Stella Creasy is the Labour MP for Walthamstow. In the latest blog in our A Fair Start? series, she reflects on the economic costs of an unequal early years system. 

In the coverage of the current cost of living crisis, the focus has primarily been on utilities, travel costs and food bills. Yet for many, childcare is another bill which means there is too much month at the end of their money. 75% of children living in poverty are in working households, with childcare costs accounting for 56% of the overall cost of a child for working couples. The TUC found that for a one-year-old, the cost of nursery provision has grown four times faster than wages, and more than seven times faster in London. In communities like mine which has the tenth highest level of child poverty in the country, families are not just choosing between eating and keeping a roof above their head. They are choosing whether or not to have jobs at all. 

Prior to 2020, in England, 30% of councils reported a shortage of childcare for children under two. Children with special educational needs or disability were particularly under-served, with only 19% of local authorities having enough childcare for them. The pandemic has exacerbated this problem, with the National Day Nurseries Association tracking how thousands of childcare settings have disappeared under the financial strain. 46% of mothers being made redundant during the pandemic reported that lack of childcare was a factor in their selection for redundancy and 72% have worked fewer hours and cut their earnings due to lack of childcare. Despite tabloid excitement that Dads were taking on more childcare in the pandemic, the reality has been that thousands of women have paid the price for the lack of support to this sector with their careers. 

A Freedom of Information request by the Early Years Alliance revealed funding rates paid to childcare providers for the so-called ‘free childcare’ places are just two-thirds of what the Government itself estimated would be required to fully fund the scheme. The consequences of this are not only to make the industry unsustainable, but also exacerbate inequality. A system that waits until a child is two years old before any provision is funded fails to help those who need childcare to stay in work – with many admitting defeat well before their child meets this threshold because of the cost of care- and subsidises many who can already afford it in any case. Recent Sutton Trust research found that 70% of those eligible for the full 30 hours of funded early education at ages three and four are in the top half of earners, while just 20% of eligible families are in the bottom third of the income distribution. 

For the sake of our economy and equality this situation must be radically reformed. During the pandemic, the struggle to home school and continue to work from home was a hot topic. Many talked about how this experience would lead to a positive transformation in employer understanding of flexible working, and families demanding change. Yet this revolution is yet to materialise, as politicians urge everyone back to the watercooler and suggest those working from home are on their pelotons rather than parenting. Yet it doesn’t have to be this way. Universal childcare is one of the best investments any Government can make- not only does it provide jobs and help parents secure employment too, it pays for itself as it helps to generate taxes and cut welfare spending.  

Despite the overwhelming evidence of how beneficial this would be, the track record of recent years is cuts to early years education funding. The most recent budget slashed taxes on prosecco, craft beers and plane tickets- chalking up billions of pounds worth of spending in the process. It offered only £510m for childcare. This is less than the £664 million of the budgeted amount destined for tax-free childcare vouchers went unspent in 2019/2020. This underspend is an annual event as many parents are not aware they qualify and claim. However the Government does not claw this funding back for early years meaning it is currently lost to the childcare settings that desperately need it to stay open. 

Children from disadvantaged homes have been negatively impacted by the pandemic and it is the youngest children who have missed out on vital development opportunities. The Sutton Trust recently investigated the feasibility and potential impact of universalising the 30 hours entitlement, to increase access to many lower income families who are currently excluded. They found that extending this entitlement has the potential to improve outcomes for disadvantaged children, and could form a vital part of the recovery effort after the pandemic. 

Inequality starts early – without access to high quality childcare, many children struggle to catch up with their peers throughout their lives. So too, as we come out of the pandemic our economy cannot afford to waste the talent that has disappeared from workplaces because of these pressures. After nearly two years of Covid and its impact on their families, there are many who are tired, fractious and in need of support – and that’s just the parents who are struggling to balance work and family life. That’s why it’s time to stop seeing childcare as an optional extra and struggling to juggle work and family life as inevitable. It’s time to recognise nurseries and childminders as a key part of our national infrastructure for recovering from the pandemic and make affordable and quality childcare a reality for all.  

The opinions of guest authors in our A Fair Start? series do not necessarily reflect the opinions of the Sutton Trust.