CBI chief calls for childcare reform to boost UK economy

The UK government’s “small” moves on childcare reform are not enough if it wants to address worker shortages, the head of the country’s top business organisation has said.

Tony Danker, the CBI’s director-general, will give a speech later today that calls for bold economic reforms in several areas this year. The UK is currently battling a cost-of-living crisis, worker shortages, multiple crises in its public health service, and forecasts of a recession.

Danker’s speech will cite childcare reform as one of the key issues that will get more people into the workforce. He will point out that, given that the UK has chosen to curtail immigration post-Brexit, it must rely on other bold policies to help fill vacancies.

“We have a massive labour shortage problem in this country,” Danker said in an interview with the Today programme ahead of his speech, acknowledging that many nations face this issue. “The difference in this country is [that] we’re saying we’re not going to use immigration to solve it.”

“That means, on all the other areas of labour shortage, you’d better have double the policies of other countries. [For example], you’re going to have to have a much better childcare offer, to get carers back into work.”

Childcare providers, campaigners, and families have long called on the government to overhaul the UK’s patchy and expensive childcare system. But it is striking to see the CBI, an influential body that represents around 190,000 businesses, also point to childcare as a major issue for its members.

Over 1.1 million job vacancies

The UK has struggled to get people back into the workforce following the Covid pandemic – official data shows that there were 1.16 million job vacancies in the last quarter of 2022, as compared to 811,000 vacancies in the last quarter of 2019. Over 1 in 10 businesses surveyed late last year reported experiencing a shortage of workers.

While there are several reasons for this shortage, childcare is often cited as a key issue – especially in terms of the barriers that prevent women from working. Around 1.7m women in the UK cannot work as many hours as they want due to childcare issues, according to a 2021 report by the Centre for Progressive Policy. Workingmums.co.uk reported last week on how childcare issues affect nurses, at a time when the NHS has a shortage of over 47,000 nurses, accounting for almost 12% of roles.

Danker also cited the need for big healthcare reforms, in order to tackle the high numbers of people who are not working due to long-term health issues. His speech will also stress the need to prioritise “green growth”, as electric vehicle production and other green industries are a growing area of business globally.

Prime Minister Rishi Sunak has come under fire this month for not announcing any childcare reforms since taking office in October. Over the past year, the main government proposal has been to “relax the ratios” for nurseries and childminders so they need fewer staff – but this was met with widespread criticism and appears to have been quietly shelved. In any case, this relatively small change would have done little to overhaul the childcare system.

“I don’t want to hear small decisions on childcare, small decisions on long-term sickness, small decisions when it comes to skills,” Danker said in his Today programme interview. “I want to hear big decisions that are game-changers, and that’s not where we’ve been in policy for the last year or two.”

In his speech, Danker will also urge the government not to put off announcing reforms until 2024, when it will be trying to woo voters in the run-up to the general election.

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