Can Deregulation Fix Britain’s Childcare Challenge

Published on Tax and Welfare

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.

Childminders are an critical part of the solution to Britain’s childcare problem. They generally provide cheaper childcare than nurseries and, more importantly, they provide the kind of flexibility that fits with today’s working patterns. Nearly 70 percent of parents now work outside of nine to five but few nurseries can provide care early in the mornings or late into the evenings. Those that have tried to open at weekends and overnight have failed because the overheads of running a nursery mean that you need a lot of parents signed up to make the business viable. Childminders are undoubtedly the solution to most childcare needs outside of core hours and Elizabeth Truss is right that we need to reverse their decline to provide better support to working parents.

On ratios, Truss’ argument that we can make childcare cheaper by allowing each adult to look after more children is risky if superficially attractive. We do have tighter child to adult ratios than many other countries in the world because we have also had less well qualified staff. After nearly a decade of investment in the workforce, only 7% of childcare workers have a degree-level qualification and 8 percent remain unqualified. Experts agree that if we can improve the skills of childcare staff, we can relax the ratio of adults to children for three and four year olds and there is already regulation in place to allow that. Where a qualified teacher is looking after children aged three and four, the ratio is 1 teacher to 13 children rather than 1 to 8 for less well qualified staff.

We shouldn’t be fooled that we can maintain or raise quality without greater investment if we also want to reduce costs for families. Freeing up ratios without first improving the quality of staff could reduce costs but at children’s expense. The roll out of cheap childcare in Quebec in Canada was initially welcomed by working parents but turned out to have a detrimental impact on children’s development. No doubt, additional investment in childcare would partly pay for itself over time. More women in work would reduce the benefits and tax credit bill and increase tax revenue, not to mention other positive social benefits of reducing worklessness. And we have a lot of room for improvement on maternal employment. Britain ranks only 30th out of 43 OCED countries for employment among women with school age children– the point at which maternal employment generally picks up again.

Coincidentally, this week also marks the first anniversary of the government’s social mobility strategy. Central to the strategy’s aims is to close the early gaps in development between children from the poorest families and their more affluent peers. High quality childcare starting from age two is a big part of the solution. Quality costs but policymakers cannot not give up on it. Cheaper childcare for poorer quality is not a trade off that working parents are willing to make either.