The Chancellor Jeremy Hunt today (15 March) used the final part of the Budget to address the long-running issues around Britain’s childcare system, which negatively impacts women’s ability to work and the wider economy.
Hunt announced a series of measures on both the accessibility and supply side of childcare which he believes will “transform the lives of thousands of women and build a childcare system comparable to the [world’s] best”.
On the accessibility side, Hunt announced that the 30 hours of free childcare currently available to working parents for children aged between three and five will be extended to all children, from nine months old up to five years. The provisions will only apply to term time – as it currently functions – which equates to 38 weeks of the year. Another pledge surrounding accessibility is Hunt’s push for all schools to provide “a full wraparound offer” of pre- and after-school childcare, either on their own or in partnership with other schools.
These pledges will have a staggered introduction. The extension of free childcare will begin gradually, from April 2024, when working parents of two-year-olds will be able to access 15 hours of childcare; later that year, in September, those 15 hours will be opened to all children from nine months up to four years old, with the full 30 hours eventually being open to all eligible parents of under-fives from September 2025. Meanwhile, Hunt set a September 2026 deadline for schools to offer wraparound services.
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But these measures have caused concern in the childcare sector, which is struggling with a workforce shortage and financial pressures that are forcing businesses to shutter. “It’s disappointing, to be honest,” said June O’Sullivan, the CEO of the London Early Years Foundation, which runs 40 social enterprise nurseries across the capital. She told Spotlight that Hunt’s measures are “half thought-out”. If, for example, schools are to offer complete wraparound care for all of its youngest students before and after school as part of the 30 hours of free care, then the private care “market doesn’t become a market anymore and instantly becomes [insignificant compared] to schools”.
On the funding side, Hunt announced a £204m increase to nurseries that provide 30 free hours of care from this September, rising to £288m next year. It marks a 30 per cent increase on the current rate for two-year-olds, which is “just as the sector has requested”, Hunt said. Sectoral leaders dispute this, however. Its current shortfall for children aged two to four is estimated to be around £1.8bn, according to Neil Leitch, the CEO of the Early Years Alliance. This means that today’s funding announcement “is highly unlikely to match what’s needed to put providers on a steady footing”, said Leitch. It “raises serious questions about the government’s entire approach to costing this policy”, he added.
It is unclear whether Hunt’s plans will be enough to bolster the sector’s workforce issues. A pilot scheme will offer incentive payments of £600 to new childminders entering the profession, rising to £1,200 if they join through an agency. But there was “no reference or plans for the fact that staff [retention] is the major problem”, said O’Sullivan, who called for more incentives to retain staff already in the profession that are leaving for better-paid roles in retail and hospitality. Staffing ratios are also to be relaxed, but will be optional to operators, Hunt confirmed, but it’s a move that Leitch labelled “utterly appalling”.
A report published this month from the Centre for Progressive Policy revealed that the UK is losing a minimum of £27bn per year – equivalent to 1 per cent of GDP – because a lack of suitable childcare is preventing mothers from working the hours they would like. Hunt’s Budget is designed to address that. Will it work?
Ambiguities in the plans’ funding, from what sectoral experts say is needed to make care affordable, casts a shadow of doubt over their success. “We know from bitter experience that expansions of so-called free childcare without adequate investment are a recipe for utter disaster,” said Leitch. “From what has been announced so far, we are far from convinced.” The childcare industry has done all the necessary calculations, said O’Sullivan: “We’ve done all the figures for Hunt. He just has to put the money behind it.”
“If he’s serious about women going back to work,” she added, “and he’s serious about making sure children have good experiences, then he needs to fund it.”
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