The report by accountants PriceWaterhouse Coopers (PWC) considered the costs, benefits and options for funding a vision of universal early education and care developed by the Daycare Trust and the Social Market Foundation.
The report recommends an extension of parental leave to 12 months and home care allowances for parents of one- to two-year-olds. It also advocated 20 hours a week free early years education and care for all two-, three- and four-year-olds and additional wraparound care for this age group from 8am to 6pm, 48 weeks a year.
Universal early education and care in 2020: costs, benefits and funding options also called for a childcare entitlement to cover the whole working day for parents who want it, and wraparound care for five- to 14-year- olds in line with Government proposals for extended schools.
The PWC report, which said the package would be paid for 'either from higher taxes or reduced spending elsewhere', estimated that the net cost in 2020 would be around 0.7 to 1.3 per cent of gross domestic product - between 8 billion and 15 billion a year at today's values.
The gross cost would be about 2.2 per cent of GDP in 2020, bringing it close to the 2 to 2.5 per cent GDP currently spent in Denmark and Sweden on early education and childcare.
As the Government prepares to publish its own ten-year plan next month, the PWC report said that childcare tax credits should be phased out and the bulk of funding should go directly to providers, as it does in Sweden and Denmark. Parental contributions for wraparound care 'are assumed by 2020 to cover 30 per cent of total costs on average, which is broadly in line with the average in other EU countries'. State subsidies would be related to income and the number of children in each family.
The report said there were also attractions in the planned funding regime being developed in New Zealand, which will promote quality provision by linking the grant per child-hour to factors such as child:staff ratios and staff qualifications.
The report claims that some of the investment would be offset by increased employment for parents, improved productivity of children later in life because of high-quality early education and childcare, improved health and a reduction in child poverty and crime.
It called for 'a significant upskilling of the early years workforce', with the aim that 60 per cent of staff should have a graduate-level teaching qualification by 2015, with the remaining 40 per cent reaching level 3 qualifications by that date.
Under the report's proposals to extend parental leave from six to 12 months and allow it to be shared between mothers and fathers, parents would receive 90 per cent of earnings for six weeks. For the remaining leave it would increase progressively from around 60 per cent of the national minimum wage at present to 80 per cent by 2010 and 100 per cent from 2015 onwards.
The PWC report advocates a mixed economy of early years provision, indicating that even an ambitious programme to create 10,000 children's centres would need to be supplemented by childminding networks and by other providers in the private, voluntary and maintained sectors.
* See next week's issue for more details of the report
