06 Sep 2016, Catherine Gaunt
The move is one of a series of recommendations from a report, ‘We can solve poverty in the UK’, by the independent charity that calls for a radical overhaul of the childcare system, as a means of solving poverty in a generation by 2030.
The JRF says that over the past four years it has drawn on evidence and research to come up with the plan.
It says the Government should raise taxes on the wealthiest to provide an extra £15 billion a year to raise benefits and invest in housing and childcare for families on low-incomes.
The report calls for a new ‘long term deal’ to solve poverty – between governments, business and the public -, so that the first cohort of ‘Brexit children’ starting school this Autumn grow up and enter adult life in a UK that is prosperous and poverty-free.
It points out that by the age of three, a child born into poverty is significantly behind in their cognitive development – a gap that widens by the time they are five.
The charity says that poverty costs the UK 78 billion a year, £1,200 for every person and equivalent to 4 per cent of the UK’s GDP. £69 billion of this figure is spent on public services needed to pick up the pieces dealing with poverty – £1 in every £5 spent on public services.
A further £9 billion is lost tax revenue and extra benefits spending due to the knock-on effects of poverty later in life.
The JRF says that the first priority should be a reboot of markets towards a more responsible capitalism that benefits people on low incomes, and is calling for Government, regulators and companies to work together to end the ‘poverty premium’, where people on low incomes pay more for goods and services such as fuel and credit.
To support families it recommends increasing the quality, affordability and availability of childcare, so that more parents can work and to improve children’s development.
The JRF suggests keeping the 15 hours of free childcare a week for three- and four-year-olds, extending this over time to two-year-olds, but not increasing the free entitlement to 30 hours a week.
These reforms – costed at increasing public funding over a decade to an extra £5.4 billion a year – would remove parental contributions for childcare costs for families on low incomes, where parents are in work, education or training, or preparing for work.
There would also be a move to a graduate-led, fully qualified workforce in early years education.
Julia Unwin, chief executive of JRF, said,’ The level of poverty in the UK is shameful. This should be a place where everyone can live a decent, secure life. Instead, 13 million people – half of whom are in a working family – are living without enough to meet their needs.’
Commenting on the report’s childcare proposals, Neil Leitch, chief executive of the Pre-school Learning Alliance, said, ‘JRF rightly recognises the value of early years education in improving a child’s life chances, and crucially, the substantial investment that is required to do so.
‘We are generally supportive of the 30-hour offer and recognise that, if funded adequately and rolled out effectively, it’s a policy that will have huge benefits for children and families struggling with the cost of childcare.'
The Alliance shares the report’s concern that the offer currently doesn’t focus sufficiently on those families most in need of support.
Mr Leitch added, ‘Given the Government has stressed the need for the scheme to provide “value to the taxpayer”, the decision to enable parents earning up to £100,000 each to qualify for the entitlement is bizarre to say the least. This is especially regressive given that those at the upper end of the salary scale will only have to work for a few hours a week to benefit from the additional hours, compared to 16 hours for those earning the national minimum or living wage.
‘If the Government truly wants to use its limited resources to maximum effect and more importantly, to close the gap between disadvantaged children and their more affluent peers, it would do better to focus its efforts on parents at the other end of the scale, such as those on low incomes or those looking for work.’
The Department for Education confirmed that the additional 15 hours will be available to families where both parents are working (or the sole parent is working in a lone parent family), and each parent earns, on average, a weekly minimum equivalent of 16 hours at national minimum wage (NMW) or national living wage (NLW), and less than £100,000 per year.
A DfE spokesperson said, 'We are doubling our free childcare offer for working parents to make it easier for them to get on and balance work with their family lives – this is backed up by the record £6 billion we will be spending on childcare by the end of this Parliament.
'This extra child care will be available to every working household that earns at least £115 a week – and Universal Credits and Tax Credits will continue to help people who earn less than that.'