Universal childcare ‘worth £1.5bn to economy’

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A LEADING think-tank has called for the Government to introduce universal state-funded childcare, saying it would boost the nation’s balance sheet by up to £1.5bn 
a year and bring many thousands of mothers back into the workplace.

The centre-left Institute for Public Policy Research (IPPR) says Britain has rediscovered the importance and value of the family during the recession and that there is no evidence to support the idea of “broken Britain”, as previously claimed by Prime Minister David Cameron.

But it has warned that families are under “real strain” because of factors including high childcare costs and fears for the future of young people due to the difficulty of buying a first home.

The IPPR said investing in better childcare could generate nearly £1.5bn in fiscal benefits by helping 280,000 more mothers back to work.

Increasing the employment rate of mothers with pre-school children by five per cent would generate £300m of extra tax revenue and £500m in lower tax credit and benefit spend, it claimed.

The change would be brought about through community institutions, such as children’s centres, that bring children and parents together, rather than “resting on redistributing income through individual cash benefits, or vouchers”.

Director Nick Pearce said: “In our research, we have consistently found the family to be the critical point at which people’s hopes and fears intersect.

“The recession made it vital to share resources in families, while recovery has been accompanied by deep anxiety for the future, particularly for young family members starting out in life.

“As society ages, and care needs rise, questions of inter-generational support and risk sharing will dominate policy debate.”

Mr Pearce added: “A new politics of the family is taking shape. At its heart is the question of how to fund, expand and reform care of children and the elderly, neither of which is currently well served by public services or private market.”

The IPPR says “couple families” with a single earner are four times more likely to live in poverty than those with dual earners and three times more likely than couple families where parents work part time.

The study is reportedly being closely followed by Jon Cruddas, one of Labour’s main policy makers, and is said to be the biggest assessment of social policy 
on the centre-left since IPPR’s 1994 Commission for Social Justice.