Let’s give parents back control

In the heart of Deptford lies a nursery with an unusual history. Opened by passionate Christian Socialists in 1914, it was set up to remedy the appalling deprivation suffered by local families at the time in which many children had rickets, tuberculosis and anaemia. The cure? Allow parents living in slum accommodation to drop their children off during long shifts of factory work and make the whole setting open air. This included a boarding facility at night time, in the local churchyard, amongst the tombstones.

Until surprisingly recently, this sort of well-meaning if eccentric initiative was what passed for childcare in this country. Formal childcare, supported by the state, is a relative latecomer. Most pre‑school children, right up to the late 20th century, were looked after informally by family and neighbours.

Formal childcare has emerged only in the past few decades as a response to the increasing number of mothers wanting to re-enter the workforce before their children start school.

This is laudable — but the way it has been implemented has created a system of complex and incommensurable needs, in which the state’s incentives (economic participation; egalitarian opportunities) often collide with the variety of parental preference. It needs to be asked whether it has been a success, and whether we should return to practices that give more heed to parental preference. 

Recent funding for childcare has risen exponentially and is only set to rise further. As recently as the turn of the millennium, we were spending about £1.5bn on childcare; this year that figure is set to be £10.5bn, and on a steep trajectory to rise higher. And yet parents still say childcare is too expensive.

And yet still the status quo is in deep trouble. Less than half of parents report they can easily access the childcare they need. And despite increased entitlements, almost 20 per cent have gone into debt and over 30 per cent have used their savings to cover childcare costs. The sector too is under strain with many settings cutting back or facing closure; childminders, our own home-grown provision that offers local support to parents, is in freefall, from 100,000 in the mid-1990s to just around 25,000 last year.

Under a rigid system built on various but questionable assumptions, the state has become so intertwined with childcare that it has distorted the market for finding childcare at a price, time and quality that works for families.   

It has done this in two ways. Firstly,  its rigid control on the supply of childcare (i.e. which childcare providers can operate, how they do so and how much they can charge) blocks innovation, productivity, and choice, whilst driving up costs. The state currently pays for 80 per cent of childcare hours. Secondly, its inflexible control on demand (i.e. the eligibility of families who are given state support) further distorts the market and undermines choice.

Few parents, especially those in low paid or flexible work, are well served by it. Data taken from the Department for Education’s survey of parents shows that, of working mothers of children aged 0-4, 69 per cent would work fewer hours if they could afford it; but, of non-working mothers of children aged 0-4, 54 per cent would prefer to go out to work if they found affordable childcare. The current system works for neither group.

What is to be done? Policy Exchange’s new report, A Matter of Choice: Giving Parents Back Control Over Childcare, comes down strongly in favour of a policy founded on the diversity of parental preferences, one that would give greater support for more families to access the support they need for young children.

Parents frequently report that the cost of living and childcare is top of the list of making family life harder

The government should not be in the business of “picking winners” when it comes to particular forms of family, work and childcare arrangements. England has a unique history and culture of child-rearing and a diverse, organic supply of provision spanning relatives, local informal options provided by churches, villages and cooperatives alongside an array of formal options. We do not have a native tradition of institutional daycare as dreamt up by continental reformers like Froebel or Montessori.

In the same way that our schools sector is richly pluralistic, comprising faith schools, selective schools, specialist schools, academies, comprehensives and independent schools, we should value our diverse childcare sector and restore trust and faith to parents’ judgement while supporting them with the means to act on it.

Our report calls for the entire £10.5 billion pound system to be scrapped, and replaced by a new system — costing the same amount — that would put control back in the hands of parents: 

1. Increase child benefit for 0-2 year olds by £2500 per year per child. This would give parents the freedom to choose to either work more, or spend more time with their children.
2. A new £7,000 a year childcare voucher for 3-4 year olds. Families would be given a payment card with £7,000 per child pre-loaded onto it to be spent on any Ofsted-regulated childcare provider.
3. A universal approach: abolish the removal of childcare support from those earning £100k — a tax on aspiration — and extend the support to those who are not working — so children who would most benefit from the educational gains can do so.

The report also proposes a number of regulatory reforms that would help bring down the cost of childcare and make it easier for new childminders and other providers to enter the market, increasing the availability and flexibility of childcare for parents.

Parents frequently report that the cost of living and childcare is top of the list of making family life harder. The proposals set out by Policy Exchange have the potential to make a real difference — for children and adults alike.