A sensible approach to childcare

Childcare in the UK is very expensive, with only the Czech Republic and Cyprus coming ahead of the UK in costs. Part of the reason is that the ratio of adults required per child is very high. Currently in nurseries and pre-schools, there has to be one adult to three children for under two-year-olds, one adult to four children for two to three-years-olds and one adult to eight children for three to seven-year-olds.

The most recent Family and Childcare Trust’s annual report found many parents are spending more on childcare than their mortgage, with average fees for part-time childcare for children under two reaching £7,134 per year. Full-time childcare costs for a family with a two-year-old and a five-year-old child are estimated at £11,700 a year.

This is a strong disincentive for young mothers to return to the workforce and contribute to economic expansion. In some countries childcare is heavily subsidized, meaning that a large part of the cost is borne by the taxpayer, rather than by the parents. The tax implications make this an unlikely prospect for the UK, but there are promising alternatives.

Three players that could increase the availability of childcare in the UK and reduce its cost are the government, business and the informal sector of relatives, friends and neighbours.

Government could look at the adult to child ratios in other countries, and bring our own rules into line with those which seem to work successfully elsewhere. It could work in partnership with business to increase the provision of workplace nurseries by providing tax incentives that encourage firms to do so.

There is scope for flexible working arrangements to help parents juggle work and childcare responsibilities.

Schools could play a role in providing shared facilities, joint training programs, and coordination of services.

A huge contribution could be made by supporting and expanding informal child- care. Grandparents and relatives could be encouraged to provide childcare through access to resources and some financial assistance. Neighbours could be encouraged to provide childcare as they looked after their own children. Neighbourhood childcare groups could share the burden of childcare between groups of parents who took turns to share the responsibilities.

And the government could take steps that made it easier for entrepreneurs to set up chains of childcare businesses on a for-profit basis by making the regulatory and tax environment attractive to would-be investors, such as tax credits for crèches in their office buildings.

A combination of such measures could revolutionize childcare in the UK, and bring it within reach of most of those who needed it and at affordable costs.