The Dutch system of early education and childcare differs from that in England in some important respects. For one, early education and childcare are provided and funded separately. Schools offer part-time, publicly funded nursery education to children from age four. The start of compulsory schooling is at five. Registered childcare, provided by private for-profit and not-for-profit daycare centres or by childminders, is used by some 40 per cent of children under four.
A thriving playgroup sector and out-of-school care also figure within the Dutch system. While maternal employment rates are high, part-time use of childcare is the norm as most mothers work part time.
The 2005 Childcare Act radically changed the way this system is funded. Aiming to encourage employment by securing sufficient good-quality childcare for working parents, it replaced a supply-side funding system, operated by local government, with a demand-led childcare market.
Costs are now shared between central government, employers and parents. Via income-related childcare tax credits and employer childcare contributions, compulsory since 2007, parents receive two-thirds of their total registered childcare costs.
There is an upper limit on the hourly childcare costs funded under the tax credit system. However, the upper income level beyond which parents no longer qualify for support has been raised annually since 2005.
Three of the Dutch Act's provisions are particularly interesting:
- for dual-earner families, both employers share the employer contribution
- informal non-parental carers, such as grandparents, can register as childminders without any obligation to care for children other than those from their own families, and
- childcare provision has been substantially deregulated, although local government must ensure compliance with basic quality criteria.
Some factors suggest this new childcare market has been a resounding success. Parental childcare costs are demonstrably lower, there has been an increase in overall uptake of registered childcare, and registered childminder numbers have risen by more than 200 per cent.
However, unintended consequences of the Act are emerging.
CHILDCARE OVERSPEND
The 40 per cent rise in the uptake of childcare tax credits has exceeded the Dutch government's predictions and hence its annual childcare budgets. If present trends continue, by 2011 the current childcare overspend will almost double, according to official calculations.
While registered childcare use has gone up, so have waiting lists, but there is as yet no evidence of a correspondingly large rise in maternal employment rates.
Last month the Dutch government used its 2009 Budget statement to announce changes to the Act. Designed to rebalance the financial responsibilities for childcare provision and secure the system's long-term viability, these measures focus primarily on the reorganisation of childminding.
While they will not be fully implemented until 2011, interim measures include a freeze of tax credit levels and an investigation by the Dutch tax authorities and its benefits agency into possible fraudulent use of the childcare tax credit system. Childminding brokerage bureaux, which link parents with providers and which recently played a significant role in 'formalising' informal care, will be phased out.
From 2011, grandparents will no longer be able to register as childminders unless they agree to conditions which include a willingness to care for a certain number of children, not all from their own family, and/or for certain specified hours. Limits will be set on the number of informal care hours per child for which parents can claim.
CONSERVATIVE POLICY
These developments contain lessons for anyone proposing to fund informal care in Britain.
The Centre for Social Justice - the think-tank chaired by former Conservative party leader Iain Duncan Smith - published Breakthrough Britain and The Next Generation, which both recommended that childcare tax credits be used to fund informal care, albeit at a 20 per cent lower rate than that provided for registered care. Estimates for its cost to the Exchequer were put at £1 billion annually.
The Dutch experience suggests that using childcare tax credit to fund informal care not only is difficult to monitor, but uptake may reach unprecedented levels.
Parents may be disappointed, though, that in The Netherlands an opportunity to formally recognise the invaluable role played by informal care in parents' and children's lives has backfired so spectacularly.
Eva Lloyd is a reader in early childhood, University of East London, and co-director of the International Centre for the Study of the Mixed Economy of Childcare
Further information
www.centreforsocialjustice.org.uk