The coalition still isn't rising to the challenge on affordable childcare

The changes announced today by Liz Truss are unlikely to significantly reduce costs, boost quality or widen access to early years provision.

You might have missed it, but today Liz Truss published the latest instalment in the government’s early years reform plans. More Affordable Childcare is the culmination of the government’s commission on childcare. The looming summer holidays might be a delight for kids, but many working parents will be put under huge pressure by the childcare costs that go with it. The need to bring down the price is urgent.

This year, for the first time, the average cost of holiday childcare per child per week has now topped the hundred pound mark. Childcare inflation marches on, far above salary increases, squeezing family budgets. With the average couple spending over a quarter of their net income on care, England is one of the most expensive countries for parents needing childcare.

The government hasn't gone far enough to meet the challenge. Today’s publication, following a year long commission on the early years, doesn’t really provide any new approaches to reform. Most of the changes announced are unlikely to substantially reduce costs, boost quality or widen access to early years provision.

The best news from today’s publication is extending the free entitlement for 2 year olds from the most deprived 20 to 40 per cent. This is good news, but old news – restating what was already pledged by the government. Nevertheless, this is an important step forwards, and should have a positive impact for families. Another good measure is increasing funding for out-of-hours care in schools clubs. But this, in essence, is bringing back a weakened version of Labour’s Extended Schools funding, which was previously scrapped by the coalition.

The other announcements tinker at the margins. Cutting red tape is unlikely to lead to parents seeing real savings in their childcare bills. And new IPPR research shows that introducing childminder agencies could lead to costs actually increasing for parents (as well as potentially undermining quality).

Another bad move is leaving Ofsted as the sole arbiter of quality, and giving settings the automatic right to deliver the free entitlement if they receive a 'good' or 'outstanding' score. The Daycare Trust recently crunched the numbers and demonstrated that Ofsted isn’t always a reliable judge of quality. Particularly in the case of the under-3s, Ofsted scores failed to reflect which settings were best for children’s development. While high quality childcare is good for children, low quality can actually be detrimental.

There needs to be some new, bold thinking. There’s agreement that getting high quality early years care is important and yields dividends for children, parents and society. But both More Great Childcare and More Affordable Childcare fail to rise to the scale of the challenge.

On cost, the government should look seriously at supply-side funding. There are warnings from other countries, that investing in demand-side funding can lead to spiralling inflation and a system that costs more for everyone.

On quality, the government needs to go further. Our polling, and public responses to reform proposals, show there’s real appetite in the sector for driving up quality and status. We believe there should be a minimum requirement of having or working towards a relevant level 3 qualifications for all professionals delivering the Early Years Foundation Stage. The government should also bring back the successful Graduate Leader Fund to keep driving highly qualified staff. More graduates means more centres are able to look after more three and four year olds at any one time. This could cut costs for parents, without being detrimental to children’s development.

David Cameron and Nick Clegg sit together as they visit the Wandsworth Day Nursery in London on March 19, 2013. Photograph: Getty Images.
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The 5 things the Tories aren't telling you about their manifesto

Turns out the NHS is something you really have to pay for after all. 

When Theresa May launched the Conservative 2017 manifesto, she borrowed the most popular policies from across the political spectrum. Some anti-immigrant rhetoric? Some strong action on rip-off energy firms? The message is clear - you can have it all if you vote Tory.

But can you? The respected thinktank the Institute for Fiscal Studies has now been through the manifesto with a fine tooth comb, and it turns out there are some things the Tory manifesto just doesn't mention...

1. How budgeting works

They say: "a balanced budget by the middle of the next decade"

What they don't say: The Conservatives don't talk very much about new taxes or spending commitments in the manifesto. But the IFS argues that balancing the budget "would likely require more spending cuts or tax rises even beyond the end of the next parliament."

2. How this isn't the end of austerity

They say: "We will always be guided by what matters to the ordinary, working families of this nation."

What they don't say: The manifesto does not backtrack on existing planned cuts to working-age welfare benefits. According to the IFS, these cuts will "reduce the incomes of the lowest income working age households significantly – and by more than the cuts seen since 2010".

3. Why some policies don't make a difference

They say: "The Triple Lock has worked: it is now time to set pensions on an even course."

What they don't say: The argument behind scrapping the "triple lock" on pensions is that it provides an unneccessarily generous subsidy to pensioners (including superbly wealthy ones) at the expense of the taxpayer.

However, the IFS found that the Conservatives' proposed solution - a "double lock" which rises with earnings or inflation - will cost the taxpayer just as much over the coming Parliament. After all, Brexit has caused a drop in the value of sterling, which is now causing price inflation...

4. That healthcare can't be done cheap

They say: "The next Conservative government will give the NHS the resources it needs."

What they don't say: The £8bn more promised for the NHS over the next five years is a continuation of underinvestment in the NHS. The IFS says: "Conservative plans for NHS spending look very tight indeed and may well be undeliverable."

5. Cutting immigration costs us

They say: "We will therefore establish an immigration policy that allows us to reduce and control the number of people who come to Britain from the European Union, while still allowing us to attract the skilled workers our economy needs." 

What they don't say: The Office for Budget Responsibility has already calculated that lower immigration as a result of the Brexit vote could reduce tax revenues by £6bn a year in four years' time. The IFS calculates that getting net immigration down to the tens of thousands, as the Tories pledge, could double that loss.

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines. 

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