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Vidhya Alakeson looks behind the headline figures of economic recovery


There was more economic good news this week with the National Institute for Economic and Social Research confirming that growth is back to where it was in 2008, just before the financial crisis. For many childcare providers, this will come as a relief.

A growing economy that is creating jobs should mean more demand, less under-occupancy and a better chance of survival. However, a significant minority of the jobs being created are too insecure to be relied upon.

One of the most interesting features of the jobs recovery has been the growth in self-employment. Four out of five of the new jobs that have been created since 2008 are in self-employment. In large parts of the country, employee jobs are continuing to fall, and only self-employment is filling the gap. For example, in the North West, 62,000 self-employed jobs were created between 2008 and 2013, while 44,000 employee jobs were lost.

For the majority of the self-employed, this way of working is a choice. But just over a quarter of those who became self-employed after the crash did so for lack of a better alternative and, among those with the lowest skills, that figure is close to half. We are talking about construction workers, gardeners, cleaners and supply teachers, not just entrepreneurs.

For a significant minority of the 4.5 million self-employed, their work is not secure enough and not well paid enough to reliably afford childcare. Underemployment remains an issue, slightly more so than for employees. In fact, it would appear that the self-employed have weathered the downturn by taking a cut in pay and hours, leaving the typical self-employed person earning 40 per cent less than the typical employee. Under these circumstances, informal care is less risky and cheaper.

Some provision, particularly in areas with fewer full-time working parents, will have been lost during the hard times. For those providers that have survived, the challenges are not yet over. Ensuring that enough places are sustained will be critical if families are to benefit from the opportunities of better times.

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