Our response to the Childcare portion of the latest UK budget, March 2023.

Last week UK Chancellor of the Exchequer, Jeremy Hunt, announced a large-scale expansion of “free” childcare. We’ve been mulling it over and discussing the plans. It initially sounds positive and even simple. At first sight of the headlines, many of us celebrated finally being heard and how this topic has risen up the agenda at last. The current funding system is not fit for purpose and a generation of parents are being locked-out of careers and community. We know beyond any doubt, that maternal employment is positively-impacted by funded childcare.

But sadly the childcare system is not simple. It’s what System Thinkers call messy. People, policy, business, politics and societal expectations are deeply interconnected. Making a small tweak in one part of the system can have negative consequences in another if adequate analysis isn’t done.

Join us in responding to the announcements and keep fighting for fairness with the links below.

To summarise:

Change in ratios to 1 adult for every 5 two-year olds is disappointing; almost the entire sector has rejected the idea and many won’t be implementing it on grounds of child safety and staff wellbeing. It’s likely nurseries implementing it will see staff losses, given that good Early Years (EY) staff are in such high demand.

The plans crucially still don’t feature either workforce plans detailing support for settings to actually recruit and retain educators to the 38k new workers needed to cope with funded entitlements (Women’s Budget Group data), or monitoring to ensure quality of the new kind of provision. As Neil Leitch, CEO of the Early Years Alliance, says, “The early years don’t only deliver child ‘care’”! This news comes at at time when the latest research shows compelling evidence that adverse experiences in the first few years of life affect physical and mental health for a lifetime and cost society billions (especially in depression and cardiovascular-related illness).

Funding proposals and the timeline for these are the major concern. The most generous reading of the reason changes are being introduced gradually between now and 2025 is that they would topple the current system otherwise. Funded hours are loss-making, so increasing them will mean nurseries incur larger losses. When losses get too big, nurseries and childminders close. The uplift being suggested won’t solve this. And even if we ignore this, the current workforce is in shambles. There aren’t the trained workers to look after all these kids and waiting lists are huge, especially in the “childcare deserts” around the country. There are reports galore already of EY workers turning to nannying and retail for a better wage. Or leaving the sector entirely, like the 5,400 who did in 2022.

The least generous reading of the timeline is that the Tories have little faith in winning the next election and won’t have to see any of this through! Talking about ‘tax-free’ childcare must be contextualised with the data that £500/quarter is a small amount towards approx. £15k per year costs, and why has this not increased in six years? Why isn’t it available for those studying? Why aren’t eligibility criteria updated? Let’s not even start on school holidays 🙈 Oh and the wider cost of living crisis.

And finally, the childminding changes’ impact on the system is relatively minor. The new ‘golden handshake’ sum for childminders feels hopelessly tokenistic, as anyone caring for children in their homes know (including us), it’s hardly the upfront costs which cause the biggest issue. Again it comes back to retention and delivering consistent quality for the early years beneficiaries (our kids, who deserve a little mention in all this… right?)

Our take:

The narrative is focused on getting parents back into work and not wellbeing and what we know is best for children; it’s the economy, stupid. For working parents who are a key, but just one part of this system, the news is indeed positive. But the impact on other parts of the system is as questionable as just how any of it will be implemented.

We’re worried about how the sector will hold up. Hardly anywhere does the ‘free’ funding actually cover costs, it’s why providers charge more for extras, supplement with high fees for younger children or ask for a voluntary contribution. It’s a broken system that encourages corner cutting, something the uplift won’t come close to helping with. The £140m proposed to bridge the current funding gap sounds impressive perhaps, but it falls very short of the £1.8bn figure agreed on by providers and economists.

Business stimulation elsewhere in the budget also works in the favour of private equity-backed chains whose hold and power is growing in the nursery sector, in turn leading to further fragility. We’ve previously reported the chaos in Australia when ABC Learning went under, leaving thousands of parents without childcare and resulting in an unprecedented Government bail out. Forecasters like Redwoods Dowling & Kerr predict "we are at the lower end of the growth curve and that we will still witness more consolidation in the market." Sigh.

In terms of more positive suggestions, we’ll be keeping an eye out for proactive solutions such as potentially extending maternity leave, with part-time working allowances, which could free-up childcare spaces and alleviate the great pressure to return to work. Locating childcare settings within communities like assisted-living or low-income housing is something being pioneered in the US by the Bezos academies so perhaps there are emerging models that will be positive sum.

Taking meaningful action together:

Heartfelt thanks to the follow who have campaigned tirelessly for better support for working parents namely @pregnantthenscrewed and her whole team who you can donate and sign up to https://cafdonate.cafonline.org/21180#!/DonationDetails and you can donate by texting SCREWED followed by your donation amount to 70085 ****or follow quick actions at https://pregnantthenscrewed.com/take-action/ and of course follow flexible working champion, https://www.instagram.com/mother_pukka/

Resources and training galore for settings as well as parents available at https://www.eyalliance.org.uk/

Please write to your local MP to express your views (and exercise your civic duties… The reason protesting is being increasingly legislated around is it WORKS to effect change so get loud!) https://members.parliament.uk/members/commons

Others to follow https://www.instagram.com/stellacreasy/

Final reminder: “The true measure of any society can be found in how it treats its most vulnerable members” - ****Mahatma Gandhi.