Limited and costly childcare options hurt low-income families most. Why are we still behind the curve on this?

Childcare issues in the UK are thought to be keeping around 1.7 million women out of paid work, or preventing them from taking on more of it.

And, like many of the fissures exposed by the pandemic, it’s leaving those who were already less advantaged even further behind the most privileged. Only in this case, we’re talking about the very youngest members of our society.

The issues will be familiar – affordability, availability and, sometimes, quality. And, according to Mumsnet, a significant proportion of families (at least one in three), pay more for childcare than they do for rent. This rises to 42 per cent of those on Universal Credit and 47 per cent of those from a Black ethnic background. (Perhaps most shocking of all, Mumsnet found that this is even true for 38 per cent of those who work full-time.)

I’ve fallen into rent arrears because once I’ve paid the nursery I can’t afford the full rent

Ayo, mother of one from London

At present, all three and four-year-olds (and some two-year-olds) qualify for at least ten hours of free childcare per week. This varies hugely across the country, with children in Scotland entitled to 22 hours for example. What’s more, some children will qualify for their free childcare year-round, while others will receive it only during term time.

But with so many parents (not solely mothers, of course) underemployed for childcare reasons, the economic cost to the country is huge. The Women’s Budget Group puts the figure at more than £28 billion every year, and yet the Budget in spring made no extra provision for the childcare sector or the families who depend on it.

Upfront problems

Universal Credit claimants who are in paid work can claim back 85 per cent of childcare costs (up to £646 per month for one child and £1,108 for two or more). But nursery fees are typically paid in advance while UC is paid in arrears. That presents an immediate problem for anyone about to move into employment.

Save the Children has been campaigning on this issue for years. Ayo, a mother from London, told the charity she had to use foodbanks to feed her two-year-old daughter after borrowing £1,590 for childcare and a nursery deposit of £200.

“I’ve gone into quite a bit of debt to pay for my daughter’s nursery fees,” she said. “I’ve had to use my credit card to pay for them a few times, and I’ve fallen into rent arrears because once I’ve paid the nursery I can’t afford the full rent.

“I’ve also had to cut down on essentials like groceries. I’ve gone down to one meal a day, so I usually only have lunch and everything else we have in the house is for my daughter.

“The system doesn’t work. The upfront fees are deterring a lot of women from going back to work, because where are they going to get that money from? You don’t find that kind of money down the back of the sofa.”

Nurseries and other childcare providers have little choice but to charge upfront in order to meet their own costs. Parents have to pay, submit receipts then wait to be reimbursed under UC. When we’re talking about hundreds of pounds a month it’s easy to see why this is such a barrier to parents moving into work or upping their hours. And if there are two parents or carers in the household, both usually have to be in paid work before the allowance applies. 

Although there is some help with costs for parents on UC as they look for work, it can be discretionary and as such patchy. So if parents are facing barriers to accepting a new job or increased hours, how does this square with the stated aim of Universal Credit? That is, to help more people into work?

Lack of access to high-quality childcare can leave disadvantaged children behind before they have even started school

Women’s Budget Group

Single mother Nichola Salvato got into more than £1,000 of debt when she tried to take on a new job. She borrowed from family and doorstep lenders, and even cut the hours of her welfare advisor role, to try to meet her childcare costs. She took the government to court and won – the High Court said forcing her to reclaim childcare costs discriminated against mothers who want to work. The court also found it made them more dependent on benefits if they felt they had to cut their hours to afford childcare.

But a subsequent appeal by the DWP, on the grounds that a ‘proof of payment’ model was less vulnerable to fraud, was successful in October last year. At the time, Salvato said: “So many of us single parents want to work but find the upfront childcare costs through Universal Credit an impossible barrier, meanwhile the government continues to support better-off families with their childcare costs in advance via the tax-free childcare system.”

The poverty penalty

While low-income families are most likely to face these barriers, the knock-on effects for the children of these households are disproportionately high. Not only do their parents miss out on opportunities to earn more, but it’s children from low-income families who stand to gain most from the childcare environment.

In fact, Ellen Broomé, managing director of Coram Family and Childcare, a charity that campaigns for better early-years provision, has described high-quality childcare as “key social infrastructure”. She describes how it narrows the gap between children of poorer families and more affluent households.

The Women’s Budget Group said their own findings showed: “Lack of access to high-quality childcare can leave disadvantaged children behind before they have even started school.”

There are many reasons for this. The stress of parents on low-incomes without the respite of childcare rubs off on to children, while overcrowded housing can limit a child’s ability to play and tight family budgets restrict outings.

Good-quality childcare helps all children arrive at school socially and emotionally ready, narrowing the gap caused by their life circumstances. And good-quality childcare that is also free or affordable would allow parents to begin lifting their family out of poverty and afford some of the life-enriching activities that other children enjoy.

So why such gaps in provision when childcare is clearly such a vital part of getting more people into work? Part of the reason could be that policymakers make broad strokes decisions that miss the complexity of families’ situations. For example, few new employees have the luxury of choosing their days and hours – even in a jobseeker’s market. Fifteen hours of paid-for childcare can be hugely helpful, but marrying available childcare with the needs of a job sometimes just isn’t possible.

And clearly, childcare isn’t yet widely seen as infrastructure as Ellen Broomé would like. Proportionately, putting money into childcare will have the greatest benefit for the children of low-income households.

Investing more now isn’t just the right thing to do, it’s a proven way to improve outcomes for many of the most vulnerable.

Image: romrodinka / Bigstock