Drive to reduce the cost of childcare for parents

On 4 July 2022, a range of ministers from different departments launched a well-intentioned drive to support parents by reducing the direct costs of securing childcare. Some of the ministers did not retain their posts by the end of what was a turbulent week in UK politics. Those distractions aside, we must consider these proposals in the round. I agree that the burden of the costs of childcare for working and disadvantaged families is hugely significant, and one that government can do much to help with by unblocking the obvious barriers. The onus has also fallen upon the sector with all sorts of costs associated with the pandemic, inflation, energy, pensions, and annual national minimum wage rises to name a few.

The Government’s drive contained five main proposals, under the principle of achieving support without extending budget spending, one of which might just work – a bit.

Changes to the regulatory framework by increasing adult to child ratios (1:5 for two-year-olds, from 1:4) are proposed. The intention at best is to give settings flexibility in the construction and delivery of their business offer. But it is a risk and compromise to their quality and safety, regardless of how able a setting is able to protect these pillars of practice. The idea is it could reduce the cost charged to parents by 15%. It won’t. First of all, the consultation response, I predict will be massively in favour of protecting current ratios. Second, the vast majority of settings won’t easily or readily take the opportunity to deploy the flexibility on offer. Thirdly, that 15% reduction in costs, if it is indeed realised, will be retained by settings and not passed on to parents. Why? Because of their rising costs of delivery and the need to support the sustainability of their businesses. It is also needed to resource a workforce where supply is lower than demand. Settings will continue to need to up their terms and conditions to attract, retain and develop their workforce at this critical moment, and keep up to speed with the velocity of increases in all delivery costs, alongside what can be described as a stagnant early years funding rate. Likely chance of reducing costs for families: 2./10 (it may help settings at a push).
Childminders are an incredibly valuable component of the sector. We need them. I have always said that. It has been at best regrettable to watch how their numbers have dwindled as fast as the need for flexible, affordable and available childcare has risen. The proposals are many, including: the reduction of upfront costs to become a childminder, with financial support (grants I hope, like we used to have); flexibility on where they can operate in community buildings (building on some flexibility that already exists); rethinking approaches to ratios when including their own children and siblings of other children (a risk of blurring of important professional boundaries here I think); reducing the Ofsted inspection of childminders (which is already a reduced service); and slimming down the EYFS by one-third for them (a step in the wrong direction when we need sector unity and parity). Will these achieve the aim of reducing costs? I am not convinced for the same reasons above. I predict the impact will be more on the sector’s morale, motivation and status – already too low. I think many established and experienced childminders will leave the profession completely, or move to find work in group care settings and schools, all perhaps able to offer better terms and conditions. Some may be picked up by childminder agencies (CMAs), which have the slow to gain momentum. The goal is to do more with CMAs. There are exciting pioneers out there and I really do wish their ambitions take flight. However, the impact upon quality and perceptions of quality being slimmed down in childminding will be felt by parents who prioritise quality over and above all else, and this will in turn reduce demand, which inevitably will reduce supply. It will be a vicious circle that even the best agencies may struggle to counter. Likely chance of reducing costs for families: 3.5/10 (but it will take too much time).
The next proposal appears to make it easier for more providers to register with Ofsted, with the aim of increasing the amount of supply registered and eligible to receive additional financial support via Universal Credit and Tax-Free Childcare. It is clear there are many providers out there who need to be motivated to register and unlock the potential for families to access often under-claimed additional financial support. The registration process is not too onerous, it is about meeting the national minimum standards, and this is good for quality, safeguarding and for bringing a sector together under common goals and objectives. Providers though will need to be motivated to make these changes in other ways through other incentives. It will need to make business sense for them. Likely chance of reducing costs for families: 6/10 (where it opens up supply in areas where it is insufficient).
£10m for maintained nurseries (MNS) will be welcomed by many, but not all. There is always a place for excellence, and we must be able to afford it. But continuing funding MNS at a higher rate does not fundamentally address the role of them here and now, and their place in the childcare market alongside PVI provision. We all need to agree their aim and purpose and what we all need and want from them. Instead, the issue could again be kicked into the long-grass for the foreseeable future without answering these very important questions. They are not widely considered to be the most flexible of childcare providers for working families, rather better for quality interventions for relatively small numbers of disadvantaged families instead. With any generalisation, there will be exceptions. Forgive me. But these proposals do not include enough change or reform for a modern MNS service as far as I can see. Likely chance of reducing costs for families: 2/10 (this is more about maintaining the status quo).
A renewed campaign for driving up take-up of Tax-Free Childcare is the proposal with the most potential. But the campaign must reach the parts previous national campaigns haven’t reached. There needs to be a strong balance of new and differently presented, clear and accessible information, awareness raising, myth-busting, and support, interventions and motivations for providers and parents alike to take another look at this scheme. More radical reform of Tax-Free Childcare isn’t on the cards here, but anything to reduce the labyrinth of process it contains would be very welcome indeed. Likely chance of reducing costs for families: 6/10 (I know it will help some more families, but it could be far more wide reaching).

What could the alternatives be I wonder? That is another blog. Or indeed, see previous blogs.