THE BLOG

What Prospects for Childcare and Eldercare Under the New Government?

26/05/2015 14:35 BST | Updated 22/05/2016 10:59 BST

While care for older people was barely mentioned during the election campaign (see my previous Huffington Post blog here), childcare became the subject of a bidding war between the parties.

Surprisingly the Tories outbid Labour and promised 30 hours a week free childcare to parents of three and four year old children. This was on top of the childcare tax breaks that kick in this autumn.

Chancellor of the Exchequer George Osborne has clearly identified that improving childcare is key to increasing productivity and reviving the British economy.

The big question now is how will the new government deliver this childcare pledge. Childcare providers have long been concerned about how they are currently funded to deliver 15 hours a week free childcare. They argue that government has consistently underfunded the hourly cost of providing free childcare.

This argument will now gather pace as the government prepares to implement its latest pledge. Will the government find the funding to up the hourly rate to what the providers say are the real cost of delivering quality childcare?

If the government doesn't, will we see more providers opt out of providing free childcare? Many will say that they can't run a viable business without adequate funding by government of the free childcare.

At least with the current 15 hours a week, providers have a chance to cross-subsidise this provision by charging parents a higher rate for the other hours they use. But with 30 hours a week, few parents will buy a significant number of extra hours and certainly not enough to make up for the underfunding of 30 hours.

Childcare providers may then focus on the market for children under three, where parents will need to make the most of the new tax break (or childcare vouchers if they continue to use these). This may exacerbate the two tier nature of childcare with those who can afford it driving up prices for provision for children under three.

Interestingly similar market problems are growing in eldercare. A number of homecare providers are saying that they will no longer bid for and deliver contracts where the local authority pays below the rate required. Instead they will only serve private fee paying clients.

Social care for older people has taken the brunt of spending cuts over the last five years as councils cut budgets. We face a real crisis in care with more older people needing care but fewer getting help via their local authority. This is confirmed every day by reviews on the Good Care Guide.

Despite this crisis and the knock-on effects on the NHS, little was said during the election campaign about how to resolve the care crunch. The new Care Minister Alistair Burt has inherited a can of worms. Will he get to grips with the substantial underfunding of care which threatens to overshadow the implementation of the Care Act and its good intentions?

While the drive to make childcare more affordable is seen as critical to help parents to work, we have not seen the same imperative around eldercare. But now that former older workers tzar Ros Altmann has become Minister for Pensions, perhaps we will see more emphasis on the need to support workers with care responsibilities.

One statistic that I regularly highlight is that by 2022 the number of people in the workforce aged 16-49 will shrink by 700,000 while the number of people in the workforce aged 50-64 will increase by 3.7 million. That will happen in just the next seven years and the government and employers need to do much more to make work and care easier for older workers as well as for parents.

The election proved again that politics is increasingly about the personal. And there is nothing more personal than getting the care you need for your family. The next five years will be a real test for the government as it battles to balance the books and meet the growing expectations of families.