Examining the government’s “smoke and mirrors” announcement on childcare
Currently, childcare support is only available if you work 16 hours or more, but the Government is removing the minimum hours rule so that all families receiving Universal Credit will be eligible for financial help. This means that families on low incomes will receive more support to keep them in work.
As now families will be able to recover childcare costs at 70 per cent – up to £175 for one child or £300 for two or more children per week. The money will be paid through Universal Credit from 2013 and will mean that around 80,000 more families with children will be able to work the hours they choose.
Let’s set aside quickly two more obvious matters already widely commented upon - first, that this support doesn’t start for another 18 months, and second, that this move does nothing for those working/wanting to work 16 hours or more per week, who suffered big cuts in April 2011 when 500,000 people, mostly women, lost an average £436 a year, and up to £1,300 a year”.
What other commenters don’t appear to have noticed is that for the most women who work or want to work for less than 16 hours per week, all of that childcare is already free, and has been for some time now.
Yes, that’s right. The government is offering to pay up to 70% of childcare costs on hours of childcare which, for most parents, are 100% free anyway.
This 100% free care comes under the longstanding Nursery Education Grant programme, under which all children 3 years and over get 15 hours per week free provision. The programme is also already being extended, plans, to provide the same free care for children 2 years and over.
So in fact the only group who will benefit properly under the new scheme are parents of 0-2 year old children. This would be fine, except that we already know that the number of parents seeking care for this younger age group is proportionately much smaller than for the 2-4 year age group. (For example, the most recent Lancashire Childcare Sufficiency Assessment (p.40) found only 4,344 childcare places for 0-2 year olds, compared with 24, 206 places for 2-4 year olds.)
The 100% free care does currently cover only 38 weeks of the year (effectively a 50 week year because pretty well all childcare ceases for two weeks over Christmas). It might be argued therefore that the new 70% support announced could help with holiday care costs, but surely if this had been the intention the government could simply have topped up funding specifically around holiday provision.
Similarly, there might be an argument that this move is in some way targeted at parents of school-age children so that they can work outside of school hours (for example, in a 8am to 11am job which means they need to use a breakfast club), but there would be much more effective ways of doing this (not least given the lack of breakfast clubs in most schools).
All in all, while there will be some benefit around the margins, it’s difficult to see this move by the government as anything other than a short-term panic measure, whether or not backed by some cunning plan to ‘unspend’ some of the £300 million once everything settles down.
DWP officials MUST surely understand that the government is largely announcing 70% support for a group already being 100% supported, although there may be some confusion caused by the fact that DWP implements the former, while the Department for Education is responsible for the Nursery Education Grant system.
Whatever the case, it does look a little like Labour’s initial reaction – that this is nothing more than a ‘smoke and mirrors’ announcement – has some justification, and there must be some suspicion about whether this £300 million will be effectively spent or later sucked into existing budgets.
And certainly, the Spectator’s view that the announcement “owes more to politics than policy” rings true, when the detail of the actual policy is examined in the context of existing arrangements.