Parents working fewer hours could be the answer to spiralling childcare costs | Anna Coote

UK childcare is fiendishly expensive. More than the average mortgage payment, according to new figures from the Family and Childcare Trust. The costs have rocketed in the last decade while most people’s earnings have hardly budged. Bar Switzerland, British parents pay more than their counterparts in any European country: 26.6% of average family incomes, compared with an OECD average of 11.8%.

If this is the problem, what is the answer? Can we find ways to cut these costs? Childcare workers themselves are already paid too little. And this is not the kind of work where you can get “more for less” by increasing efficiency. It’s a labour intensive sector where the quality of care depends on spending more time with each child, not less, and having staff who are well trained and highly valued.

The bitter truth is that good quality childcare is expensive, and the more of it we have, the more it will cost. But in the long term, state investment in quality childcare will save our economy countless millions. It will help children get the best out of their education. It will give them a better chance of finding employment, staying in good health and making the most of their talents. It will enable parents to stay in paid work. It will cut the risk of having to pick up the costs of failure: under-achievement, antisocial behaviour, unemployment and ill health.

As a country, we need to increase the amount we put into our childcare system – using public funds to make quality childcare universally available. That is the recommendation of a new study from the New Economics Foundation, where I am head of social policy.

We start from the premise that the way to boost quality is to improve the status, training and pay of childcare workers. We calculate the costs of paying them as much as primary school teachers. This would mean raising the hourly pay of the average childcare worker – from £6.60 to £20 an hour – and tripling the cost of care per child.

Sound like a stretch too far for a country unaccustomed to early intervention spending? There’s another way we could bring down the bill – but it means rethinking how we spend and value our time. Working long hours can be bad for parents and for children. Where women opt for part-time jobs while their children are young, they tend to get trapped in low-paid, low-status work for the rest of their careers.

But reducing the average hours worked by both parents – from 40 to 30 hours a week would – help break down gender inequalities. It would release more time for childcare at home – and so reduce the costs of paid-for care. Our calculations show that the cost per child of high-quality care (paying workers at the same level as primary school teachers) would be cut from £18,000 to £10,000 a year. That reduces the call on public funds and brings other advantages: more time for children and parents to spend together; less work-related stress and anxiety; and more time to live sustainably.

A familiar argument against a shorter working week is that people can’t afford to house and feed their families unless they work 40 hours or more. But that’s an argument for raising hourly rates of pay, not for making people work longer hours.

Raising pay for childcare workers is a good start. To set the ball rolling in the right direction, we have looked at what it would cost to pay childcare workers the Living Wage, adjusted for a 30-hour week, so they get £10.33 an hour, instead of the current £6.60. Under this scenario, with parents also working a 30-hour week, we find that the cost of care per child is actually lower than under current arrangements – reduced from £6,930 to £5,111 a year.

So if we are trying to improve childcare and keep it affordable for taxpayers as well as for parents, it’s well worth considering the impact of a shorter working week.

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Parents working fewer hours could be the answer to spiralling childcare costs | Anna Coote
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