The report, Double Dutch: the case against deregulation and demand-led funding in childcare, urges early years minister Elizabeth Truss to look to Denmark as an example of good practice in the early years, as opposed to the Netherlands.
Before her appointment as minister, Truss wrote a report for the think-tank Centre Forum, advocating that Britain emulate the Dutch approach to childcare.
She suggested that the childminding profession should be deregulated and said carers should be allowed to oversee more children, to increase their capacity.
But the IPPR report argues that Denmark’s system, where parents benefit from a universal “national entitlement” to childcare and low-income families are given “fee-relief”, provides higher quality and better value for money.
Nick Pearce, director at IPPR, said action does need to be taken to address the fact that childcare in the UK is more expensive and of more variable quality than in many other European countries.
“Advocates for the Dutch system argue that the UK childcare system delivers poor value for money, for both parents and taxpayers because funding does not follow parental demand, our child-to-adult ratios are restrictive and regulation for childminders is overly burdensome, pushing up their costs,” he explained.
“In reality, UK childminders can actually look after up to six children under the age of eight at one time, so long as no more than three are under the age of five and no more than one is under the age of one.
“Rather than ‘go Dutch’, we would do better to look to Denmark, where parents benefit from high-quality, affordable childcare but there is no additional cash payment akin to child tax credits.”
The IPPR report argues that an extra £2.5bn a year would be available to put into childcare if Child Benefit were frozen in cash terms for a decade.
It adds that an extra £4.2bn a year could be redirected into the system if Winter Fuel Allowance and free TV licences – currently paid to all pensioners – were restricted to those on Pensions Credit.
Ryan Shorthouse, researcher at the Social Market Foundation, agreed that the UK system needs reforming, given that government and parents spend a lot on care and providers find it difficult to be profitable.
“It’s important, however, that evidence rather than ideology informs policy,” he said. “We shouldn’t be pro-deregulation or anti-deregulation. Instead, we should look at each regulation in turn.
“Some may be unnecessary and unhelpful: for example, the requirement for childminders to be part of a childminding network to deliver the free entitlement, which the Department for Education (DfE) has now dropped. But some regulations may be useful. Since the introduction of the Early Years Foundation Stage, for instance, quality across the sector has improved.”
A DfE spokesman said rising childcare costs are a “huge issue” for parents. “It is clear the current system needs big improvements,” he said. “We have set up the childcare commission to examine in detail what reforms need to be made. We are listening very closely to frontline professionals and to parents.
“We are looking at best practice in countries such as France, Germany, the Netherlands and Denmark, where high quality and greater professional autonomy have been successfully combined. We will be setting out next steps in due course.”