How Britain’s Childcare Crisis Became The First Big General Election Battle8 min read
Britain is in the the middle of a childcare crisis. The Labour Party had identified it as a major dividing line between them and the Tories at the next election.
Shadow education secretary Bridget Phillipson had promised to overhaul the childcare system and even made her pitch at a centre-right think tank.
Parking her tanks firmly on the Tory’s lawn, she had described Labour as the “party of the family”.
It was the perfect issue for Labour, with a childcare system on its knees, soaring fees, staff retention issues and nursery closures.
But when Jeremy Hunt unveiled his first budget on Wednesday, it appeared that the Tories had suddenly leapfrogged them on the issue.
The chancellor announced that working parents of children under the age of five in England will be entitled to 30 hours of free childcare a week.
Under the current system, parents of three and four-year-olds are eligible for 15 hours of free childcare per week, and working parents are eligible for 30 hours.
What Is Jeremy Hunt’s Childcare Plan?
30 hours of free childcare for working parents with children aged from nine months to five will be introduced in stages:
- From April 2024: Working parents of two-year-olds will receive 15 hours of free childcare per week.
- From September 2024: Children between nine months and two years old will be entitled to 15 hours of free childcare.
- September 2025: All eligible under-5s will get 30 hours of free childcare.
The government will provide £4.1 billion by 2027-28 to expand the 30 hours a week of free childcare for working parents of younger children in England.
Ministers will also provide £204 million in 2023-24, increasing to £288 million in 2024-25, to raise the hourly funding rate paid to childcare providers in England to deliver the existing free hours offer.
The government will pilot incentive payments of £600 for childminders joining the profession, and £1,200 if they join through an agency.
They will also provide £289 million for schools to increase the supply of wraparound care so parents can drop their children off between 8am and 6pm. They want all schools to start to offer wraparound by September 2026.
The government will change minimum staff-to-child ratios in nurseries England from 1:4 to 1:5 for two-year-olds in England, but the change will “remain optional”.
Childcare support will also be paid to parents on Universal Credit upfront – rather than in arrears. The maximum parents in this position can claim will increase to £951 for one child and £1,630 for two children.
Phillipson said it showed the government had “finally listened” to Labour’s calls for investment and reform in childcare.
The plan was welcomed by Tory MPs, campaign groups and think tanks who described it as a “game changer” that will enable women to return to work earlier.
A snap Savanta poll found half of those surveyed broadly supported Hunt’s first budget with 69% backing the childcare extension.
However, as experts have pointed out, the announcements are not quite what they seem. While the Tories may have won this battle, they have not yet won the war.
“The Tories think they’ve shot our fox, but this thing is going to unravel quickly when it collides with reality,” said one Labour source. “It’s not coming in any time soon and it’s not actually that generous.”
They said that while the Tories had stolen their frame of discussion, it showed Labour is leading on the issue. “I think they are a bit rattled,” the source added.
Holes In The Plan
Major questions have been raised over the funding of the chancellor’s plan, the lack of staff and supply of places.
Hunt’s plan is also centred on his bid to get more people back into work which has sparked concerns that quality of childcare could be sacrificed.
Providers are concerned that nurseries and childminders could struggle to deliver additional places if the funding does not cover increasing costs.
Some are already struggling financially, with nurseries forced to close in recent years.
The Early Years Alliance, which represents organisations in England, said “serious questions” remain over the plans to extend free childcare offers.
CEO Neil Leitch said: “While the chancellor claims to be building a ‘childcare system comparable to the best’, the news that early years settings will only receive an initial increase in funding of £204 million for the three and four-year-olds completely flies in the face of this rhetoric.”
With the current shortfall for two, three and four-year-olds estimated to be around £1.8 billion based on government’s own figures, Leitch said the additional funding is “highly unlikely” to match what is needed.
Economic think tank the Institute for Fiscal Studies warned that Hunt’s changes bring “huge risks” for the childcare market.
They said if the funding rate is too low, providers could opt out of delivering the new entitlement or even leave the market entirely. That could make it even harder for parents to find a childcare place.
Christine Farquharson, from the IFS, said that for such a “huge reform” the budget provided “remarkably little detail” on the funding rate nurseries will receive.
TUC general secretary Paul Nowak said they were concerned the funding “falls short” of what is needed and said workers needed better pay and conditions in order to recruit and retain.
The Local Government Association said the announcements required “significant investment” in the workforce and nurseries, while Justine Roberts from Mumsnet said there were “clearly concerns” about whether the funding allocated is actually sufficient to deliver the expanded provision.
Leitch, from the Early Years Alliance, pointed out that while Hunt’s plan will drive up demand for places, it is unclear how ministers intend to ensure adequate supply.
Tory MP Robin Walker, who chairs the Commons education committee, has raised questions over how the sector will scale-up in time to meet the increase in demand for childcare that will follow.
Labour MP Stella Creasy, who has been campaigning on the issue, warned that without proper funding, Hunt’s plan has all the hallmarks of the Help To Buy scheme which made the housing market “worse for first time buyers”.
She added: “The government must urgently clarify more money will be made available if they are going to meet the demand they have created or else risk a lot of angry parents and children still stuck without care.”
Joeli Brearley, from Pregnant Then Screwed, said that without a workforce plan, providers will continue to be “forced to close”.
Angela McConville, chief executive at NCT, said that there was “little point” in making childcare free if there are limited childcare settings for families to access.
“This reform will inevitably lead to rising demand in provision and many childcare settings are already oversubscribed,” she added.
One Labour source said the plan to increase minimum staff-to-child ratios in England from 1:4 to 1:5 for two-year-olds was “complete nonsense”. They said most providers do not want it, adding: “It’s just going to reduce quality and safety.”
Leitch described the ratio change as “utterly appalling” and stressed that parents want to ensure their children are in safe environments receiving quality care and education “something this policy completely flies in the face of”.
Pregnant Then Screwed said that increasing ratios will “add pressure” to an underpaid workforce while London Labour Assembly member Marina Ahmad went one step further saying: “I am concerned current plans will compromise child safety and quality of care.”
Unison general secretary Christina McAnea added: “Altering the ratios so fewer minimum wage childcare staff end up looking after ever more youngsters is not the answer.”
Megan Jarvie, from charity Coram, said the programme must be funded at a level that covers the costs of high-quality care. She pointed out that many providers find the current level of funding “too low”.
How Bad Is The UK’s Childcare Crisis?
Global picture: Parents in the UK face some of the most expensive childcare costs among leading economies, according to the Organisation for Economic Co-operation and Development (OECD).
Soaring costs: The average annual cost of a full-time nursery place for a child under two in Great Britain is now £14,836, according to charity Coram.
Postcode lottery: The average weekly cost of a part-time place for a child under two is 54% higher in inner London (£199.01) than in Yorkshire and Humberside (£129.32).
Staffing woes: A survey of providers found that 84% said they were finding it “difficult” to recruit suitable new early years staff, with a majority (60%) finding it “very difficult”.
Nursery closures: There has been a high number of early years setting closures across England with 5,400 closing in the year to August 2022, according to Ofsted data.
The Fight For Britain’s Childcare System Is On
All this shows that the country’s childcare crisis is far from resolved and is on course to be a major fight between the two parties at the general election.
Not only this, but the bulk of Hunt’s reforms on childcare hours will not come into force until after the election, which is expected in 2024.
“It’s going to be a huge election issue and by no means is this the end of it,” said one Labour party source. “There’s plenty of scope for us to talk about our offer. This isn’t the end of the debate at all.”
Angela McConville, chief executive at NCT, warned that “headlines can be misleading” and added: “The changes implemented won’t begin until next year and won’t extend to all 9-month-olds until 2025.”
Labour’s shadow education secretary Phillipson promised Labour will make reforming childcare the “heart of our mission” to break down “barriers to opportunity”.
HuffPost UK understands Labour plans to talk about standards in childcare in the next couple of weeks.
With the Tories focused on getting parents into work, they see children’s life chances as a huge gap in their plan.
They will also be talking about a properly trained workforce which they will argue is completely absent from Hunt’s budget.
Rachel Statham, from think tank Institute for Public Policy Research, stressed that the country needs “wholesale reform” to deliver affordable, available, high-quality care to families.
“For now, significant questions on funding, quality and supply of places remain unanswered,” she added.
Charlotte Alldritt, CEO of the Centre for Progressive Policy think tank, said: “The government’s offer is bold and ambitious, and while the devil is in the detail, the ball is now in the opposition’s court to respond.
“Labour has talked big on childcare but has revealed little of its policy offer to date.
“With high costs continuing to bite into family budgets, and living standards continuing to stagnate, voters need to know which party they can trust to deliver, and fast. The election battle for childcare is firmly on.”
Leitch, from the Early Years Alliance, said it is “clear” that building and maintaining a strong early years sector must be a “key focus” of all political parties at the next election.
He added: “It’s vital that the upcoming election isn’t just another battle over who can promise the most ‘free childcare’, with the sector treated as little more than a political football.”
The Department for Education referred us to an interview with education secretary Gillian Keegan in Grazia magazine.
Asked how they will ensure nurseries can cope, Keegan said there would be more money in the system with providers able to work out how they want to use it.
“Some of it will go into wages and salaries and retain and attract people,” she said.
Government sources stressed that Hunt’s plan represented the “biggest investment in childcare in England ever”.
“By 2027-28, we expect to be spending in excess of £8 billion every year on free hours and early education, helping working families with their childcare costs,” they added.