A stronger focus on quality and early intervention needed to deliver better childcare for low income families

The Family and Childcare Trust is calling on the Government to make improving the quality of childcare and support for low income families its top priority. This could be achieved by better targeted investment and streamlining childcare funding, and help improve poorer children’s outcomes. 

A new report by the Family and Childcare Trust, funded by the independent Joseph Rowntree Foundation, Creating an anti-poverty childcare system, shows that public funding will soon account for the majority of income for early years childcare providers, yet the system is not delivering for families in poverty:

  • Evidence shows that only high quality childcare improves outcomes but children at risk of poverty rarely have consistent access to high quality early years care. Currently, half of the most disadvantaged two-year-olds do not receive their free entitlement in a setting led by an early years graduate.
  • Families in the least affluent areas are less likely to have access to year-round, flexible daycare, limiting opportunities for parents to work or access education and training.
  • The complicated system of support with childcare costs is difficult to navigate for parents, does not adequately support them in training or education, and offers poor work incentives for those with low incomes.

Recommendations to achieve an ‘anti-poverty’ childcare system include:

  • A much stronger focus on delivering high quality care through a move towards a more qualified early years workforce, paid in line with staff in schools who currently earn up to 68 per cent more.
  • Investment in local services to deliver an entitlement to flexible daycare from the age of one, extending across a full working day and for 48 weeks of the year.
  • More of the state subsidies directed at service providers, as this is the most effective way to deliver access to high quality childcare, regardless of parents’ ability to pay.

Under the proposed funding system, parents would pay a capped, income-based fee per hour when accessing childcare outside of the free offer. Families with the lowest incomes would receive all care free of charge while fees would be capped at 10 per cent of disposable income for those with low to middle incomes.

Julia Margo, chief executive at the Family and Childcare Trust said:

“While Government initiatives such as extended free hours and tax free childcare are very welcome and help many parents with childcare costs, the reforms will make an already complex system more complex and there are still gaps in vital support for low income families.

“Our ambitious proposal for a simplified funding system could tackle many of the barriers low income families experience when they try to access childcare and help them move into work. 

“Evidence shows that sufficient funding for a high quality childcare system brings fiscal benefits in the longer term – through children’s attainment, increased maternal employment, higher tax intake and lower welfare payments.”

Helen Barnard, Head of Analysis at the Joseph Rowntree Foundation said:

“Increasing the availability of high-quality childcare is the key to supporting parents back into work and improving children’s life chances; it could also save the taxpayer money in the long term. Investing in early intervention and family support services, linked to childcare providers, helps families give children a good start in life. Changing the way that childcare is subsidised will help to remove many of the barriers that low-income families face when trying to access childcare. We also need to look at ways to boost the quality of care to make sure that the system works for those on the lowest incomes.”

To achieve the long term aims set out in the report the Family and Childcare Trust estimate that investment must rise to 0.85 per cent of GDP, up from allocated childcare spending of approximately 0.48 per cent in 2017/18. Evidence set out in the report shows that this investment will deliver fiscal benefits in the long-term. The report argues that the Government should prepare a new ten year childcare strategy to transform services.


View the full report.

Contact: Rebecca Griffin rebecca@familyandchildcaretrust.org Tel: 020 7940 7533

Notes to editors:

  • From 2017/18 approximately £7.2 billion of public funding will be allocated to childcare spending in England, around 0.48 per cent of GDP. To invest in an anti-poverty childcare system we estimate that Government would need to increase spending by £5.5 billion to £12.7 billion, or 0.85 per cent of GDP.
  • Half of the most disadvantaged two-year-olds attending free childcare do not receive care led by an early years graduate – a key quality indicator – because private and voluntary settings do not have enough graduate staff.
  • Low pay discourages the best candidates from working in childcare: staff in schools earn up to 68 per cent more than early years staff in private and voluntary settings.
  • While low income parents will get more financial support for childcare costs through extended free childcare for three and four year olds, and an increase in support to 85 per cent of costs from April 2016 for those families eligible for Universal Credit, there are significant gaps for parents who are job-seeking or building skills through education and training.
  • Support through Universal Credit can make it difficult for families to move above the poverty line when second earner incentives are minimal, particularly in regions with the highest childcare costs such as London.
  • Childcare in deprived areas is dominated by maintained providers in schools, which usually do not offer full day care. The majority of children in nursery classes in schools have at least one parent who is not working, while the majority of children in private daycare providers have parents who are both in work.
  • The Joseph Rowntree Foundation is an independent organisation working to inspire social change through research, policy and practice. For more information visit www.jrf.org.uk. 

About the Family and Childcare Trust

The Family and Childcare Trust works to make the UK a better place for families. Our vision is of a society where government, business and communities do all they can to support every family to thrive. Through our research, campaigning and practical support we are creating a more family friendly UK.                      

The Family and Childcare Trust’s annual childcare costs survey is the definitive report on childcare costs and sufficiency in the UK and its data are used by the Department for Education and OECD. For further information, go to www.familyandchildcaretrust.org