Childcare: Key policy issues

Key Points

• The childcare system in England is not fit for purpose and is failing to meet the needs of parents, children and the economy.
• Affordability is a key issue. Childcare costs are around 30% of the income of dual earner couples on median incomes and around 20% for 1.5 earner couples.
• High-quality childcare has the greatest benefit for disadvantaged children. However, there are significant socio-economic gradients in access to high-quality education and care, with the result that those children who would benefit most not having access to such care.
• Supply is not keeping pace with demand. Fewer than half of local authorities in England (45 per cent) have enough childcare for parents who work full-time.
• Recent policy changes do not address the fundamental supply, affordability and quality issues in the sector.
• Increasing the free entitlement to 30 hours for working parents and the introduction of ‘tax-free’ childcare excludes children from the most disadvantaged households. These regressive changes, with increased support going to better off households, are likely to result in the widening of the achievement gap.
• Urgent action is required to overhaul the childcare system. This requires adequate funding for providers, as well as better training for the workforce and increased support for second earners.

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