‘Getting the state out of pre-school and childcare: Ending the nannying of UK parents’, says any state intervention on childcare should be targeted towards poorer families with low levels of employment.
It argues that Government subsidies such as the universal ‘free’ hours have distorted prices and are poorly targeted – so that those who need the most help don’t receive it, while many affluent parents are ‘generously’ subsidised.
The report warns that the move to 30 hours will not reduce the underlying market price of childcare because it will not reduce the cost base, meaning that at best it is ‘redistributive’. At worst it says it could increase childcare fees for other groups as providers will need to ‘cross-subsidise’ to remain financially viable. One reason for this is Government funding rates that in most cases will not cover costs..
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