Follow this topicFollow this topic Knowledge » Family finance

Government childcare plans will INCREASE costs!

Donna Ferguson
by Lovemoney Staff Donna Ferguson on 31 January 2013  |  Comments 12 comments

New childcare proposals won't make childcare more affordable - quite the opposite, in fact.

Government childcare plans will INCREASE costs!

The Government plans to allow childminders and nursery workers to look after more children than the current rules allow.

When Elizabeth Truss, the early years minister, announced her plans, she argued that increasing the ratios of children to carers will increase the number of childcare places available, reducing costs for parents in the “long term”.

As the mother of a one year old I fundamentally disagree.

Childcare ratios set to rise

In my opinion, increasing the number of children a nursery worker can look after by 33% (from three children under two years old to four) and increasing the number of kids a childminder can look after by 50% (from four children to six, with double the number of babies) won’t lead to any reduction in costs for parents.

Yes, the carer could in theory then charge less per child and still earn the same amount or more.

Yes, if the plans go down well with carers, there would in theory be more childcare places available. This could (also in theory) lead to greater competition on price.

But in reality, I think parents will end up paying more to avoid the carers offering the higher ratios - just 5% of parents are in favour, according to Mumsnet. Meanwhile, the carers who do choose to increase their ratios of care will charge exactly the same per child as they do now, for what will necessarily be a lower standard of care.

Why? Because anyone who has ever looked after very young children will know that increasing the ratios in this way will increase the carer’s workload and stress levels by about 500% - and why would anyone ever offer to take a paycut in order to do that?

The idea that standards of care will improve because carers have to gain extra qualifications in order to increase their ratios is, quite frankly, laughable. You don’t need qualifications to look after more children, you need an extra pair of hands per child, and eyes in the back of your head.

For example, a nappy change for one baby would mean leaving the other baby unattended and feeding them all (and cleaning up afterwards) would in my opinion take the childminder half the afternoon. And that’s if the day is going well. Now imagine all those children screaming, crying or (let’s not beat around the bush here) screeching like demented banshees. Because that’s the reality of life with very young children - especially if the adults caring for them are stressed themselves or can’t manage to get them to eat or sleep at the right time.

And that’s just indoors. What’s worse is imagining, as Polly Toynbee did in The Guardian, how the childminder is ever supposed to go outside with the children? She challenged Liz Truss to manage to push a double buggy filled with babies while managing four toddlers on leads, or to  fit six car seats into her car, strap in six children and drive off calmly.

Personally, I’d love to see Ms Truss take up the challenge - but I wouldn’t want my child to be part of the experiment.

Why prices would go up

In my opinion, only carers desperate to earn more money would bother to gain extra qualifications in order to spend all day, everyday, indoors with six bored children desperate for a slice of their carer’s heavily divided attention. Once qualified, why wouldn’t the carer just keep the price per placement the same as it is now, and simply pocket all the extra money from the extra children?

Surely they would feel - understandably - that they were earning it?

Meanwhile, 95% of parents (if the Mumsnet survey is correct) will, like me, be desperately seeking childcare at childminders and nurseries which continue to offer lower ratios, even if that means forking out more. After all, far from there being increased competition among these providers, there will in fact be fewer of them, and they will be under increased pressure to match the wages on offer at higher-ratio care providers by putting up prices.

No wonder the proposals have been met by fierce criticism from both the National Childminding Association and the National Day Nurseries Association.

Parents don’t want it, carers don’t want it and children will suffer for it. Anyone else feel like trussing up Ms Truss?

What Elizabeth Truss should have done

So what could she have done to make childcare more affordable? Well, how about increasing the amount of tax-free childcare vouchers available to working parents? At the moment, basic rate taxpayers can only pay for £55 of childcare a week from their gross salary. Yet childcare typically costs £165 a week across the nation and £233 in London. Doubling the amount of vouchers parents could get would save working parents around £1,000 a year each.

Similarly, the minister could have increased the 15 hours of free childcare on offer to three- and four-year-olds, or extended the scheme to younger babies.

Yes, there would be a cost to the Government for these measures, but if it enabled more parents to work full-time or part-time, it would also benefit the economy and ultimately the Exchequer. According to the Institute for Public Policy Research, the absence of affordable childcare is one of the main factors preventing well over a million women from taking up paid work - and the average return to the Exchequer of a mother going back to work full-time is £20,000 over four years.  

Clearly, Ms Truss couldn’t see her way towards actually helping parents pay for childcare. But the proposals she has laid out this week will only make the situation worse. Shame on her, and shame on this Government.

More on family finance:

Child Benefit changes: what you need to know

How to keep your Child Benefit

Breastfeeding: free help and moneysaving tips

Roosterbank, PKTMNY: pocket money goes online

Protect your kids from your money worries

Enjoyed this? Show it some love


Comments (12)

  • sweetjj
    Love rating 7
    sweetjj said

    I thought the size of the building and the facilities (toilets) determined the number of children a nursery/preschool could have. So if the nursery/preschool can't increase the number of children - they will decrease the number of staff, but if fewer staff are being paid more the costs will be the same - so I don't see how fees are going to be reduced?

    Report on 31 January 2013  |  Love thisLove  0 loves
  • PoohBah
    Love rating 23
    PoohBah said

    I am sure the change has been made with the best of intentions, but also with complete failure to think through the probable - nay, certain - consequences.

    Another paving stone on the road to Hell.

    Report on 31 January 2013  |  Love thisLove  0 loves
  • MK22
    Love rating 169
    MK22 said

    Sadly PoohBah I reckon it is probably 40 years since a Government last managed to think through the consequences of its actions.....

    Report on 31 January 2013  |  Love thisLove  0 loves
  • Just a though
    Love rating 0
    Just a though said

    I suppose if I suggested that the Government should de-nationalise this industry, you would all take humbridge. If you want lower child care costs then you need Government off your backs and caring Grandparents.

    Regulation and vouchers are not the way to run a business, but no doubt you all what something for nothing. Please, a cost to Government for these measures, give me strenght, love money should know the basis of Government funding at least.

    Report on 31 January 2013  |  Love thisLove  0 loves
  • Nickolarge
    Love rating 4
    Nickolarge said

    Reading this article was like reading a transcript of the conversation I had with my wife as soon as I heard the announcement. Sadly, this government thinks that there is a simple answer to most problems and preferably one that involves spending no money and passing the buck so that they don't have to actually do anything, all sold under the banner of giving us "freedom" from government interference.

    Almost nothing this current lot do can survive more than 24 hours of proper critical examination.

    Report on 01 February 2013  |  Love thisLove  0 loves
  • Pitachok
    Love rating 21
    Pitachok said

    Of course increasing the child-carer ratio will reduce fees. We're not really talking about 'childminders' here, as suggested in the article - a single carer struggling indoors with lots of kids. This is about nurseries, where several assistants manage the activities of a group of children. At my son's nursery the fees go down as he gets older. This is specifically related to the number of carers he needs. No-one can say increasing ratios won't reduce costs when it already works like that.

    It also gives more flexibility. We have to pay for every day regardless of whether our child attends (even holidays) because the nursery has to maintain such high staffing levels and needs to know in advance precisely how many children there will be on any given day. If there can be fewer assistants per child, the pressure for this is less and it doesn't matter so much if one child isn't there.

    There is an issue around parents' perceptions. They assume more carers is better for their child. At school age this has been shown to be a false perception - larger class sizes don't mean worse education

    Indeed much has been made of the fact that we have a much stricter regime than in Europe, yet they don't seem to be struggling to educate their children in Germany.

    Yes, parents say they want more carers per child. Yet that ignores the reason for the change - high childcare costs preventing parents with less well-paid jobs from going to work at all. Of course rich parents will still pay through the nose for as low a ratio as possible - some get one-to-one care in the shape of a nanny. But we can't exclude less well-off families from childcare when we have no evidence whatsoever a higher ratio harms a child. Indeed every other country seems to disagree with our low ratios yet many still manage higher educational standards. We should stop imposing unnecessary rules that simply build in costs for parents and exclude others from childcare for no benefit.

    Report on 01 February 2013  |  Love thisLove  1 love
  • yocoxy
    Love rating 152
    yocoxy said

    I'd like to return to work despite having decided to start a family

    I'd like someone else to look after my children

    I'd like someone else to pay for that care..

    Report on 02 February 2013  |  Love thisLove  0 loves
  • Donna Ferguson
    Love rating 130
    Donna Ferguson said

    Thanks for all your comments. Will try to respond to a few of them:

    @poohbah - haha, I agree.

    @Just a though - good point about grandparents. Did you know they are now eligible for National Insurance Credits if they look after grandchildren full time? With regard to your comment about Government funding, the real cost is to taxpayers yes, but I meant that there is what economists call 'an opportunity cost' to the Government - and I think it's worth doing.

    @Pitachok, thanks for taking the time to write such a long comment. I can understand your perspective, but I do think there is a good reason why the current ratios rise when children get older. Babies, especially those under one, need a lot of one-on-one care. They need nappy changes, comforting and frequent feeding as well as soothing to sleep. They are also constantly falling over and hitting each other or hurting themselves or choking or who knows what if you take your eyes off them/don't stay close by. If one nursery worker is changing a nappy and the other is comforting a crying child, there would potentially be six babies (some crawling, some totally helpless) roaming around a room with no one even watching them never mind able to rescue them if they are about to fall over/hurt one another. And what if another starts crying? What if there are 12 babies in the room and one nursery worker leaves the room to go to the toilet? That means 11 babies for 2 adults. A recipe for disaster.

    @yocoxy - do you think no one who has children should work then? What about fathers? Are they unreasonable for wanting to go back to work? After all they started a family too. I think I put in the article that women who go back to work instead of spending four years off looking after children will mean an extra £20k in revenue to the Exchequer. If the Government doubled childcare vouchers, that would only cost them £1,000 in tax but would enable a lot more people to go back to work - whatever their gender.

    Report on 02 February 2013  |  Love thisLove  0 loves
  • amuiyk
    Love rating 3
    amuiyk said

    Totally agree. Even if not more expensive, it won't be much cheaper.

    It costs at least £200per week for childcare 8-6pm in London. It cost £30 week for transport as I am at zone 4.

    I have to get at least £230 per week to work for free.

    And work like this:

    7am get myself ready, 7.30 get baby ready

    8am arrive nursery, no chit chatting rush to work b4 9am

    If u get less than £230 per week, u have no money for lunch.

    5pm be the first runout of the office, no chit chatting.

    If u are lucky with the transport,u escape the fine from the nursery£15 per 15 mins

    Cook dinners, eat dinner, baby shower, put baby to sleep.

    9pm, u eventually got some free time.

    U already too tire. And think, what am I doing?!

    U do all this for nothing.

    Your husband, boss and family will not appreciated your hard work.

    U can't work overtime. Co conversion with workmates or anyone.

    Only say u love money/ career over your child.

    Can only with the baby 3-4 hr a day....

    Also people forget the rent or the mortgage of the nursery contribute to the childcare cost.

    Report on 03 February 2013  |  Love thisLove  0 loves
  • yocoxy
    Love rating 152
    yocoxy said

    Donna, my kids are in their twenties. My wife spent the first year at home with each, then went back to work. We paid for the necessary child care because we were net better off and my wife wanted to get back to work.

    We didn't bleat about lack of Government support.

    Report on 04 February 2013  |  Love thisLove  1 love
  • Donna Ferguson
    Love rating 130
    Donna Ferguson said

    @amuiyk Very true

    @yocoxy - the cost of childcare has risen 61% in the past decade, and now costs parents more than £60,000 on average per child over their childhood. I think it's great you were net better off by going back to work but a LOT of families are no longer in that position, and that's what makes it worthwhile for the Government to encourage them back to work - in my opinion!

    Report on 04 February 2013  |  Love thisLove  0 loves
  • yocoxy
    Love rating 152
    yocoxy said

    When we made the decision to start a family we factored in the loss of my wife's earnings. We waited until we could afford it.

    We didn't just go ahead and then look for Gov handouts..

    Report on 11 February 2013  |  Love thisLove  0 loves

Post a comment

Sign in or register to post a reply.

Our top deals

Credit card
Balance transfers rate and period Representative

Barclaycard 31Mth Platinum Visa

0% for 31 months (2.99% fee) Representative 18.9% APR (variable) Apply
Representative example: Assumed borrowing of £1,200 for 1 year, at a Purchase Rate of 18.9% (variable), representative 18.9% APR (variable). Credit available subject to status. A Balance Transfer fee of 3.5% will be applied, then reduced to 2.99% by a refund (terms and conditions apply). Plus an additional £20 fee refund on balance transfers over £2000.

Barclaycard 30Mth Platinum Visa

0% for 30 months (2.89% fee) Representative 18.9% APR (variable) Apply
Representative example: Assumed borrowing of £1,200 for 1 year, at a Purchase Rate of 18.9% (variable), representative 18.9% APR (variable). Credit available subject to status. A Balance Transfer fee of 3.5% will be applied, then reduced to 2.89% by a refund (terms and conditions apply). Plus an additional £20 fee refund on balance transfers over £2000.

MBNA 30Mth Platinum Credit Card Visa

0% for 30 months (2.89% fee) Representative 18.9% APR (variable) Apply
Representative example: Assumed borrowing of £1,200 for 1 year, at a Purchase Rate of 18.9% (variable), representative 18.9% APR (variable). Credit available subject to status.
W3C  Thank you for using One Flew Over the Cuckoo's Nest