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What does the childcare announcement really tell us?

Gavin Kelly

This post originally appeared on Gavin's New Statesman blog

Before we rush to dissect the government’s new childcare policy it is worth pausing to reflect on the very fact that in an unprecedented time of austerity a Conservative-led administration is proposing to spend near on £1bn on childcare. There are all sorts of caveats and problems with the policy, when it will be introduced and how it will be paid for. But before we rush into all that we should note that today’s announcement confirms that the issue of childcare will remain at the centre of the political arena.

James Plunkett

This blog originally appeared on the New Statesman

The government claims to want to reduce costs and increase quality. It can't have it both ways. This morning’s announcement on childcare ratios should be just the hors d'oeuvre before the government sets out its plans to increase childcare support for parents. According to the latest rumours, it now looks likely that the majority of any new money will be spent on tax relief for higher income households, making this a potentially important political moment. For now, though, today’s announcement merits some serious attention.

James Plunkett

This blog originally appeared on the Huffington Post

Uncertainty continues to cloud the government's plans on childcare. Latest rumours suggest they may now delay any big announcement until after the budget. If government sources are to be believed, the most recent plans have been scuppered by a tag team of HMT officials and senior Lib Dems. The Treasury is reportedly worried that childcare costs could soar if the government went ahead with its plan for £2,000 childcare tax breaks - pumping new money into the system without getting a grip on prices - making a bad situation worse. Meanwhile, Nick Clegg and his allies are known to fear that an approach based on tax relief would funnel support to high income families. That would send a very odd message about priorities when low and middle income households have already suffered badly from childcare cuts.

Vidhya Alakeson

This post originally appeared on The Staggers blog

At present, there are almost no voucher recipients among the poorest 40 per cent of households.
In the week that parents earning over £50,000 saw their child benefit cut, the speculation is that the government intends to introduce tax relief for childcare, possibly making those who were worse off from the child benefit change, better off once again. In the absence of an announcement from ministers, we will not know what the government actually intends to do until next week’s announcement. But the talk is of the introduction of basic rate tax relief for childcare worth £2,000 a year per child.

James Plunkett

This post orginally appeared on The Huffingtom Post blog

There may have been few details in Monday's renewal of Coalition vows but one key policy continues to invite debate: the government's plans for childcare. Much remains uncertain but it does now seem clear that the government hopes to use tax relief as its key way of reducing childcare costs. While Coalition wrangles continue about the distributional impact of this choice, it now seems likely this will mean a shift of priorities away from Labour's focus on tax credits and universal free places for preschool kids. And if new tax reliefs are worth £2,000 per child as briefing suggests - roughly twice as large as those in the current system - a relatively big change may be in the offing.

James Plunkett

This post originally appeared on the Huffington Post

Few political debates have made more progress in 2012 than that around childcare. In the past 12 months, all three major parties have come to see reform as an economic and political necessity.

Although hard policy proposals are yet to emerge, it's now clear that one yardstick for 2015 will be the strength of parties' plans for improving the availability and cost of childcare for low to middle income working parents. In the meantime, a search is on for fresh ideas that would gain early ground on this politically valuable new terrain.

Alex Hurrell

The final report of the Commission on Living Standards, a broad group of leading employers, trade unionists, economists and heads of parents’ groups brought together by the independent think-tank the Resolution Foundation, was launched on Wednesday.

A key recommendation put forward in the report was to extend the Early Years Entitlement (EYE) of 15 free hours of childcare for all three and four year olds to 25 hours a week, and from 38 to 47 weeks per year. Hours 16 to 25 would be charged for, but at a nominal rate of just £1 per hour. This would mean 25 hours of childcare would cost just £10 a week. This change would make it easier for second earners in couple households, predominantly mothers, to take up a part-time employment.

Giselle Cory

This post originally appeared on Coffee House, The Spectator Blog

We know that the growth of women in work has been a significant driver of household income growth in the UK over the last 50 years. In fact, children are now most likely to grow up in poverty in male breadwinner households.

Today’s publication of the annual snapshot of America’s middle class - The State of Working America – reveals a similar trend on the other side of the Atlantic. As Figure 1 shows, American families with women in work saw their family incomes rise from the early 1970s until the early 2000s. Conversely, families without a woman in work (both couples and single parents) did not.

Vidhya Alakeson

This blog originally appeared on the Huffington Post

At the start of this week Conservative MP, Elizabeth Truss, published her proposals for reducing the high costs of childcare in Britain. At the heart of her proposals is a drive to reduce regulation on the childcare industry. Truss has two main ideas: a relaxation of ratios so that a single childcare worker can look after more children and replacing the Ofsted registration and inspection scheme for childminders with accreditation through agencies as in the Netherlands. This, Truss argues, would lower the barriers to becoming a childminder and bring many people who are at home looking after their own children into the profession. The National Childminding Association could not have hoped for better marketing than it has had from Elizabeth Truss. While she is right on the importance of childminders, her proposals are not the answer to the affordability challenge facing working families.