Taxpayers money spent on childcare is not wasted its an investment

There are more women working now in Britain than ever before: two thirds of us, or 14.4 million. That’s a rise of 368,000 in the last year, and of 771,000 since the start of the decade. Britain’s female employment rate is now well above the average in major industrialised nations. The Treasury is delighted with its figures. And George Osborne is thrilled too. I’m thrilled as well, not least because most of the new posts are full-time and in highly skilled occupations.

Not everyone is happy, though. The Institute for Fiscal Studies (IFS) reckons that whatever the reasons for the surge in female employment, state help with pre-school childcare in England and Wales is making only a marginal and expensive difference. Research conducted by the thinktank, in partnership with the universities of Surrey and Essex, has concluded that the policy, introduced in 1998, costs approaching £66,000 for each person helped into work. Which does seem quite steep. Thankfully, however, these figures are so anal and literal that they’re almost without meaning at all.

The argument is that only one in six children with free places wouldn’t have been in pre-school had free places not existed. Of these one in six, only one in four of their mothers is working. That number, says the IFS, is 12,000. So they divide the full annual cost of the scheme – £800m – by 12,000, to come up with the £66,000. In fact, it costs no more to provide places for these children than it does to provide places for the children of mothers who aren’t working, or for the children of mothers who would have been working anyway.

What the IFS is really arguing is that free pre-school should only be given to mothers who are working, but who certainly couldn’t work without it. Everything else, examining matters from the thinktank’s point of view, is just the state showering people with free money.

There’s one respect in which the IFS’s way of looking at things makes a tiny bit of sense. The free pre-school provision is for 15 hours a week for 38 weeks of the year. Very few people can find suitable employment when relying on that provision alone. This explains why the impact on non-working mothers is not seismic (and also why Labour wants to increase it to 25 hours a week).

The truth is that the current provision does work best for parents who have employment anyway and have childcare arrangements already in place. It can only ever be supplementary to other provision, even if that other provision is quite informal, like knowing another parent at the nursery with whom you can share drop-offs and pick-ups, or relying on other household members to help plug the gaps.

Those surveyed may have told the IFS that they’d be working anyway, even without the free provision. But that doesn’t mean that they don’t greatly appreciate it. Plenty of women work while they have small children, even though it doesn’t make any short-term financial sense at all. Why? Because they know that the alternative – taking a break from work – would almost certainly blow a long-term hole in their career and therefore in their future financial prospects.

Those who are accessing the free provision, but not working? This does not mean that some free childcare won’t help these women into work in the future. Looking after a baby and toddler is intense and demanding. The idea that a couple of hours of childcare a day is economically wasted on you because you haven’t bounded straight off to work is risible.

It’s easy, when you’re looking after a baby, to start feeling that your life is not your own. Taking a small amount of time to work out who you now are, and what you want to do next, is hardly a crime. Nor is finding that, for the first time in three years, you have time to paint the living room or pluck your eyebrows. Having re-established some control in their lives and some confidence in themselves, these parents may yet sally forth into the employment market in much more positive shape.

The decision to have children never makes financial sense, not on a personal level. It certainly does on a societal level, though. Populations in decline mean economies in decline, and people becoming elderly without young people supporting their needs. That’s the kind of situation that we’re chugging into at the moment, and no one reckons it’s going to be a picnic.

Osborne is happy to see more women in work because he knows that women in work have been making a huge contribution to economic growth in Britain for half a century. Much of the £800m that the IFS would have us believe is squandered has in fact been spent on letting all mothers know that the state respects and supports their wish to work for a living, enough to offer practical and financial support in the early years.

That’s not because the state is a feminist. It’s because the state is a pragmatist. The IFS is focused on the idea that taxpayers’ money is being wasted on childcare. What the thinktank doesn’t seem to understand is that this wise and sensible investment is actually generating taxpayers, now and for the future.

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Taxpayers money spent on childcare is not wasted its an investment
childcare – Yahoo News Search Results
childcare – Yahoo News Search Results

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