Marilyn Stowe Blog

Childcare costs mean work doesn’t pay for many parents

If there is one lament you hear more than any other from the parents of young children it is not tantrums, stress or sleepless nights: it is the spiralling cost of childcare, and a new report from research and policy organisation the Resolution Foundation shows just how dire the situation has become for many. Families with two children earning between £17,000 and £41,000 a year are now, for the first time, little better off than those who are officially poor, once those sky-high childcare fees have been paid for. As more and more people drift into part time work in a difficult economy, the situation gets worse and worse.

According to the report, Counting the Costs of Childcare: “…the UK has some of the most expensive childcare in the world.”

According to 2008 figures from the OECD, the average spend on childcare here is a hefty 27 per cent of income  for a couple earning doubling the national average compared to a European average of only 13 per cent. According to the Resolution Foundation, that figure has now reached 30 per cent.  Swedish Mums and Dads seem to be some of the continent’s luckiest: the average spend on childcare there is just five per cent of income.

If you have a child aged two or under and plan to return to work, you are looking at costs of at least £5,000 per year for 25 hours of nursery time per week, rising to around £6,000 in London. And that’s at the cheaper end of provision.

In a detailing analysis of the impact of childcare costs on families in different income streams, the report demonstrates the ways in which childcare costs, which have risen year on year, interact with sliding tax and benefits levels to make work hardly worth the effort for some parents. A family with two children bringing home £44,440 could end up only £4,000 per year better off than a family earning £22,440. If a mother returns to work full time in a minimum wage job, her family may end up only £4 per week better off, thanks to the increased need for childcare and the affect on tax and benefit levels. If the second earner in family takes on longer hours, the family may find themselves bringing home even less than they did before.

In a depressing Guardian article, journalist Yvonne Roberts recounts the experiences of hard-pressed parents such as 30 year-old Louise Sweeney, who works for a charity. At one point she and her partner found themselves found themselves facing childcare costs of £750 per month, which was higher than their mortgage. She and her partner were both students at the time.

There is also Nicola Probert, who is looking at 50 per cent of her income disappearing on childcare costs. She told the paper:

“I’ve got to accept that I’ll only be earning £3-£4 an hour because the other half of my pay will go on childcare….We need the money and I don’t want to be just another person who hasn’t got a job.”

This situation surely cannot be allowed to stagnate any further: there are few things more vital to a happy and balanced family life than the ability to make ends meet. Work long hours and still struggle to make ends meet? That’s a raw deal indeed and it is no wonder so many parents are deciding to give up work altogether.

The government appears to be listening. A spokesman is quoted in the Guardian saying:

“The system needs reform. That is why we set up a commission to look at the affordability of childcare earlier this year. We are looking at best practice in France, Germany, Denmark and the Netherlands where high quality affordable childcare is available for parents and will be setting out proposals in due course.”

But will anything actually happen? Only time will tell.

Photo by JosephB under a Creative Commons licence