Affordable childcare would boost economy, says IPPR
- 21 February 2014
- From the section Business
Up to half a million more mothers could be in work if childcare was cheaper and more flexible, a report has said.
The report, by the Institute for Public Policy Research (IPPR), said government finances would also benefit by more than a billion pounds a year.
Its study said childcare costs have risen by 77% over the past decade, with a part-time nursery place costing more than £100 a week.
The government says it plans to increase support for childcare in 2015.
The IPPR, a left-of-centre think tank, said the number of nurseries offering full-day care has halved since 2008.
As a result, the report said that the UK's record on employing mothers had fallen behind many other countries.
The maternal employment rate for mothers with a youngest child between the age of three and five is 58% in the UK.
The average across the 34 countries in the Organisation for Economic Co-operation and Development (OECD) is 64%.
If the UK were to come into line with the rest of the OECD, an extra 150,000 mothers could be in work, said the report.
If mothers were able to get jobs as freely as all women - which the IPPR says is already the situation in some Nordic countries - 570,000 extra women could be in work.
"Too many mothers are missing from work, in large part because there is a lack of affordable childcare," said Dalia Ben-Galim, an IPPR associate director.
Flexibility of childcare was a particular problem for many mothers, said the report.
Many day-care centres do not provide cover before 8am, or after 6pm.
Even where such care is provided, it is not always covered by the government's childcare voucher system.
The IPPR also said that the current help - 15 hours of free childcare for three and four year-olds - tends to help mothers already in work, but does little to encourage mothers back to work.
The study suggests government finances would also benefit substantially if more mothers went to work, through a combination of increased tax revenues and lower benefit payments.
"We could see fiscal gains of well over a billion pounds; maybe £1.5bn over the coming years," the IPPR's Graeme Cooke told the BBC.
In response, the government said it was already spending £2bn on childcare support, and would be investing an extra £200m under Universal Credit.
Currently, parents have to work at least 16 hours a week to receive the vouchers.
But as Universal Credit is phased in, parents will be able to claim for every hour they work.
This should enable an extra 100,000 families to claim support.
In addition to that, the government has consulted about a new scheme to provide support for up to 20% of a working family's childcare costs. It would be worth up to £1,200 per child.
A Treasury spokeswoman told the BBC that details of the scheme would be announced in due course.
A government statement said: "From 2015, tax-free childcare will benefit up to 2.5 million working families, massively expanding support compared with the current system."