Scrap universal free childcare, says think tank

UNIVERSAL free childcare should be scrapped in order to make provision more affordable, a think tank has argued.

The Institute for Economic Affairs said free care should be targeted directly at disadvantaged families in need, rather than providing "generously subsidised" care for affluent households.

Childcare provision in the UK is amongst the most expensive in the world, despite the Government spending more than £7bn a year on the sector, it added. A family on the national average wage can spend more than a third of net income on childcare costs.

All three- and four-year-olds in England are entitled to 570 hours of free early education or childcare a year. This typically breaks down as 15 hours a week for 38 weeks. The Government has committed to doubling this entitlement to 30 hours a week from September.

However, the IEA argued that Government-funded "free" hours are poorly targeted and have dramatically raised costs while doing little to improve quality.

Its report also claimed that regulations, such as staff-child ratios and occupational qualifications, have pushed many cheaper providers out of the market. This has reduced parental choice while creating a formalised type of childcare that does not suit every family's needs and preferences. Many who rely on family support for childcare, particularly those in minority communities, receive no help.

At the same time, the Early Years Foundation Stage curriculum has put up costs for providers and driven many childminders out of business.

"Government interventions in the childcare sector have resulted in both British families and taxpayers bearing a heavy burden of expensive provision," said Len Shackleton, editorial and research fellow at the IEA.

"Regulation has led to an excessive formalisation of childcare and pre-school, which has not only pushed up costs but paid scant attention to parental preferences. Many families may not want the structured form of pre-school that the Government requires as standard. 

"At a time when many families are facing a cost of living crisis, it is important the Government rethinks its involvement in childcare. Rowing back on unnecessary regulation and focusing public funds on those who need it, rather than subsidising the well-off, would be a good way to start."