Election childcare pledges to prompt massive spending cuts

A comparison of Labour, Liberal Democrat and Conservative manifesto spending commitments by the Institute for Fiscal Studies (IFS) found that all three parties will have to implement far larger cuts than previously thought to fund their childcare promises as well as NHS budget commitments.

A report by the think-tank found that cuts would affect all unprotected budgets, including local government spending, with the three main parties only pledging to protect education, health and international development budgets.

The Conservatives have pledged to provide 30 hours a week of free childcare for all three- to four-year-olds with working parents at a cost of £350m.

But coupled with spending commitments in the NHS, the IFS estimates that if elected the Conservatives would have to make real-terms savings of £30bn, equivalent to a 15.3 per cent cut to unprotected departmental spending over the next five years.

Labour’s pledge to spend £500m on providing 25 hours of free childcare per week to all three- to four-year-olds of working parents would also lead to cuts to unprotected budgets, although not as severe as the Conservatives’ plans.

The IFS said real terms cuts to “unprotected” areas over the next five years under a Labour government are likely to amount to £1.2bn, or 0.7 per cent.

The Liberal Democrats have said they want to spend £2bn to increase free childcare, for all parents with children aged two to four and all working parents with a child aged nine months to two years.

“If this policy were implemented, cuts would be required to unprotected departmental spending,” says the IFS report.

Cuts to unprotected spending under the Liberal Democrats plan is expected to be 6.3 per cent, or £11.8bn, according to the IFS’s research.

Labour’s spending commitments also include ensuring education budgets, including early years and further education, rise with inflation.

The Conservatives have pledged to protect school budgets and ensure they rise as the number of pupils increase, while the Liberal Democrats have pledged to protect education spending on two- to 19-year-olds until 2017/18, then raise it “in line with economic growth” from 2018/19 onwards.

Alison O’Sullivan, president of the Association of Directors of Children’s Services, said early years policy has been a focus for recent governments.

She added: "We have called for the incoming government to ensure help with childcare is targeted towards the most vulnerable children and that there is investment in parenting and wider family support alongside the free childcare offer.

"This focus presents the greatest opportunity to make a real and tangible difference to life chances of vulnerable children and makes better use of the available funds without the need for further budget cuts and savings.”