‘Employers and government should do more to subsidise childcare costs’

Employers should pay more towards the cost of childcare for their employees given that childcare for young children has risen more than four times faster than wages since 2008, according to analysis published by the TUC.

The analysis reveals that in England the average wages of those with a one-year-old child rose by 12% in cash terms – although pay is still falling in real terms – between 2008 and 2016. However, over the same period, childcare costs increased by 48%.

The TUC says that in some parts of the UK the cost of childcare has risen by even more – in London childcare has risen 7.4 times more quickly than pay, in the East Midlands 7 times, and in West Midlands 4.8 times.

While there is government support for childcare for children aged two and older, most working parents with one-year-olds do not get any state help with childcare costs, the TUC states.

In England, the TUC says:

• A single parent working full-time with a one-year-old in nursery for 21 hours a week spent more than a fifth (21%) of their wages on childcare in 2016, up from around a 6th (17%) in 2008.
• One parent working full-time and one parent working part-time with a one-year-old in nursery for 21 hours a week spent a 7th (14%) of their salary on childcare in 2016, up from around a 10th (11%) in 2008.
• Two parents working full-time with a one-year-old in nursery for 21 hours a week spent around a 10th (11%) of their wages on childcare in 2016, up from around a 13th (8%) in 2008.

The analysis also shows pressure is even greater on parents working full time, especially single parents. A single mum or dad with a young child in nursery for 40 hours a week would need to spend two-fifths (40%) of their pay on childcare, says the analysis.

TUC General Secretary Frances O’Grady said: “The cost of childcare is spiralling, but wages aren’t keeping pace. Parents are spending more and more of their salaries on childcare, and the picture is even worse for single parents.

“Nearly a million working parents with one-year-old kids have eye-watering childcare bills. There is a real gap in childcare support for one-year-olds until government assistance kicks in at age two.

“Parents need subsidised, affordable childcare from as soon as maternity leave finishes to enable them to continue working, and so mums don’t continue to have to make that choice between having a family and a career.”

The TUC is calling for:

• Universal free childcare from the end of maternity leave.
• More government funding for local authorities to provide nurseries and childcare.
• A greater role for employers in funding childcare, either through direct subsidy to employees or the provision of on-site childcare facilities.

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