The government today announced ambitious new plans to improve the cost, choice and availability of childcare that will benefit hundreds of thousands of parents across the country.
The UK has some of the best quality childcare facilities in the world with 96% of the early years institutions being judged by Ofsted as good or outstanding, but it is also one of the biggest costs facing working families today. This means that some families, especially women, feel that they are unable to return to the workplace after giving birth due to the high cost of placing their child in paid care.
With the cost of living continuing to rise, the government is committed to doing everything in its power to support families with their finances, while keeping people in high-wage, secure jobs that help grow the economy. New plans are being unveiled today to ensure that high-quality and affordable childcare is accessible to all.
To reduce costs for providers and parents, a new consultation on regulatory changes for childcare will look at increasing the number of children that each staff member can care for in early-year settings.
It would propose changing staff-to-child ratios from 1: 4 to 1: 5 for 2-year-olds, giving providers more flexibility in how they run their businesses, while maintaining safety and quality of care. Child care for children from 0 to 2 years is the most expensive for providers to provide, largely given the need for higher levels of supervision.
It could eventually reduce the cost of this form of childcare by up to 15%, or up to £ 40 a week for a family paying £ 265 a week for childcare for their 2-year-old, if providers accept the changes and pass all the savings on parents.
Education Secretary Nadhim Zahawi said:
Every child deserves a good start in life and that means giving families the support they need.
Child care is an integral part of our economy, and these reforms prove once again that this government is on the side of working families. I am very grateful for the thousands of dedicated professionals who provide daily care and education to our youngest children, and therefore I am determined to support them by giving them greater flexibility in how they manage their services.
This in turn will support thousands of families across the country, help develop children’s skills, while also supporting parents in work.
The government will also increase choice and affordability for parents by taking action to open up the childcare market.
While in early years institutions such as nurseries were the most popular option for families, babysitters were generally the most affordable and flexible form of childcare. While the average cost of a 2-year-old attending a nursery for 50 hours a week in England is £ 265 a week, that compares to £ 236 with a babysitter. The government will support more people to become babysitters by:
- reducing the cost of becoming a babysitter through financial support
- which allows babysitters to spend more of their time from a wider range of places – for example a local community center or town hall rather than their own home
- to give babysitters greater flexibility within the relationships when caring for their own children or siblings of other children
- with Ofsted to reduce childcare inspections
- slimming down the babysitter specific early years foundation phase, reducing the framework by one-third to ensure content is targeted and easier to navigate
The government will streamline the Ofsted registration process for childminders and childcare providers. More providers registering will mean that parents have a greater choice of providers on which to use these schemes, to pay for childcare that supports their working lives.
The government will also encourage the growth of childcare agencies (CMAs). CMAs could eventually become major players in the childcare market – stimulating competition and lowering costs while parents offered more care options. CMAs are central bodies that remove the individual administrative and regulatory burden on childminders, as well as often provide parents with tools such as mobile applications to discuss their childcare.
Will Quince, Minister for Children and Families, said:
I am proud of the excellent quality of childcare and early education in England, which is a great asset to working parents. But too much struggling to balance work with childcare costs.
We know there are thousands of parents who are eligible for state aid but do not take it up. Therefore, we want to raise awareness of existing childcare offerings, allow providers to provide services more flexibly, and ensure that funding gets where it is most needed.
Also announced today is an additional £ 10 million investment for maintained nursery schools, in the supplementary funding they will receive from 2023 to 2024. These institutions often care for some of the most disadvantaged children in the country and have additional costs that other early years institutions do not – such as the requirement to have a head teacher – because they are constituted as schools.
Since the introduction of the national funding formula for early years in 2017, the government has provided supplementary funding for these nurseries to protect their funding levels.
This additional funding forms part of a separate consultation on plans to reform how early years funding is distributed in England, to ensure that the system is fair, efficient and responsive to changing levels of need.
The government has spent more than £ 4 billion every year for the past 5 years to help families with the cost of childcare, but almost 1 million eligible families have not taken up their right to tax-free childcare, which is worth £ 2,000 a year. . £ 4,000 for children with disabilities. Universal Credit Childcare allows families to reclaim 85% of their childcare costs, up to £ 1,108 per month.
The government is also launching a renewed campaign via the Childcare Choices website to give parents access to the support they are entitled to, supported by an increased marketing campaign funded by £ 1.2 million, which was launched last week. It will also encourage providers to take the necessary steps to provide the full range of childcare support to parents using their services.
Finance Minister Helen Whately said:
Tax-free childcare offers a helping hand with childcare costs for working families, but thousands of parents can miss it.
With almost 1 million eligible families, I would like to encourage parents to benefit from this support of up to £ 2,000 per year for each child.
Thérèse Coffey, Secretary of State for Work and Pensions, said:
We want more people to receive Universal Credit childcare financial support that is now available to help working families. We also want more childcare providers to register with Ofsted and unlock more places that can be subsidized to help with the cost of living.
The government also provides 15 hours a week of free childcare or early education for all 3- and 4-year-olds, which rises to 30 hours for working families, and 15 hours for disadvantaged 2-year-olds.
The government recently announced that 8 million of the most vulnerable households (about a third of all UK households) will receive £ 1,200 this year and all families will receive £ 400 – this is in addition to changes to Universal Credit, National Living Wage and National Insurance Thresholds so people like what they earn more.
It takes the total government cost of living support to more than £ 37bn – higher than other major economies around the world.
Gemma, from Portsmouth, a mother of one uses tax-free childcare. She said:
As a working mother, it can be difficult to balance childcare. But tax-free childcare enables me to free up cash that can cover the cost of other things – if you’re talking about saving 20% of your childcare costs it can make a big difference.
The government recently launched a new cost of living website that brings together state support offered in one place so the public can see what support they are eligible for.
The childcare selection campaign, which appears on radio, social media and bus stop ads, aims to increase parents’ awareness and understanding of the childcare support available to them from the government, and to increase the number of people accepting our offer, to maximize. This will coincide with the school’s summer vacation, maximizing the recording over the long break and beyond.
The campaign will show parents, bringing together the support available through Universal Credit, tax-free childcare and 15 to 30 hours of free childcare in one place, clearly outlining the fitness requirements and providing a handy calculator so parents can estimate their claim. We will also look at further simplifying the site to make it as easy as possible for parents to understand the support available.
Universal Credit’s childcare offer can save families hundreds of pounds every month – for example, a single parent with a young child working in social care 3 days a week can benefit from around £ 500 a month if they claim support for their childcare costs.
Tax-free childcare helps working families, including the self-employed, reduce their household costs and keep more of what they earn. Working parents with annual salaries of up to £ 100,000 can receive up to £ 2,000 of childcare support each year, or £ 4,000 for children with disabilities.
Recent tax-free childcare statistics from HM Revenue and Customs (HMRC) revealed that 512,415 families received up to £ 2,000 for the cost of their childcare during the 2021 to 2022 tax year, from 374,135 in the previous year. More than 384,000 families used tax-free childcare in March 2022 – the highest monthly number of families using the scheme since it was launched in April 2017.
The announcements follow visits by Minister of Children Will Quince to the Netherlands, Sweden, France and Scotland – whose staff: child relations for 2-year-olds are trying to reflect the consultation launched today.
The government will also examine how to improve recruitment and retention of staff in the sector, giving parents as much confidence as possible in the care their child receives.
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