The coalition's childcare figures don't add up

Without greater long-term investment, the relaxation of ratios is extremely unlikely to lead to the savings promised by ministers.

When the coalition announced its intended relaxation of childcare ratios, one of the central planks of their argument was that it would lead to lower prices for parents. With childcare cost inflation currently running at over twice the rate of inflation, reducing prices is an understandable goal of policy. But many academics and those in the childcare sector were understandably dubious over this claim. Yes, relaxing the number of children each childcare worker can care for may reduce the ‘per-child’ cost to the provider, but it is not at all clear that the gain from this increase in productivity will necessarily flow into lower prices for parents. Perhaps more importantly, it is not clear whether quality of care would improve either. This is concerning given that quality increases were a stated aim of the policy

Last Friday, the Department for Education responded to a freedom of information request, which asked them to show how they came to this conclusion. The DfE’s modelling claims that the increase in ratios could lead to a remarkably large reduction in prices from 12 and up to 28 per cent. Let’s explore some of the assumptions behind this figure:

  • It assumes that childcare providers will actually make use of the larger ratios available to them: It is far from clear that childcare providers even want to increase ratios. Original survey evidence carried out by IPPR found that almost three quarters (74 per cent) of childminders won’t increase the number of children they care for following an increase in ratios. Almost four fifths of this group thinks the increase in ratios will reduce the quality of their services. A similar survey by the National Children’s Bureau, covering the whole of the sector, found that 95 per cent of respondents were concerned about increasing ratios.  If so many providers are not willing to take up the coalition’s offer, the DfE’s modelling is largely redundant.
  • The DfE’s upper estimate of 28 per cent assumes no increase in the pay of most existing workers: In order to make use of the increased ratios for children aged over three, the example nursery used in the DfE’s modelling needs to replace two of its non-graduate staff with two early years graduates. Having paid for their increased salary, the entirety of the extra revenue is given to parents in lower prices. What this means is that the wages of everyone else working in the setting don’t budge, with those looking after children aged two and under asked to care for more children but with no extra pay.
  • The DfE assumes high ratios for younger children but with no increase in the qualifications of their carers: Forthcoming IPPR research shows that while relaxing ratios for over threes may be a sensible idea, higher ratios are problematic for younger children, who require much more intensive care. While one way to mitigate the impact of higher ratios on young children would be to increase the skills of their carers, the modelling assumes that the extra graduates employed focus all of their caring time on over-threes, in order to unlock the higher ratio for that group. So while the higher ratios may lead to lower prices, parents of under threes should understandably be concerned about the resulting impact on quality.
  • The DfE fails to point out that some of the savings may be retained by nurseries to boost profits rather than passed on to parents: Neither the 28 per cent nor the 12 per cent figure imply any channelling of extra revenue into the profits of providers. This is very unlikely to happen because the sector is so unprofitable. Last year over a quarter of British nurseries made a loss. The idea that nurseries will not use new flexibilities to boost their often meagre profits looks a heroic assumption, and has worrying implications for the future stability of the childcare market.

Industry website Nursery World has pointed out several other flaws in the methodology, including the assumptions that there are no empty places in settings, when in fact 20 per cent of places are vacant, and that workers need time to plan and manage delivery.

The coalition clearly thinks that relaxing ratios, combined with tweaking the package of benefits offered to parents to buy childcare, is going to solve the childcare affordability problem affecting families across the countries. But neither are a quick fix. Without more long-term investment in the skills and capacity of the sector to increase places and quality, and reduce prices, the 28 per cent figure announced last week is extremely unlikely to be achieved.

Spencer Thompson is Research Fellow at IPPR

David Cameron during a visit to a London Early Years Foundation nursery on January 11, 2010 in London. Photograph: Getty Images.

Spencer Thompson is economic analyst at IPPR

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Let's face it: supporting Spurs is basically a form of charity

Now, for my biggest donation yet . . .

I gazed in awe at the new stadium, the future home of Spurs, wondering where my treasures will go. It is going to be one of the architectural wonders of the modern world (football stadia division), yet at the same time it seems ancient, archaic, a Roman ruin, very much like an amphitheatre I once saw in Croatia. It’s at the stage in a new construction when you can see all the bones and none of the flesh, with huge tiers soaring up into the sky. You can’t tell if it’s going or coming, a past perfect ruin or a perfect future model.

It has been so annoying at White Hart Lane this past year or so, having to walk round walkways and under awnings and dodge fences and hoardings, losing all sense of direction. Millions of pounds were being poured into what appeared to be a hole in the ground. The new stadium will replace part of one end of the present one, which was built in 1898. It has been hard not to be unaware of what’s going on, continually asking ourselves, as we take our seats: did the earth move for you?

Now, at long last, you can see what will be there, when it emerges from the scaffolding in another year. Awesome, of course. And, har, har, it will hold more people than Arsenal’s new home by 1,000 (61,000, as opposed to the puny Emirates, with only 60,000). At each home game, I am thinking about the future, wondering how my treasures will fare: will they be happy there?

No, I don’t mean Harry Kane, Danny Rose and Kyle Walker – local as well as national treasures. Not many Prem teams these days can boast quite as many English persons in their ranks. I mean my treasures, stuff wot I have been collecting these past 50 years.

About ten years ago, I went to a shareholders’ meeting at White Hart Lane when the embryonic plans for the new stadium were being announced. I stood up when questions were called for and asked the chairman, Daniel Levy, about having a museum in the new stadium. I told him that Man United had made £1m the previous year from their museum. Surely Spurs should make room for one in the brave new mega-stadium – to show off our long and proud history, delight the fans and all those interested in football history and make a few bob.

He mumbled something – fluent enough, as he did go to Cambridge – but gave nothing away, like the PM caught at Prime Minister’s Questions with an unexpected question.

But now it is going to happen. The people who are designing the museum are coming from Manchester to look at my treasures. They asked for a list but I said, “No chance.” I must have 2,000 items of Spurs memorabilia. I could be dead by the time I finish listing them. They’ll have to see them, in the flesh, and then they’ll be free to take away whatever they might consider worth having in the new museum.

I’m awfully kind that way, partly because I have always looked on supporting Spurs as a form of charity. You don’t expect any reward. Nor could you expect a great deal of pleasure, these past few decades, and certainly not the other day at Liverpool when they were shite. But you do want to help them, poor things.

I have been downsizing since my wife died, and since we sold our Loweswater house, and I’m now clearing out some of my treasures. I’ve donated a very rare Wordsworth book to Dove Cottage, five letters from Beatrix Potter to the Armitt Library in Ambleside, and handwritten Beatles lyrics to the British Library. If Beckham and I don’t get a knighthood in the next honours list, I will be spitting.

My Spurs stuff includes programmes going back to 1910, plus recent stuff like the Opus book, that monster publication, about the size of a black cab. Limited editions cost £8,000 a copy in 2007. I got mine free, as I did the introduction and loaned them photographs. I will be glad to get rid of it. It’s blocking the light in my room.

Perhaps, depending on what they want, and they might take nothing, I will ask for a small pourboire in return. Two free tickets in the new stadium. For life. Or longer . . . 

Hunter Davies is a journalist, broadcaster and profilic author perhaps best known for writing about the Beatles. He is an ardent Tottenham fan and writes a regular column on football for the New Statesman.

This article first appeared in the 16 February 2017 issue of the New Statesman, The New Times