Childcare costs stop low-income families from working
Katy Morton
Wednesday, September 7, 2011
Low-income families across the UK are having to turn down work or are considering leaving their jobs because they can't afford to pay for childcare, according to a new survey.
The Daycare Trust and Save the Children poll of more than 4,000 parents found that 61 per cent of parents living in severe poverty, with a household income of less than £12,000 per annum, are struggling to pay for childcare, compared to around a third of parents on higher incomes.
Because of high childcare costs, a quarter of parents in severe poverty have given up work and a third have turned down a job.
The cut to the working tax credit has meant that four in ten working families in severe poverty are considering giving up work as they no longer earn enough to cover the childcare bill. The cut has added on average £500 per year to the childcare bill for low income families.
The survey also found that, regardless of income, 63 per cent of parents can’t afford not to work, but struggle to pay for childcare.
According to the charities, parents in Britain spend almost a third of their incomes on childcare, more than anywhere else in the world. For 40 per cent of families the cost of childcare is on par with their mortgage or rent payments.
Save the Children and the Daycare Trust are now calling on the government to increase the amount they plan to spend on childcare support under the new Universal Credit. They recommend that the government pays up to 80 per cent of childcare costs for low-income families up to current weekly maximums to help them into work and out of poverty.
Anand Shukla, chief executive of the Daycare Trust said, ‘Daycare Trust hears from parents every day who are being forced to make difficult decisions about their career and family life as a result of Britain’s high childcare costs. Being able to work and be financially independent is in the interests of both families and our wider society; yet as our survey shows, parents are being forced out of work as a direct result of how expensive childcare is. If you want welfare reform to ensure that work does pay for low income families, then you need high-quality childcare provision that is affordable for parents.’
June O’Sullivan, CEO of London Early Years Foundation, said, 'There is no doubt that in the current economic climate the vast majority of families are under increased financial pressure. At the same time, good quality childcare has never been so important. In the short term, it directly enables parents to return to work and training (with all the benefits that brings for their family and the UK's faltering economy).
'More importantly, according to a growing body of accepted research and real life evidence and as a key example of successful early intervention, quality childcare plays a vital role in building a better future for London's children, families and local communities. This is especially true for those children from deprived backgrounds, where poor quality provision is tragically so much more common, creating a double dip of disadvantage.
'With the expected and correct emphasis on quality, childcare costs will always pose a problem for the average family, and even more so for those on lower incomes. And when you consider the higher than average true costs of living in London, even an average family with a combined salary of £40,000 falls directly into this bracket - yet is no longer eligible to benefits from the critical support they would have previously received under the tax credit system.
'Of course, the onus is then down to nurseries themselves to somehow bridge this gap - but with an average of 75% of the cost of running a nursery associated with paying staff, you simply cannot cut costs when you have to ensure children are looked after by professionals with the appropriate and increasingly required level of qualifications and skills (although in our case, staff have taken a two-year pay freeze to limit the inevitable rise in fees due to inflation).
- See Anand Shukla's analysis of the survey's findings.
