IPPR calls for 'economy-boosting' universal childcare offer

In its ChildMind the Gap report, the Institute for Public Policy Research (IPPR) argues that channelling funding for children and families direct to children’s centres would enable lone parents and mothers of three- and four-year-olds with few professional qualifications to return to work.

It claims that employing this approach instead of supporting families through tax-free vouchers or other benefits would enable the government to reduce the amount it spends on benefits and put money back into the economy.

The IPPR claims that £1.5bn - £500m from extra tax revenue and £1bn through reduced spend on benefits – could be generated if the percentage of mothers of children under five in employment rose by 10 per cent – something the think tank says would be possible if the government introduced a universal childcare model.

It follows another IPPR report in December, which claimed that paying public money direct to childcare providers would also help raise standards in the early years sector and enable greater support for raising the qualifications of childcare professionals.

Dalia Ben-Galim, associate director at IPPR, said the move has substantial financial benefits.

She said: “The largest savings as a result of higher maternal employment comes from benefits savings – reduced spending on housing benefit and reduced spending on income support and contributory job-seekers allowance.

“The other economic benefits come from increased revenue through income tax and national insurance contributions.

“We know that 43 per cent of parents with children aged three- to four-years-old who want to work or work longer hours find affordability of childcare a barrier, rising to half among parents with a youngest child under two.

“Universal childcare is the solution that will make Britain better off and help families deal with the squeeze on incomes and rising care needs as a result of the ageing population that means parents and grandparents are increasingly called upon to provide care rather than remain in employment.”
    
Liz Bayram, chief executive of the Professional Association for Childcare and Early Years (Pacey), has welcomed the proposal but said any model must be properly funded and take all types of childcare provision into account.

She said: “Pacey agrees that childcare should be channelled through community institutions, rather than cash benefits or tax free vouchers, but this doesn’t mean just children’s centres – flexibility is also needed in how other childcare settings are funded, as well as for the particular type of care that setting provides.”