WBG urges the Labour Party not to lose ambition on childcare

Responding to reports that the Labour Party has ruled out universal childcare, Dr Mary-Ann Stephenson, Director of the Women’s Budget Group said:

“We had welcomed the Labour Party’s commitment to reforming early education and childcare provision in England and to prioritising those who need support the most. They must not now lose their ambition for transformative changes that could provide the bedrock of a healthier and more equal country and economy. 

“The Conservative Government’s current and planned expansion of childcare for working parents excludes many of the children who would benefit the most from early education, and maintains a complicated system that parents and providers struggle to make work. Labour is right to be concerned about ensuring those who can least afford childcare benefit most and reforms to the system must include lower income parents whose children miss out on the current schemes because they fall between the cracks of a piecemeal system.

“Neither the Government nor the opposition can achieve their aims of boosting recruitment to the NHS and social care, largely female sectors facing huge workforce challenges, without making childcare available to those entering education and training for those roles; these parents are currently excluded from the Government’s planned expansion.

“Neither can they meet their aims of tackling wider economic inactivity and low growth. The OBR judged that the Government’s childcare expansion announced in the Spring Budget would have a greater impact on GDP than anything else in the budget^[1], but the underfunding of current plans put those gains at risk leaving parents struggling to find places as nurseries collapse^[2]. Reforms must provide greater financial stability and coherence – we cannot lose sight of the prize from significant investment in the early years.

“We would urge the Labour Party to undertake an independent review of the current system before confirming their plans, consulting with the early years sector, parents and early years professionals. We need  a comprehensive approach to rescue a system on the brink of collapse; recruit and retain a workforce that is currently undervalued and underpaid; and build out to a supply-side model that works for children, parents, gender equality and the economy.

Early education and childcare is an investment in social infrastructure in the same way as the Green Prosperity Fund is an investment in much needed capital projects for a green transition. Moreover, the jobs created in the early years sector are also low-carbon green jobs.

“WBG modelling for universal free childcare would have an initial investment cost of 0.7% of GDP (£18bn in 2022 levels), but 61% of that would be recouped through positive impacts on the wider economy^[3].

“It would take our early education and childcare sector in line with Nordic countries which have a higher female participation rate, better salaries and high quality of education and care. Such an investment would increase employment (directly and indirectly in the wider economy) and therefore generate increased tax revenues and reduced social security spending, which would pay for the majority of the investment.

“Whether funded through more progressive taxation or a combination of tax and borrowing, universal free early education and childcare is an investment in the country, the economy and our future.”

About the Women’s Budget Group

The UK Women’s Budget Group (WBG) is the UK’s gender equality think tank, providing evidence and analysis on women’s economic position and proposing policy alternatives for a gender-equal economy. We act as a link between academia, the women’s voluntary sector and progressive economic think tanks.

For more information or further comment, contact

erin.mansell@wbg.org.uk / press@wbg.org.uk / 07799116631

References

^[1] https://obr.uk/efo/economic-and-fiscal-outlook-march-2023/

^[2]https://wbg.org.uk/media/press-releases/wbg-finds-government-funding-for-early-education-and-childcare-falls-short-by-5-2bn/

^[3] https://wbg.org.uk/media/press-releases/wbg-finds-government-funding-for-early-education-and-childcare-falls-short-by-5-2bn/