Len Shackleton: We must target resources to solve problem of childcare

The UK Government is now spending more as a percentage of GDP on childcare than every other European country except Denmark. Yet the direct costs to parents rise inexorably. Policy is driven by, at least, three very different objectives. Unfortunately these objectives can conflict, and as a result we have landed ourselves with an expensively ineffective mess and limited parental choice.

First, there is pressure to keep costs down as middle-income working parents can find themselves spending a third or more of after-tax earnings on childcare. Second, many would argue that improvements in the quality of childcare and pre-school education can better prepare children for Big School – and perhaps offset the disadvantage faced by youngsters whose home life lacks structure and support from a stable family. Third, providing affordable pre-school care to welfare claimants, in particular single parents, may help get them back into work and reduce the benefits bill.

Quality concerns have led to excessive regulation. In addition to staffing ratios which are amongst the tightest in the world, we have demanding health and safety conditions, and local authority and CRB checks.

All “early years providers”, whether large nurseries run by big businesses, state primary schools or childminders in their own home, have to follow a structured programme of learning, development and care for children from birth to five-years-old, monitored by Ofsted.

Ofsted has recently been told to get tougher with childcare providers, for which a “satisfactory” rating will apparently no longer suffice. The opinions of its inspectors already count for too much. My little girl likes drawing with stencils, but apparently the Ofsted advice to her nursery was that this would interfere with the development of her creativity.

The predictable effect of regulation has been to raise costs substantially. We now have half the number of registered childminders we had in the late 1990s. Smaller nurseries have also had to close. Higher costs have meant many families face difficulty paying for childcare from taxed incomes. A system of employer-backed vouchers and tax credits was set up under the last government and is being dismantled, but we are instead being offered £1,200 a year in tax breaks for children in formal childcare.

This financial support for parents is ill-targeted: my daughter turned three recently and this has gifted me more than £3,000 of free childcare this year. Thanks, but indiscriminate subsidy of this kind does little to offset disadvantage suffered by poorer children.

Against this background, plans to relax staffing restrictions (currently some of the tightest in Europe) are a modest attempt to allow childcare providers greater flexibility. This may lead to lower costs, and is to be welcomed.

However, at the same time Education Minister Elizabeth Truss has proposed more demanding educational qualifications for childcare workers, which may still further reduce the supply of childminders, limit the growth of small nursery businesses, and incidentally block access to the occupation to many immigrant and minority ethnic providers.

Government policy has forced childcare into the framework of formal education when there is little evidence that this is what parents want. Parents need assurance that their children are in a safe, friendly environment and offered some stimulation within a structured day that fits in with parental commitments.

Our children already start compulsory education earlier than in most countries: they do not need to be in mini-schools from infancy. A childminder looking after a child two or three afternoons a week should not be subject to the same rules and regulations as a large full-time nursery. While some minimum standards in relation to health and safety may be needed, we do not need overpaid Ofsted inspectors to butt in.

And if we really need to provide some limited subsidies to parents, we need to think about this a lot more carefully than in the past – bearing in mind, always, that the most important childcare takes place in the family.

People who stay at home to look after small children, or call on other family members to help, should not be ignored if government has to dip into the collective pocket. Transferable tax allowances, promised in the past by David Cameron, are one obvious possibility.