The Coalition Government announced on Monday its proposals to enable parents to claim up to £2000 a year in tax breaks to help pay for childminders and nurseries. The proposals, part of the Coalition’s mid-term review, did not provide any details as to how such tax breaks would work in practice nor to whom they would apply but the focus is clear: the Coalition has recognised the need to support working families with their childcare costs and is trying to find a solution that works.
The devil, as always however, is in the detail to be announced next week but one thing is clear, tax breaks are not, on their own, going to help the majority of hard working parents whose childcare costs often exceed the cost of their mortgage. A report from the Barnardo’s charity, published on Monday, found that, due to high childcare costs, many parents earned nothing or even effectively had to pay for the privilege of working extra hours. As the Resolution Foundation recently outlined, the cost of childcare often forces many mothers to stay at home because the benefits of work simply don’t add up when the costs of childcare, commuting and sundry costs are taken into consideration. That is if you can get a job that fits with your childcare hours in the first place.
Affordable childcare is vital in increasing the percentage of women in work at both ends of the income scale. The proposals that were announced on Monday have been criticised for benefiting those who are already on high incomes and not supporting those who are on low incomes. However £2000 is in reality not enough to help any family where both parents are working full time for several reasons. Firstly parents with two children under the age of 4 in the South of England can expect to pay at least £4000 a term for two nursery places and that is notwithstanding the 15 hours free childcare a child received in the term after their third birthday. Secondly, the majority of nurseries finish at 4pm, with few offering after hours care that fit with parents’ working full time work schedules. A full time job does not finish at 4pm and therefore any family commuting into London will need after hours childcare in addition to nursery. There needs to be a system in place, such as is set out in the Finnish Act on Day Care which stipulates that authorities have to provide childcare at time parents need it, including evenings, nights and weekends if necessary. In 62% of Finnish municipalities the demand for this type of shift care is fully or almost met. Denmark also has similar provisions whereby a number of nurseries and kindergartens offer childcare during the evening and night hours.
It is not just a case of throwing money at the problem. As Anand Shukla, chief executive of the Daycare Trust, said in his opinion for the Guardian on Monday, “We need to ensure that there is childcare for parents with atypical work patterns and that all parents are able to benefit from family-friendly employment practices.” Nurseries need to be able to recruit highly qualified staff that are prepared to work longer hours in face of a growing demand by working parents. For that nurseries need to be better funded whilst on the other hand employers have to be more flexible to allow for different work patterns for parents keen to return to work on a full time basis.
It will be interesting to see what the detail is, once the powers that be have met on Thursday to hammer out the final points. However one thing is clear, childcare costs are only one element of this issue and the Coalition is going to have a devil of a job reforming the childcare system for the benefit of all. At least the tax breaks are a start.
- Nick Clegg promises to cut cost of childcare (telegraph.co.uk)
- 52 per cent of stay at home mums want to work but can’t afford to, official figures show (telegraph.co.uk)
- Childcare cost ‘impossible’ for many (bbc.co.uk)