Think tank puts forward ideas to fix the UK's 'broken' childcare system

Published by independent, not-for-profit think tank Onward, the report, ‘First Steps: Fixing Childcare’, acknowledges that providers are ‘struggling to stay open, staff turnover is high and childminder numbers have plummeted.’

It suggests a number of provider-side reforms such as giving childminder agencies cash incentives and reforming business rates.

The think tank lists other problems with the childcare system, including the complexity and costly use of at least eight schemes across different Government departments to subsidise childcare costs, and how parents have little choice about when and how their children are looked after.

Its report is based upon a poll of 1,037 parents with children under five which highlights rising childcare fees, with nearly a third of families saying that childcare is one of their most expensive costs. However, when asked about possible reforms, most were against relaxing childcare ratios as previous research and petitions have shown.

The think tank puts forward a five-point plan, which it says is ‘fiscally and politically feasible, and genuinely tackles the root causes of our broken system', covering the following recommendations:

• To create a new system of childcare credits for children aged one to four, paid monthly in advance, to ‘radically simplify’ the market and empower parents. Low-income families would be supported with an additional childcare credit.
• For parents to have the option to ‘front-load’ child benefit payments when a child is younger, in exchange for lower payments when the child is older. This would be capped at a maximum of a third of the whole entitlement over the first three years of a child’s life.
• Introduce a number of provider side reforms, including boosting childminder agencies by giving them £1,000 for each childminder they register that starts trading, as well reforming business rates to boost staff pay within the sector.
• Incentivise graduates into the workforce by extending the Early Career Framework to early years educators and boost training opportunities for existing practitioners through a ‘centralised’ CPD system.
• Reform parental leave by abolishing separate maternity and paternity leave in favour of a single parental leave scheme.
• Expand family hubs to enable easier access and better outcomes for families. To ensure better data collection surrounding early childhood outcomes, Unique Pupil Numbers should be assigned at birth.

Siobhan Baillie, MP for Stroud, a member of the advisory board for Onward, said, ‘World class childcare is not only about giving children the best possible start to life. It is vital to support parents and carers during what can often be a stressful and yet wonderfully rewarding time of life. It is an essential part of helping these parents back to work and fulfil their full potential. In short, it impacts all of us. Onward has listened to the many helpful suggestions we received, examined all of the data closely and proposed some simple and clear suggestions for change. I am sure you will find this report compelling.’

'It is clear that Government underfunding of childcare places is the root cause of the current crisis in early years'.

The National Day Nurseries Association (NDNA) said it has supported the idea of ‘streamlining’ all forms of childcare support into one account since 2017.

Chief executive Purnima Tanuku explained, ‘Policy around early education and childcare is in desperate need of reform and investment. It is clear that Government underfunding of childcare places is the root cause of the current crisis in early years that impacts children, families and our economy.

‘We have supported the idea of streamlining all forms of childcare support into one childcare account since 2017. As well as simplifying the system for parents and providers, it would remove the layer of administration which has resulted in millions of pounds in early years funding left unspent by local authorities. 

‘Exempting private nurseries from paying business rates, that add an average of £13,250 to their running costs, would mean childcare settings could invest in staffing, training and limiting cost increases to parents.’

The Early Years Alliance (EYA) was critical of the report however, saying it is ‘far from convinced that the proposed childcare credits policy is the solution’.

Chief executive Neil Leitch commented, ‘We strongly believe that all children, regardless of background, should be able to access a high-quality education. On the face of it, however, the proposed policy put forward by the think tank would only provide families with a marginal subsidy towards their early years costs meaning that, even with the proposed means-tested ‘additional childcare credit’ those on lower incomes would have much more limited flexibility and choice when it came to accessing care and education for their children. 

‘Focusing on trying to deliver “childcare on the cheap” is not, and has never been, the answer to the problems our sector is facing. Indeed, it is the very reason we are facing such a crisis.’

• The report is available here