Within its report entitled ‘The Childcare Guarantee’, published ahead of the budget 2014 next Wednesday, 4Children argues that too many families are unable to take advantage of high-quality childcare as provision is not as affordable or flexible as it needs to be.
According to the charity, if childcare costs continue to rise at the current rate, in ten years' time nearly 40 per cent of the average family disposable income will be taken up by childcare fees.
4Children claims that this would increase to almost 100 per cent of a family’s disposable income in 50 years’ time, based on the same increase.
Disposable income refers to the amount that households have to spend after direct taxes, including income and council tax, but does not include housing costs.
The figures are based on the assumption that the average family disposable income will continue to increase by 13 per cent every five years, as ONS statistics on family income show has happened over the last five years. It also presumes that childcare costs will continue to rise by 27 per cent every five years as the Family and Childcare Trust childcare costs survey 2014 shows.
In light of this, 4Children is calling for a new ten-year vision towards a universal childcare guarantee for families with children up to the age of 14. This would include:
- Extending the pupil premium, which supports children from poorer families, to pre-school children.
- Ensuring all families have access to affordable and high-quality childcare from the end of their parental leave up until children start school.
- The introduction of childcare hubs that would co-ordinate childcare in every area to offer parents flexible childcare at times to suit them.
- A guarantee of 8am-6pm ‘wrap-a-round’ childcare for four- 14-year-olds in and around schools, including during the school holidays.
The report goes on to recommend that working parents on tax credits or Universal Credit have 85 per cent of their childcare costs met by the state.
Providing affordable childcare would also be a key way to improve the lives of the 3.5 million children living in poverty, says 4Children, as it would help parents back into work or enable them to work longer hours, as well as providing children with support at the crucial early stages of their life.
Anne Longfield, chief executive of 4Children, said, ‘Childcare is one of the biggest challenges for parents today who are making tough decisions between children, family and work. Too many parents are still prevented from returning to work or working the hours they need because childcare is too expensive.
‘If childcare costs continue to rise as they have, this will add to the further future financial pain inflicted on today’s cash strapped so-called ‘Generation Y’ of 19-31 year olds.
‘Today’s 20-somethings, already struggling to find work, will be the new generation of parents.
‘Although we are pleased that all the main political parties have committed to incremental improvements in childcare they all fall short of the radical shift needed to make childcare available and affordable for all families. More ambition is needed to deliver a guarantee of childcare to meet the needs of the modern workforce over the next ten years.’
A Department for Education spokesperson said, 'This month, the Family and Childcare Cost survey showed the cost of childcare in England has fallen for the first time in 12 years. This means more parents are able to access affordable childcare and support their families. This is in contrast to rising costs in Scotland and Wales, highlighting the difference this Government's reforms are making.
'At the same time, we are meeting up to 70 per cent of childcare costs for low- and middle-income families through tax credits. We are also extending free early education to 260,000 disadvantaged two-year-olds and have increased the allowance for three and four-year-olds to 15 hours a week. We have also encouraged schools to offer more childcare and made it easier for good and outstanding childminders to offer free early education. This Government is also introducing tax-free childcare which will see all eligible families receive up to £1,200 towards each child's childcare costs.'