Britain’s childcare system is not fit for purpose, says Onward

02 December 2022

Expensive childcare hampering the economy as more than six in ten out of work parents cite it as the reason they aren’t working

  • Average price for a part-time nursery place for a child under two is £140 a week, double the average weekly shop
  • Parents in the UK spend three times more of their income on childcare than the OECD average
  • Childcare provider market is in crisis: a quarter of providers have closed since 2015 and the number of childminders has halved in the last decade

Britain’s childcare system is not fit for purpose, harming children’s development and placing a huge strain on families’ finances as the cost of living crisis bites. This is according to a new paper from the Onward think tank which urges the Government to overhaul our broken system. The Tory MP championing reform, Siobhan Baillie, says in her foreword to the report that “we all pay the price for the failings in the current childcare system” and that “none of us can wait any longer”.

Onward’s new paper, First Steps: Fixing our broken childcare system, finds that childcare is too expensive, inflexible and complex. This is contributing to challenges with economic inactivity and productivity, as parents can’t afford to go back into work. It is also placing strain on families during the cost of living crisis, with 92% of parents saying that childcare costs impact their standard of living. This paper was kindly supported by the abrdn Financial Fairness Trust.

Today, Onward reveals the findings of new polling of 1,037 parents with children under 5:

  • Half of parents (50%) say that childcare costs have risen in the last year, but just 9% of parents have been able to cut back on childcare.
  • Nearly a third of families say that childcare is one of their most expensive costs (32%), behind only housing costs (74%), energy bills (75%) and food and drink (66%).
  • Fewer than half of parents agreed that “the amount of support I receive each month makes the costs of childcare manageable” (47%).
  • 30% of parents say that the costs of childcare have forced them or their partner to consider leaving work to care for their children.
  • 65% of parents not in work agreed with the statement: “The main reason I do not work is because the demands of childcare are too great” versus 16% who disagreed.
  • The only reform with net negative support among parents is relaxing staff to child ratios: 52% oppose the idea that “childcare professionals should be able to look after more children at the same time, as they do in other countries” with only 27% supporting.

Onward argues that the childcare system would benefit from greater investment, but recognises the fiscal situation means further funding is unlikely. The think tank has developed a five point plan for improvement within existing spending plans which reduces complexity, improves flexibility, strengthens the early years workforce, and creates a more effective market of providers.

  1. Introducing simplified Childcare Credits to replace a wide range of complicated and ineffective schemes, putting power into the hands of parents to choose the type of care that’s right for them
  2. Front loading Child Benefit payments to allow parents to invest at the beginning of a child's life in exchange for less support when they are older.
  3. Reforming Parental Leave to give parents a shared entitlement of 12 months, abolishing separate paternity and maternity leave
  4. Expanding Family Hubs to give parents more comprehensive community-based support and target services
  5. Introducing provider side reforms like boosting childminder numbers by streamlining regulation and getting high-skilled graduates into the early years workforce

Onward’s Interim Director Adam Hawksbee said:

“When childcare costs are too high, it’s not only parents who suffer. Our economy misses out on workers that could be boosting growth. And our social fabric is weakened as families feel the strain.

As The Government moves on from the Autumn Statement, Ministers needs to show they are willing to take bold decisions to go for growth. Radically reforming our childcare system would be a great first step.”

Siobhan Baillie, Member of Parliament for Stroud and Onward Advisory Board member, said:

“World class childcare is not only about giving children the best possible start to life. It is vital to support parents and carers during what can often be a stressful and yet wonderfully rewarding time of life. It is an essential part of helping these parents back to work and fulfil their full potential.  In short, it impacts all of us.

Onward has listened to the many helpful suggestions we received, examined all of the data closely and proposed some simple and clear suggestions for change.”

Karen Barker, Head of Policy and Research at abrdn Financial Fairness Trust, which supported the research, said:

“This timely research from Onward demonstrates that the UK is lagging behind similar countries in early years support funding. Change is clearly needed and may take many forms, such as reforming shared parental leave, something some forward-thinking companies already offer as standard. In the long-term, more Government investment may be the only way to ensure childcare costs aren’t a barrier to work.”

The polling was conducted by JLP Partners.

Download the report