The Centre for Progressive Policy (CPP) says that as a country we are losing at least £9.4bn in additional earnings each year due to a lack of suitable childcare preventing mums from working the hours they would like.
It estimates, in total, that the UK is losing 1 per cent of GDP, upwards of £27bn, because of this.
CPP is now calling on the Government to recognise childcare as infrastructure in national spending frameworks so it can borrow to invest in provision.
The think tank’s new report, ‘Growing pains: the economic costs of a failing childcare system’, includes findings from a survey of 2,545 mothers with at least one child aged ten or under. The survey focused exclusively on women as it is believed they are the ones disproportionately affected by the availability of childcare.
It reveals:
- Over half of respondents (54 per cent – equivalent to around 3 million) said they had struggled to find suitable childcare since becoming a parent.
- 27 per cent, equivalent to around 1.5 million mums, said they would like to work more hours if they had access to ‘suitable’ childcare.
- Based on the survey results, the CPP estimates that 540,000 mums have been prevented from entering paid work due to a lack of ‘suitable’ childcare, 880,000 have reduced their working hours, while 470,000 have quit their jobs.
'Damaging women's careers'
The report goes on to warn that a ‘lack of suitable childcare is damaging women’s careers and curbing opportunities to earn during a cost-of-living crisis.’
Based upon survey data, the CPP estimates that a lack of ‘suitable’ childcare has prevented almost a million mothers from taking a job with a higher salary, with an average foregone salary increase of £12,000.
Survey responses also highlighted the support for childcare reform, with nearly 70 per cent wanting funded childcare to be extended to all year round, rather than term time only. Other reforms popular among mums included more financial support for parents of children up to the age of two and more before and after-school clubs.
Removing staff:child ratios in childcare settings was a proposal that was overwhelmingly rejected by survey respondents.
Nearly 60 per cent of mums that took part in the survey said they thought local councils should be the primary providers of childcare.
CPP is now calling on the Government to recognise childcare as infrastructure in national spending frameworks, so governments can borrow to invest in it. The think tank says that spending on childcare is ‘akin to physical infrastructure like rail and roads, helping to drive output and productivity gains in the short, medium and long term.’
'Childcare is infrastructure'.
Rosie Fodgen, head of research & analysis at CPP, said, ‘The high cost of childcare is holding back our economy. Parents want to work more, but to do so they need more wraparound care and lower hourly costs without compromising on quality. Without it, many are left with no option but to forgo promotion, reduce their hours or stop work entirely at a time when the number of people struggling to meet the basic cost of living across the country is rising.
‘Childcare is infrastructure: it allows people to go to work, to access better skills and earnings, and to contribute to the economy. Treating it as such would allow borrowing for investment, just like for other forms of infrastructure like rail. We will not transform our piecemeal childcare system overnight, but any credible strategy for growth and labour market participation must recognise and act on the clear economic gains of investing in childcare.’
The National Day Nurseries Association (NDNA) said the report shows ‘how as a country we are selling our children and our economy short.’
Chief executive Purnima Tanuku explained, ‘The Government have a chance to fix this policy, support providers who are delivering high-quality early education and care to our youngest children and help get the country working again. We need to see action from the Chancellor in this budget to realise this potential.’
A Department for Education spokesperson said, 'We recognise that families and early years providers across the country are facing financial pressures. That's why we have spent more than £20bn over the past five years to support families with the cost of childcare.
'This Government has doubled the entitlement for working parents of three and four-year-olds to 30 hours and introduced 15 free hours a week for disadvantaged two-year-olds.
'On top of this, working parents on universal credit may be eligible for help with up to 85 per cent of their childcare costs through Universal Credit to support with the costs of childcare.'
- The report is available here