Universal childcare a £13billion boost to economy

Universally accessible and affordable childcare would create a ‘double dividend’ for UK economy, say IPPR and Save the Children in new report.

government budget childcare


A new report on universal childcare for children up to the age of 11 has found it would boost the UK economy up to £13 billion a year.

The joint study by the IPPR and Save the Children found it would also profoundly help the lowest-income families, benefitting 1.6million children financially.

Rachel Statham, IPPR associate director and lead author of the report, said: “A universal and affordable childcare guarantee from ages 0 to 11 would deliver a step change for millions of young children and their families, giving more children access to high quality early years education, while helping to grow the economy, and grow families’ incomes.”

The report sets out detailed changes that would be needed to deliver the promise of universally affordable and accessible childcare that millions of parents badly want, spanning 10-plus years from the end of parental leave.

These would range from expanding free childcare hours for the under-twos to introducing wraparound care from 8am to 6pm for school age children, including outside term time, and should be introduced in stages, the report says.

The total cost of this investment would eventually be £17.8 billion a year, partially offset by the £8 billion a year direct gain for the public purse from additional parental working, and a further £2.1 billion savings from closing existing schemes that would no longer be needed. IPPR suggests the difference could be funded through new tax measures. Costs are likely to fall over the next decade as primary school pupil numbers are expected to decline.

It would mean some 700,000 households with 1.6 million children could see their incomes rise, with the largest gains flowing to households on the lowest incomes. At the same time families would save between £620 and £6,175 a year on the eye-watering current cost of childcare, depending on their circumstances.

Investing in more childcare provision in England would also create an estimated 130,000 additional jobs in early years education and care.

Sam Freedman, senior fellow at the Institute for Government and a senior adviser to Ark Schools, co-author of the report, said: “A Universal Childcare Guarantee would be a huge help to families, but it would need to be accompanied by an overhaul of the market to ensure the funding went on better quality provision and higher wages rather than private equity profits.”

Becca Lyon, head of child poverty at Save the Children, added: “If made a reality, a Universal Childcare Guarantee would be life-changing for families – creating an easy-to-use childcare payment system for all, dramatically cutting childcare costs, ensuring the nurseries their children love are properly funded and providing free breakfast and after-school clubs when children are older. We owe it to children to give them the very best start in life and that begins by transforming our broken childcare system.”

Read more:

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Why Zurich UK are leading on enhanced paternity leave

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