Report calls for a family stimulus to save the childcare sector

A report by the TUC and IPPR calls for greater investment in childcare to boost GDP,  lift children out of poverty and help childcare providers survive Covid-19.

evidence about childcare

Teacher and adorable children being creative with colorful pencils at kindergarten

Investing in childcare could provide a “family stimulus” which could boost the economy, alleviate child poverty and help childcare providers survive the pandemic, according to a new report.

The report, A Family Stimulus: Supporting children, families and the economy through the pandemic, by the TUC and the IPPR think tank, calls for money to be put directly into the hands of families to provide a stimulus for the economy, whilst improving outcomes for children.

It comes as figures from the Department for Education, released today, show that a survey of childcare providers conducted in July reveals that only 45% of nurseries and pre-schools and 55% of childminders open at the time of the survey predicted that they would be able to remain financial sustainable for a year or longer – although the survey was conducted before the Government’s announcement that Local Authorities would continue to be funded for the Autumn term at broadly the levels they would have expected had there been no coronavirus outbreak.

The Family Stimulus report is based on modelling which finds that doubling child benefit would inject £14 billion into the economy over the next 18 months and boost GDP by £19 billion in terms of additional spending, whilst lifting 500,000 children out of poverty.

It adds that increasing the child element of universal credit (UC) and child tax credit (CTC) by £20 per week per child and removing the two-child limit would inject £11 billion into the economy, or increase GDP by £14 billion, lifting 700,000 children out of poverty.

Although the report says raising UC and tax credits provides a more targeted approach, doubling child benefit might be a better option because of  its widespread coverage, reliability and the fact it is paid to the primary carer which, it says, increases the likelihood it will be spent on children.

It also calls on the Government to continue to provide free entitlement funding to local authorities and childcare providers – particularly in disadvantaged areas – at pre-pandemic occupancy rates until these have returned to normal levels at an approximate cost of £400 million in 2021. It also calls for the provision of at least £88 million transitional
funding in line with that provided to schools to help prevent redundancies and ensure providers can continue to operate.

And it recommends that the Government further invests in the childcare sector to create good quality jobs and improve pay and conditions for childcare workers, saying investing in social infrastructure is as important as investing in physical infrastructure such as roads, transport and clean energy.

Neil Leitch, chief executive of the Early Years Alliance, welcomed the report, saying: “With report after report and organisation after organisation calling for greater support for the sector, it’s long past time for the government to recognise the scale of the crisis facing early years providers and commit to taking urgent action to safeguard the thousands of settings at risk of closure.
“We urge the government to ensure that greater investment into the early years is a central part of the upcoming Spending Review, so that nurseries, pre-schools and childminders can continue to deliver the quality care and education that children and families across the country rely on every day.”


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