Spring Budget 2021: Childcare, gender and Covid-19

Key Points

• The childcare system in England was not fit for purpose and was failing to meet the needs of children, parents, and the economy prior to the onset of the coronavirus pandemic:
  • Access to high-quality education and care has been severely constrained by income, with the result that disadvantaged children who would benefit most cannot access such care.
  • Supply was not keeping pace with demand. Just over half (57%) of local authorities in England had enough childcare for the children whose parents work full-time and just a fifth (22%) had enough for the children of parents working atypical hours.
  • Affordability was a key issue. Childcare costs were around 30% of the income of dual-earner couples on median incomes and around 20% for 1.5 earner couples.
  • Childcare workers are underpaid, with one in eight of early years professionals paid under £5 per hour.
  • Chronic underfunding was threatening the sustainability of providers, particularly in poor areas. In 2019, the cost of providing education and care for under-twos was underfunded by 37%, and for three- and four-year-olds it was underfunded by 20% ¹

  The Covid pandemic, and the government’s response to it, has exacerbated the crisis in early childcare with implications for children, parents, providers and wider society:

  • The lack of formal childcare provision during Covid has had ‘the biggest impact on the poorest in childcare’ with lasting impacts on the attainment gap. ² One in three nursery closures will be in poorer areas. ³
  • 46% of mothers being made redundant said that lack of childcare was a factor in their selection for redundancy and 72% have worked fewer hours and cut their earnings due to lack of childcare. ⁴
  • Continued underfunding, and the decision to stop funding at pre-Covid attendance levels in January 2021, is threatening the survival of providers. 58% of local authorities expect some childcare providers in their area to shut permanently.
  • With Early Years Settings remaining open during the January 2021 lockdown, early childcare workers have been at greater risk of exposure to Covid-19. Yet, early years settings have been excluded from funding available to schools to enable Covid-secure adaptation. A fifth of all early years workers (childminder, early years and preschool workers) are considering leaving the sector due to COVID related stress and anxiety. ⁵

  Urgent action is required to overhaul the childcare system. This requires emergency support for providers now, moving to a supply-side funding model in the medium term, and better training for the workforce and increased support for the most disadvantaged children, who benefit the most from high-quality childcare. In the longer-term, there is a need for a universal and free system, in recognition of childcare as a public service on equal footing with school education.

  [1] Ceeda (2019) Counting the cost in spring 2019 (https://bit.ly/2DD13Dz)

  [2] The Sutton Trust (Apr 2020) Social mobility and Covid-19 (https://bit.ly/3jYmAGe)

  [3] The Sutton Trust (Jul 2020) Covid-19 impacts: Early Years (https://bit.ly/385hm9q)

  [4] Pregnant Then Screwed (2020) Covid, Childcare and Career (https://bit.ly/3jUKu5p)

  [5] Savage, M. (Jan 2021) Covid stress ‘driving hundreds of childcare workers to quit profession’ (https://bit.ly/3tPiOVH)

View and download the full briefing here.