Guardian misses the point about childcare costs


4:24 pm - August 31st 2011

by Paul Cotterill    


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The Guardian is usually pretty good at the detail of welfare policy, so it’s a bit disappointing to see this article on childcare, ‘Childcare costs stopping mothers going to work, says study’.

The article focuses solely on the upfront costs of childcare as an obstacle to employment.

As such, it appears to be based on a single press release from insurance firm Aviva, and the author/editor don’t even seem to have bothered to read the report the press release is advertising.

In that report, the Chief Executive of the Daycare Trust is quoted:

Parents in the UK contribute more towards childcare costs than any other country in Europe, and costs have risen every year for the last ten years.

At Daycare Trust we are particularly concerned about the recent cuts to the childcare element of working tax credits. Too many parents are already making the tough decision to give up their jobs because the extortionate costs of childcare do not make it worth their while. We fear that these tax credits cuts will mean that many more parents could also be priced out of the job market.

That is, while costs may be an issue (though this a simplistic argument), an expert in the field suggests that the government’s cutting of tax credits (from April 2011) is the bigger problem*.

As a social enterprise childcare provider, I have plenty of evidence that Daycare Trust is correct in its assessment.

The main problem for many/most families is NOT the cost of childcare, but the changes in April 2011 to Working Tax Credit (both overall ‘withdrawal rate’ and reduction in proportion of childcare costs covered by childcare element of WTC from 80% to 70%). See here for a quick summary of changes and the TUC site etc. for examples of impacts.

As a social enterprise childcare provider I’m seeing a big change in families’ plans, as they come to terms with these cuts (many people have just received their tax credit settlement and have made decisions in the last month or so).

This has led to significant loss of business for us. The tax credit changes are much more important to people’s decisions than our inflation-related fee increases, which we publicised some time ago.

The Coalition counterproductive austerity measures, not childcare providers, are to blame for the lack of choice many women now face. It’s a pity the Guardian has not said that.


*(To be scrupulously fair, the press release focuses on data from the last year, before the main impact of the WTC changes, but it still seems odd for the Guardian to have left the new developments out, especially when the report highlights them.)

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About the author
Paul Cotterill is a regular contributor, and blogs more regularly at Though Cowards Flinch, an established leftwing blog and emergent think-tank. He currently has fingers in more pies than he has fingers, including disability caselaw, childcare social enterprise, and cricket.
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Story Filed Under: Blog ,Fight the cuts ,Health

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Reader comments


Erm, the issue IS cost.

That the benefits are reducing does not mean that cost is not a factor – it’s the main factor in deciding if a person can afford something or not.

The childcare industry can respond with complaints that tax payers aren’t subsidising their services, or they can cut the cost of the service so that it is affordable to people with less cash to pay for it.

Why should the companies that own childcare facilities be immune to cost-cutting?

I agree with IanVisits that costs are an issue, alongside cuts to financial support for parents.

But on the benefits cuts, I’m pretty sure we ain’t seen nothing yet. WTC subsidy down to 70%? Pfff, that’s likely to be small change compared to what they do with the Universal Credit… Look out new ’10p tax’ issue.

3. Leon Wolfson

@1 – Because making work unviable means, er, people stop working.

“The childcare industry can respond with complaints that tax payers aren’t subsidising their services, or they can cut the cost of the service so that it is affordable to people with less cash to pay for it.”

Childcare is a pretty competitive market, with multiple independent providers in pretty much every suburb or town. I very much doubt there’s lots of scope for cutting costs, otherwise they would have done it already to compete. I believe that’s the basic logic of why private enterprise is efficient. It is totally ludicrous to accuse the childcare providers of greed for failing to absorb the loss of subsidy.

No, the impact of the cut in subsidy will largely be that less childcare is provided. In some cases this will obviously mean parents can’t go out to work. I’d also expect to see more children fending for themselves as parents who can’t afford childcare attempt to pay the rent.

@1: What @3 said, but also note that the childcare industry is subject to Ofsted staff: child ratios (sensible enough ones, though there are some inconsistencies I won’t bore you with) which mean it is simply not possible to cut costs below a certain point while remaining Ofsted compliant.

Lots of childcare providers, especially the smaller, higher quality ones will go out of business in the coming months. Of course that means ex-childcare staff on welfare (in many cases, from whence they came not too long ago) to add to the newly non-ecomically active people who used to/would have used the childcare. Of course that may seem like a very reasonable stage in expansionary fiscal contraction to some. From where I’m sat it looks like rank stupidity, as presumably it does to Nick Clegg, who proudly announced a 61 local authority pilot for free i.e. govt funded childcare for 2+ year olds on free school meals just 9 months ago. Pity he didn’t notice the countervailing cuts coming the other way.

Can somebody explain why taxpayers should susidise (through Family Tax Credit)employers who are unwilling to pay a living wage?
As to competitive childcare costs in my area there is little or no difference between providers – one might think they all drink in the same pub.
Minimum staffing on the minimum wage – where does the profit go?
At the current level, with two children under five in daycare it is barely worth both parents working.

“which mean it is simply not possible to cut costs below a certain point while remaining Ofsted compliant. ”

Quite, so, relax those rules and make child care cheaper.

“Parents in the UK contribute more towards childcare costs than any other country in Europe,”

A very interesting number to know would be what are the costs of childcare across Europe? Befiore any taxpayer subsidy?

Is UK childcare more expensive than other countries? Or not?

Interesting how values change. These discussions no longer mention, even in passing, the question of what ‘day care’ means for the children put in it. Before we were all brainwashed into accepting life on neoliberal capitalist terms, and spades were called spades, the ‘day care industry’ was called baby farming – different labels frame the issue differently.

Before we were all brainwashed into accepting life on neoliberal capitalist terms, and spades were called spades, the ‘day care industry’ was called baby farming – different labels frame the issue differently.

Much better that the little woman stays home and looks after them herself eh? Don’t want them getting ideas above their station after all. Kinder Kirche Kuche and all that.

@9 Your thought, certainly not mine. Mine is that there are a ways of framing this issue. Yours is certainly one, no need to caricature the others. The effect on the children is also one, I just observe how little interest it gets – do you discount it? Maybe you don’t hold with the science?

@10

Are you claiming that ‘science’ shows that daycare damages children? Because academic studies have reached no such conclusion:

“Studies have linked daycare to children’s behavior problems, failed to find a link, or found that daycare is linked to a reduction in such problems. Regarding cognitive development, studies have found negative effects, no significant links, and positive daycare effects. Research has shown that daycare hinders the quality of parent-child relations, does not hinder it, that the adverse effects are small and transitory, or intermittent. Early daycare has been linked to both problems in parenting and to improvements in parenting interactions.”

http://www.psychologytoday.com/blog/insight-therapy/201010/is-non-parental-daycare-bad-children

Whereas the impacts on children of their parents working are generally much more positive:

http://parenthood.library.wisc.edu/Hoffman/Hoffman.html

12. andrew adams

Quite, so, relax those rules and make child care cheaper.

But there is a very good reasons why rules regarding the adult/child ratio exist. Relaxing such rules may make childcare cheaper but could create other problems.

“But there is a very good reasons why rules regarding the adult/child ratio exist. ”

I know there are reasons, but are they good reasons? And are they worth the cost of having the rules?

After all, they were only tightened up what, 6, 7 years ago? Did we have mass deaths in child care before that?

14. Leon Wolfson

Ah yes, can’t have quality childcare for the poor. One-track Tory minds!

7
We could really create cheap child-care, relax all the rules and send them up chimneys.

“We could really create cheap child-care, relax all the rules and send them up chimneys.”

Indeed we could but we found out that that particular solution is a false economy. Treating all that scrotal cancer is expensive.

Now, in a rare attempt to actually be serious.

The complaint is that child care is too expensive. Don’t you think that there’s just a hint of a possibility of a soupcon of a smidgeon of a chance that looking at what makes child care so expensive might be a good idea?

15
@3 has made a serious suggestion but you have ignored it, driving down the cost of labour (we all know this is always your preferred solution) has implications. In the case of child-care, or any other care, it means reducing costs. However, where this is plausable making mass-produced products, it’s not so easy when giving service on a one to one basis. Most child-care is about time spent with children, how can this be reduced without reducing the paid hours spent with the child/children?

“Most child-care is about time spent with children, how can this be reduced without reducing the paid hours spent with the child/children?”

How can we be certain that we’ve the optimal trade off between cost and time right now?

We all know that there is a trade off. The terms of that trade off were changde just a few years ago. Are we certain that we’ve got it right now? Or have we made the adult to children ratio too high and thus made the system too expensive?

19. andrew adams

Tim Worstall,

Fair enough, by all means look at the various regulations which are in place and question whether they could be safely relaxed, but there will always be a point at which the entirely reasonable wish to make childcare cheaper will be overridden by the need to ensure the safety and wellbeing of the children being cared for.

“but there will always be a point at which the entirely reasonable wish to make childcare cheaper will be overridden by the need to ensure the safety and wellbeing of the children being cared for.”

I agree entirely. All I’m really suggesting is that such things should be constantly appraised. That we shouldn’t simply assume that whatever regulations the previous government (and this applies to any government) have put in place are the correct and righteous sets of regs.

This applies to union freedoms, tax levels and structures as much as it does to child care regs.


Reactions: Twitter, blogs
  1. Liberal Conspiracy

    Guardian misses the point about childcare costs http://t.co/BfN0YDn

  2. janet ewan

    Guardian misses the point about childcare costs http://t.co/BfN0YDn

  3. Alex Braithwaite

    Guardian misses the point about childcare costs http://t.co/BfN0YDn

  4. Ryan Hugh Fleming

    Guardian misses the point about childcare costs http://t.co/BfN0YDn

  5. Paul Cotterill

    The Guardian misses the point about childcare http://t.co/OWpZw5B Me at @libcon again (either I'm blogging better or Sunny's short of copy)

  6. Pucci Dellanno

    The Guardian misses the point about childcare http://t.co/OWpZw5B Me at @libcon again (either I'm blogging better or Sunny's short of copy)

  7. IpswichCAB

    The main problem for many/most families is NOT the cost of childcare, but the changes to working tax credit in April ~ http://t.co/4AWy25g

  8. Diane Lawrence

    Guardian misses the point about childcare costs | Liberal Conspiracy http://t.co/BuZiR7B via @libcon





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