Extend free childcare to boost economy, says CBI

Early years groups have welcomed the idea, included in the CBI Better Off Britain report, but warned that it can only be delivered if there is an increase in the amount of funding government puts into free childcare and improvements are made in staff training and salaries.

The CBI plan calls for all parents of one- and two-year-olds to receive 15 hours of free childcare from a registered provider. Over time, the number of free hours the government funds under the scheme should be increased, it adds.

Currently, the free entitlement allows parents of all three- and four-year-olds to receive 15 hours of care. In addition, 260,000 of the most disadvantaged two-year-olds receive 15 hours of free nursery provision.

National Day Nurseries Association chief executive Purnima Tanuku said it is “great business is prioritising investment in childcare”, but warned such an expansion “is not viable” under the current free entitlement system.

“It is a policy which will be welcomed by parents and employers, but for nurseries an increase in funded hours would be an increase in losses, unless a radically reformed funding system is put in place,” Tanuku said.

“Most nurseries make a loss on the free 15 hours because the money they get from government doesn't cover their costs. Any increase in free hours would only exacerbate the problem and ultimately, unless costs are covered, nurseries will not be able to offer more places.

“Politicians looking to expand free childcare must make sure that there is enough funding for free hours and local authorities are getting all the money through to nurseries at a local level."

Education union Voice, said the CBI plans back the positive impact that pre-school early education can have.