Read: Purpose Coalition renews its call for the Chancellor to provide urgent help for childcare in budget
With new figures showing that some parents are spending up to 80% of their take home pay on childcare, and local authorities reporting a sharp drop in childcare availability, the Purpose Coalition has renewed its call to the Chancellor to include childcare reform in next week’s budget as a key element in tackling the cost-of-living crisis and building financial resilience.
An annual survey from children’s charity, Coram, reveals the challenges being faced by childcare providers across the country. Only half of local areas in England report sufficient childcare for children under two, a decrease of seven per cent from 2022, and under half are reporting enough childcare for parents working full-time, a decrease of 11.5% from last year. The figures show that it is the most disadvantaged children who are most at risk of missing out, with decreases in childcare for children with disabilities, a reduction in the number of funded early education entitlement places on offer and a drop in the proportion of local areas who have enough places for the universal 15-hour early education entitlement for three and four-year-olds. There are also differences across the country, with significantly higher costs in London.
The Purpose Coalition’s Cost-of-Living Taskforce recently published a Cost-of-Living Action Plan which looked at ways the Government, public institutions and the private sector could work together to address the challenges of the cost-of-living crisis in the short-term while also building longer-term financial resilience for individuals and for the country that will protect them against future financial shocks. It proposed five recommendations, including one on increasing financial support for childcare - specifically that the Government should make childcare costs deductible for children over three months and increase the ceiling for eligibility from £100,000 to £150,000.
Author of the report and chair of the Purpose Business Coalition, Lord Walney said: “These new figures are further evidence of the urgent need to reform the childcare system in this country. The lack of affordable and comprehensive childcare is one of the biggest barriers to a fully-functioning workforce and the growth that the economy needs to recover from the pandemic and from the cost-of-living crisis. It is proving to be a very real barrier to parents, usually women, being able to return to the workplace. At the moment, provision is too expensive and too fragmentary. Parents are forced to rely on piecemeal and unstructured arrangements which not only impact negatively on parents’ productivity, working hours and pay but also don’t provide a sound basis for children’s crucial early development. This new research also highlights that it is those families who need the most help who are being hit hardest.
“The Cost-of-Living Taskforce’s Action Plan was developed with Purpose Coalition partners who recognise the importance of supporting their colleagues, customers and communities through the current cost-of-living pressures. They also understand that longer-term solutions that will increase financial resilience are key to economic prosperity and a bold childcare strategy with increased financial support is a vital part of that.”
The Cost-of-Living Action Plan included four further recommendations which identified key areas where government and private sector interventions could make a significant difference – the introduction of a government backed rainy-day savings scheme into which employers would automatically enrol workers, the transformation of access to cost-of-living support by overhauling the government’s inadequate information systems; tackling the mental health pressures that higher cost-of-living has inflicted on students and a Royal Commission on Personal Energy Security which would be tasked with examining the consequences of giving households the right to an unbroken supply of gas and electricity, making it illegal to cut off someone’s supply.
