THE BLOG

When Best Efforts Aren't Good Enough: Re-Thinking How To Meet The UK's Childcare Needs

14/12/2016 12:47 GMT | Updated 14/12/2016 12:48 GMT

Everywhere we look within the public sector we see a double bind. The challenge of rising demand and reductions in funding. But with recent government announcements for funding childcare over the last few months, you'd be forgiven for thinking that this was area where we didn't need to worry.

Government provision of the 30 hours 'free' childcare for 3-4 year olds is now being trialled in some UK locations, with a view to rolling out nationally in late 2017. The minimum funding rate for childcare has been increased and funding has been announced to support child-care in deprived areas with additional support for children with special needs.

Government responses to put a bit more money into the system are of course welcome, but too often these announcements of funding are implicitly talked about as if they solve the problem; and solve it in perpetuity.

As the Early Years Development and Childcare Partnerships (EYDCPs) which ran between 1999 and 2004 in England showed, funding only really means anything if it can be guaranteed in subsequent years, or if the initial investment is focused firmly on creating sustainable ventures and initiatives.

We know that access to good quality childcare delivers two highly important sets of outcomes, especially for low-income families - better early development, educational attainment and life chances for children; and better access to work for parents.

But despite all the promises and announcements of support, three core problems remain when it comes to providing childcare to all those who need it. If we are going to meet the demand for childcare provision, we need to look to a range of new models that can address the issue of affordability for parents, low profit margins for providers, gaps in provision and a lack of flexibility in delivery. Flexibility is as important a factor as anything - as more and more people work 'atypical' hours, the lack of flexibility in current models is a major barrier to work for many parents.

So maybe it's time to consider re-thinking models of childcare provision that can address those difficult challenges of affordability, flexibility and accessibility of childcare.

The Family and Childcare Trust reports that only 45 per cent of local authorities in England reported that they had sufficient childcare for parents working full-time. And the UK Government's plans to stimulate demand for childcare is not accompanied by any meaningful stimulation of supply; particularly in poorer areas where the business case for commercial childcare providers doesn't stack up easily. For government maintained nurseries, the medium-term sustainability looks pretty precarious too; and so therefore does the sustainability of the 30 hours policy.

Where childcare costs are high, fewer parents work; conversely, where childcare is cheaper, more parents work. Affordability is therefore a key challenge to crack. Staff costs account for 77 per cent of the input costs for childcare providers and therefore represent the biggest single opportunity for innovation to drive down costs.

One way that this can be achieved is bringing in more parents and volunteers. Such an approach has been implemented in a small number of co-produced childcare settings, in the UK and in other, comparable, childcare markets. The Centre for Social Action's work to support initiatives that grow volunteering in quite specific areas like tutoring maths and the emergency services shows quite clearly that volunteers are both able and motivated to help others, even in specialised settings. Combined with a time credit system like Spice or providing discounts to fees for parents who can lend a small number of hours each month to the running of the nursery (such as we see in the 'Grasshoppers In The Park' nursery in Bethnal Green in London) would be an idea worth scaling to other areas.

Increased irregular patterns of working present a particular problem. Data from the Labour Force Survey suggests an estimated 35 per cent of those in employment work overtime hours. The use of zero hours contracts has grown to include about 800,000 workers. People who are self-employed may also experience irregular patterns of work, with over 15 per cent of the workforce being self-employed in 2015. Strategies and platforms to build social networks for parents who don't necessarily have grandparents or close friends to rely on for childcare out of hours may improve access to non-family informal care. The wider use of time-credits to reward and incentivise the provision of informal childcare might also provide a helpful mechanism for incentivising the provision of informal care.

Whether through sharing back office services, physical spaces or bank staff, collaboration of childcare providers who are struggling with financial sustainability is also a vastly underexplored area. Tangible incentives to collaborate, such as tax breaks or access to funding for integrating services could help providers of all types and scale.

Nesta's Innovation in Childcare report, produced in partnership with The Family and Childcare Trust, contains further detailed analysis and recommendations to support innovation in childcare provision.