Families spend third of income on childcare

children, family law

Many families now spend as much as a third of their income on childcare, a new report suggests.

In a newly published document, free market think tank the Institute of Economic Affairs (IEA) has claimed that the government’s free childcare policy has done more harm than good.

The IEA’s report states that the government has become increasingly involved in this area. Along with a subsidy for 15 hours of free childcare per week, which will become 30 hours in September, various regulations have been put in place for providers. These include set staff-child ratios, qualification and training requirements for staff and how often the facilities are inspected by Ofsted.  These regulations have increased costs for those who provide childcare so a lot of “lower-cost providers … have been driven out of the sector” according to the report.

These regulations have led to high out-of-pocket costs for parents despite the levels of subsidy, the report has found. This is because any time above the subsidised 15 hours becomes much more expensive to cover the providers’ costs. As a result, childcare in the UK is among the most expensive in the developed world and “those who need the most help don’t receive it, while many affluent parents are generously subsidised” the IEA insists.

Report co-author Len Shackleton is an Editorial and Research Fellow at the IEA. He claimed that the government’s childcare policy has “resulted in both British families and taxpayers bearing a heavy burden of expensive provision”. As “many families are facing a cost of living crisis, it is important the government rethinks its involvement in childcare” he said, suggesting that “focusing public funds on those who need it, rather than subsidising the well-off, would be a good way to start”.

Last month, the Pre-School Learning Alliance claimed the government was “heading for a childcare capacity crisis”, having underestimated the demand for the free service.

Read the full IEA report here.

Photo by Steven Depolo via Flickr under a Creative Commons licence.

Stowe Family Law Web Team

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1 comment

Andrew - February 7, 2017 at 12:53pm

The best is the enemy of the good, isn’t it?

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