The Chancellor has found himself a treasure chest: childcare. In his quest for full employment, it’s seen as crucial for boosting maternal employment. Helping parents with punishingly high childcare costs appeals to and supports those on modest incomes – the so-called ‘blue-collar’ voters - that Conservatives still need to woo.
Nothing quite encapsulates the modernisation of the Tory party as its growing enthusiasm for childcare. The Conservatives no longer want to be seen simply as the flag-waver for a traditional family setup. Instead, they aspire to be the party for working people. No yearning for yesteryear, but enthusiastically supporting two-earner couples that are increasingly the norm, out of choice and necessity.
Indeed, despite fiscal retrenchment, the Chancellor has dished out generous childcare subsidies, for parents on nearly all incomes. Most recipients of the new Universal Credit will have 85 per cent of their childcare costs paid for by government, higher than the 80 per cent provided under the tax credit system.
Working parents not on Universal Credit earning up to £150,000 a year with children under the age of five will, in autumn, now access Tax-Free childcare, paying for 20 per cent of their annual childcare costs of up to £10,000. This is a superior scheme to its predecessor introduced by the last Labour government - employer-supporter childcare vouchers - because the financial support available is more generous in most instances and is less arbitrary since it is not dependent on employer participation.
Finally, the Tory manifesto promised to spend billions extending the Early Years Free Entitlement, so all parents of three and four year olds will now be able to access free childcare for up to 30 hours per week. This is up from the current 15 hours per week and more generous than the 25 hours per week proposed in the Labour Manifesto.
Hold your horses, however. Now the election is over, Conservatives can disengage from the arms race with Labour to attract working women, and reflect on what matters most from increased participation in childcare. Yes, it helps parents, although it has been found that subsiding childcare only has a modest impact on maternal employment rates. But the most important beneficiaries are children. Formal childcare, as delivered by nurseries and childminders, has the potential to improve educational attainment significantly.
The EPPSE longitudinal study, which has tracked more than 3,000 children since 1997, has shown that those who participate in high-quality formal childcare, especially those from the poorest backgrounds, achieve better results in later tests. Recent evidence has shown that participation in high-quality childcare is also a significant factor associated with better AS-level results.
But for formal childcare to have these impressive effects, it has to be of a good quality. Staff with higher qualifications, especially at degree level, are central to this. Unfortunately British childcare – as the recent government-commissioned Nutbrown Review found – generally remains a low-status, low-paid profession, although this is improving.
While in coalition, the Conservatives did propose a policy that would encourage nurseries to employ higher qualified staff: they suggested that staff-to-child ratios, set at an arbitrary and strict level in the UK, could be relaxed if nurseries recruited higher qualified staff. A review of the international evidence showed that staff qualifications strongly impacts quality, and that the exact class size – within a reasonable range – has no effect. In other words, this was a sensible policy that the Liberal Democrats were wrong to oppose. To try and improve childcare staff quality, the government has also backed the extension of Teach First into early years settings.
But much more needs to be done. Its new Childcare Bill shows this government is currently directing resources to try and achieve the short-term gain of increased parental employment. Really, it should be redirecting and investing its resources into the long-term goal of a better-educated workforce. It should see formal childcare as vital pre-school education; as should all parents in fact, working or not.
So, the Free Entitlement should not be extended to 30 hours a week. UK research shows children don’t receive any further educational benefit for being in formal childcare for longer than 15 hours per week. Leading early years academics have urged prioritising public funds to boost the quality of childcare rather than more free hours for parents. The government should do this.
At the same time, to help parents with the high costs of childcare, it should enable them to access government-backed, income-contingent loans to pay for childcare. Like student loans, but designed in a fiscally neutral way. Such an approach to childcare would truly support a long-term economic plan.
Ryan Shorthouse is the founder and director of the independent think tank Bright Blue.