problems, but political ones.  "You have to say that Labour's situation, in terms of how we've struggled on all of these issues (the party's polling is significantly behind on running the welfare state) over the last few years, means that we should definitely be open to new thinking in this area.” Both he and Standing  are part of the working group that was brought together by McDonnell in February to produce a publication on the issue before the next general election, which would then be discussed across the country. Understandably, the group didn't quite meet its deadline. But Standing says “the general thrust of the plans hasn't changed”.

Standing is hopeful that important sections of the Labour Party are either in support, or can be won over. Clearly, the leadership is generally supportive of the idea – both McDonnell and Corbyn have expressed as much in public statements. Standing says many MPs are “rethinking their position ... many of them have not taken up a position because they thought that this was not an issue to be considered. I think we're seeing a real opening for a much more constructive discussion.”

Reynolds says that “there's people on the right and the left of the party who are in favour, there's people on the right and the left who are against”.
 
Nevertheless, discussion is winning over important Labour constituencies. It's not just radical activist groups, but also trade unions, who are coming round to the idea. According to Standing: “Unite now supports it, as well as a lot of unions in Europe. It used to be the case that the unions were among the most fierce critics of a basic income, on the spurious grounds (in my view) that if people had a basic income they wouldn't push for higher wages and employers wouldn't give higher wages.

“We found in our pilots and in our psychological research that people who have basic security have a stronger bargaining position and are therefore more likely to stand up for their rights, and can lead to improvement in wages and working conditions. So I think that all of those objections are gradually being exposed by theoretical arguments against them, or empirical evidence, from pilots.”

Reynolds agrees that “there's a lot of support coming from the wider labour movement”, but warns that people must not be too optimistic about anything happening quickly. “Clearly it's going to need a radical change to how the tax and benefits system would work, and you'd obviously be completely recasting how personal allowances work, and all of that,” he says. “I think this is sort of the cutting edge of thinking about the future and what our economy will look like in 50-100 years' time, that is the frame that we're looking at.” 

Rudy Schulkind is a Danson scholar who recently graduated in philosophy and politics from St Anne's College Oxford.