The Joseph Rowntree Foundation recently published an ambitious long-term strategy to solve poverty in the UK. The strategy is based on a wealth of evidence and adopts a long-term and holistic approach, looking across all ages and the role of the state as well as the public, employers, businesses and practitioners. The Family and Childcare Trust worked with JRF to produce recommendations to transform UK pre-school childcare provision and we are pleased that our proposals form a key part of the strategy.

UK governments are serious about investing in childcare, with additional investment of around £2 billion committed by the end of this Parliament through the 30 hour offer and UK-wide tax-free childcare scheme (each UK nation bar Northern Ireland has now committed to the 30 hour offer). It is not always clear, however, that policy makers have a coherent vision for the childcare system that will help to reduce poverty. The Family and Childcare Trust’s recent paper, Creating an anti-poverty childcare system, commissioned by JRF, seeks to address the challenge of not only investing in pre-school childcare but of doing so in a way that will help to reduce poverty.

Why invest in childcare?

Childcare is critical to tackling poverty in two key ways. First, high quality early education and early help services help ameliorate the effects of poverty on children and families by supporting children’s development and improving educational outcomes. Second, flexible, affordable childcare provision is central to supporting parents to improve their income through work or by accessing education and training.

These aims are simple enough but in practice have been difficult to achieve. Families at risk of poverty are particularly poorly served by the childcare system: flexible childcare tends to be more scarce in the least affluent areas because there are fewer employed mothers seeking nursery provision, early help services have been hit as local authority budgets fall, and a complex system of childcare subsidies provides poor or unclear work incentives for many and can exclude parents seeking to access training and education.

Delivering high-quality childcare

The most effective way of addressing these problems and delivering high quality pre-school services is to fund services directly, rather than giving cash subsidies to parents. This approach would put childcare providers on a stable funding footing, enable a simpler fee system for parents and allow the state to exert more influence over the most important aspects of services such as staff qualifications, wages and opening hours. To end persistent under-funding, we recommend the creation of a permanent independent body to advise ministers on early years funding.

High quality provision is crucial to improve outcomes for the most disadvantaged children and the current childcare system falls short. To be clear, we do not argue that there is a preponderance of poor quality childcare. In fact, given low wages and difficult working conditions, early years staff often show remarkable professionalism and commitment. But emotionally competent care and professionalism are not enough. Every child’s development is different but those who live in poverty tend to fall behind because their language, social and emotional development does not keep pace with other children. To counter this disadvantage, early years staff must be exceptionally knowledgeable, skilled and well-supported educators able to identify each child’s development needs and respond effectively. To ensure this is the case, we would like to see every child receiving their early education in graduate-led care.

A succession of workforce reviews such as the Nutbrown review in England and Professor Iram Siraj’s review of the childcare workforce in Scotland have argued coherently that a raft of measures are needed to raise quality, such as improving training, simplifying and integrating inspection frameworks, ensuring that staff receive the living wage or higher, and incentivising graduates to join the profession. Our report proposes a funding structure and a realistic long-term investment plan to deliver fully on these proposals.

The bigger picture

High quality care also means investing in family support, primarily through children’s centres and family hubs, which JRF’s wider strategy recommends extending where appropriate. Policy makers must prioritise protecting support such as maternal and infant health services, employment advice, basic skills training and parenting support that prevent problems from emerging and help families who are experiencing difficulties get back on their feet. Unfortunately, these services have been caught up in local government budget cuts. It makes little sense to protect the education budget and the NHS whilst cutting early years services targeted at those most vulnerable to poverty.

While welcome to many families, the 30 hour offer does not solve the childcare conundrum for all. The offer does not extend to one or two year olds, leaving a gap between the end of parental leave and the beginning of free care. Offering a flat 30 hours to all families is also a relatively crude way of allocating funding to meet need; in reality, some families with high incomes will need fewer hours and some families with low incomes will need more. Most critically, a generous offer for working families exacerbates funding challenges: it is difficult to significantly extend free hours, invest in quality, increase flexibility and protect family support services all at once.

Next steps

The wholesale reform of early years funding would provide a valuable opportunity to improve on the current system. Our report recommends that the free offer focuses on delivering 15 hours of high quality free early education to all two to four year olds. Alongside the free offer, parents should have an entitlement to daycare from 8.00am to 6.00pm (we also propose some steps to improve access to childcare for parents working atypical hours) and a simple tapered fee structure should be put in place – families with low incomes would receive all care free of charge whilst those with higher incomes would pay a modest capped fee for hours after the first 15, starting at 50 pence per hour. This approach, which is similar to the models that operate in the Nordic states, is a more sensible way of targeting resources effectively and would allow policy makers to square the funding circle.

These proposals are inevitably costly and in the long-term would involve increasing spending on early education and childcare from 0.5 per cent of GDP at present to around 0.85 per cent. But a well-designed system will bring fiscal and social returns to the public much greater than this investment. Unfortunately, too little attention is paid to the aspects of care that really make a difference to families and services are falling short of their potential to improve children’s outcomes and raise family incomes. Policy makers must ensure that good intentions translate into well-designed policy and build a childcare system that truly helps to address poverty.