Make free childcare universal, says UK business organisation

It follows a survey of 1,600 UK business leaders by the BCC, in partnership with Middlesex University, which revealed that one in nine has lost staff due to the high cost of childcare. A further 28 per cent of firms said they had seen a reduction of working hours and 12 per cent a drop in productivity.

Of those that took part in the survey, 33 per cent said they regarded the availability of childcare as a key issue in recruiting and retaining staff. As such, they viewed the introduction of the 30 hours of free childcare as very positive.

Adam Marshall, director general at the British Chambers of Commerce (BCC), said, ‘Firms across the UK are losing talented staff, often because of the availability and high cost of childcare.

‘At a time when economic growth is softening, and skills gaps and recruitment difficulties are hindering businesses, the Government should consider the childcare system as part of Britain’s core business infrastructure – in the same way that it thinks of energy, transport, or broadband.

‘Government must take a clear and detailed look at the costs and benefits of a universal childcare entitlement, to bridge the gap between parental leave and the start of school. This could take the form of a family account that enables parents to select the support that’s right for their working patterns from the market. In time, this could help businesses raise productivity, and help more parents stay in work. As businesses have evolved to become more flexible, Government policy should also evolve – to help as many working parents as possible stay in the workplace.’

The National Day Nurseries Association said the BCC’s proposals for universal free childcare would provide a ‘revolution’ for working families, but it would need sufficient investment in order to be adequately funded.

Its chief executive Purnima Tanuku explained, ‘Due to years of underfunding for the ‘free’ hours that three- and four-year-olds receive, nurseries have been forced to increase the cost of hours that parents pay for to make up the shortfall. They are in effect subsidising the funded hours.

'If the Government paid a fair price for these funded hours to allow nurseries to be sustainable without passing the shortfall onto parents, childcare would be much more affordable. This is a particular concern with 30 hours funded childcare due to be rolled out across England next September, and in Scotland and Wales shortly after as the funding shortfall will increase.

‘We have called for the Government to either increase the base funding rate or give flexibility to allow nurseries to be able to charge parents for extras such as meals or activities as a condition of a place in order to make the childcare offer sustainable.’