Progress | Centre-left Labour politics

Back to the future on childcare

Returning childcare provision to market principles would be a retrograde step, writes chief executive of the Child Poverty Action Group Alison Garnham

This week, the Institute of Economic Affairs has argued that the solution to our childcare problems in the United Kingdom is to scrap free early years childcare, tax-free childcare, staff-child ratios and qualification requirements for childcare professionals.

Childcare provision is not yet perfect, but scrapping free childcare would rewind the clock to the 1990s when, in the absence of well-regulated, free, high-quality childcare, it was much harder for lone parents and mothers on low incomes to enter paid work. At the time, they were demonised as lazy, but in reality only those with money for childcare had a choice.

Before the first national childcare strategy was announced in 1998, childcare provision was a textbook case of free market failure: there was very little provision and what existed was often stigmatised (because you would only get a free place if your kids were deemed to be at risk); patchy, with poorly funded community or voluntary sector provision or, out of reach, as the private sector was expensive with both some of the highest but also most of the worst quality provision. The urgency of the rallying call from Daycare Trust and others for more available, affordable and high quality childcare, was very real.

A few, brave local authorities who had set out to be beacons of gender equality had broken the mould with pioneering children or family centres and had funded expanded maintained-sector childcare provision, but these were the exception. Practically everywhere else was a childcare desert with places few and far between. And because our childcare strategy started so late compared to highly developed provision elsewhere in Europe (where the best have universal childcare, free for low-income and capped at five or 10 per cent of income for everyone else); we have had a mountain to climb from the poor, stigmatised services we once had to the high-quality and affordable ones that are now aimed for across the party divide. We have yet to completely deliver on affordability and quality, although more progress has been made on availability.

The introduction of the free entitlement was really the first step towards a truly universal system of childcare, prioritising child development and enabling many to try formal childcare, often for the first time. As well as reducing costs for families, it was also based on good evidence from the ground-breaking EPPE study which showed that child outcomes were much improved if children received early childhood education and care, with effects the most longlasting for the most disadvantaged children – but only if the quality was high. The study provided the ammunition needed to develop the free entitlement, first for 12.5 hours a week, then provided more flexibly, for 15 and now being rolled out for 30 hours a week.

Crucial to the achievement of high quality, was the early years foundation stage, qualifications for early years professionals and graduate leader fund, all following the long established research evidence that high quality is known to be associated with graduate-led settings. Widely welcomed by providers, these provided the guidance on child development requirements and professional guidance to ensure quality standards. We still have a long way to go to deliver high quality everywhere because inadequate subsidy still makes it impossible to provide the necessary pay and career structure needed for quality settings everywhere. The most disadvantaged areas have been the slowest to improve and least sustainable due to the lack of cross-subsidy from better-off parents. The beacons of high quality remain the maintained sector and Sure Start.

Still the biggest gap, is childcare for older children through extended schools. Originally intended in the national childcare strategy, and the later strategy in 2004, to provide childcare and enrichment activities both before and after school and in the school holidays; progress has stalled due to budget cuts and lack of government focus on delivering it. Together with the Family and Childcare Trust, we are pushing for the government to return its attention to this ‘Unfinished Business’.

In gently reminding us of where we have come from on childcare, it is worth pointing out that the first national childcare strategy was also part of a comprehensive assault on child poverty across all government departments, including the development of Sure Start. Before tax credits, for low-income families, there had been a small and ineffective earnings disregard to help with childcare costs in family credit (the low-wage subsidy that predated tax credits and now universal credit), but few were entitled and it took the working families tax credit and then working tax credit to provide real money for childcare for low-income families for the first time. Together with employment support through the new deals, lone-parent employment rates soared from 45 per cent in 1997 to 57 per cent by 2008. The rate is now 64 per cent. Child poverty fell by 1.1 million over the same period. Government action worked.

The current entitlement to 30 hours of free childcare for three and four year olds is another step forward. Yes, funding could be improved, childcare gaps should be closed and out of hours provision in schools must become the norm. But the idea of turning the clock back to an underfunded free market that bypassed the needs of so many ordinary families, should be discounted. Tax-free childcare is perhaps the only area today where money is poorly targeted going as it does to families earning up to £200k between them. Costing close to £1 billion, this money could be better spent on subsidy for the free entitlement, extended schools and for low-income families.

For all its challenges, the idea that returning childcare provision to market principles would be progress, could not be further from the truth. Back to the future? If ever there was an example of total market failure, childcare was it – do not go there.


Alison Garnham is chief executive of Child Poverty Action Group. She tweets @alisongcpag

Read the Institute of Economic Affairs report Getting the State out of Pre-School & Childcare this piece is responding to here



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Alison Garnham

is chief executive of the Child Poverty Action Group

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