Think tank backs relaxing childcare ratios to address the cost-of-living crisis

The report from think tank the Institute of Economic Affairs (IEA), which looks at ways to address the cost-of-living crisis, suggests that relaxing ratios in early years settings and removing some regulatory requirements would cut childcare costs by around 40 per cent or over £300 per child a month.

It states ‘Childcare costs in the UK have risen to one of the highest levels in the developed world. This is in large part due to stringent minimum staff-to-childcare (sic) ratios, the imposition of a “curriculum”, accreditation costs, and more generally, over-formalisation of the sector.'

It goes on to say, ‘Relaxing childcare sector regulatory requirements does not have to mean complete deregulation. It could merely mean bringing them into line with what is standard practice in many European neighbour countries. This could cut costs by around 40 per cent, or over £300 per child and per month.’

The report comes weeks after the Government launched a consultation on proposed changes to childcare regulation including reducing staff: child ratios in England for two-year-olds from 1:4 to 1:5 and making changes to the EYFS.

The National Day Nurseries Association (NDNA) accused the IEA of ‘completely missing the mark’ with its report.

Chief executive Purnima Tanuku said, ‘In the UK we have one of the lowest levels of Government spending on early years per child among developed countries. The impact of this low investment rate is completely missing from the IEA’s report and so the solutions proposed completely miss the mark.

‘The early years of a child’s life are crucial because around 90 per cent of brain development happens before they reach the age of five. High quality early education and care has a lasting impact throughout a child’s life and drastically improves their educational outcomes. What is being proposed is a race to the bottom, ultimately selling children and families short.

‘The biggest driver of higher childcare costs to parents is the Government’s consistent underfunding of the hours they buy from early years providers. Parents will rightly question why children are underfunded to the tune of £2,000 a year, leaving providers and families to foot the bill. If the Government is truly committed to supporting families with the cost of childcare they must pay a fair price for their funded places.’

The Government's own consultation, launched earlier this month, said that their proposals to increase the number of two-year-olds staff can look after from four to five could potentially reduce the cost by up to £40 per week, for a family paying £265 per week for care for their two-year-old - if providers adopt the changes and pass all the savings on to parents. 

• The report - 'Cutting Through: How to address the cost of living'