Ben Franklin: 'Why investment in childcare is crucial'

Childcare is economic infrastructure. At the Centre for Progressive Policy, we have estimated widely accessible high-quality childcare could boost UK GDP by 1 per cent, or up to £27 billion, as parents are better able to progress in work. To try and reap this reward, the Conservative Government has started expanding the 30 hour a week subsidy to working parents of children under three – with roll-out planned to be complete by September 2025.

But as those working across the sector will know, Government subsidies were already insufficient for funding the places of three- and four-year-olds, so this latest expansion – which Labour has also now signed up to – will simply squeeze margins even further. The risk of policy failure here is huge – our latest research estimates that we will need an extra 28,000 workers by the end of 2025 to meet likely demand from parents.

Some areas of England will see particularly acute staffing crises. Across all local authorities, the numbers of staff will need to rise by an average of 14.5 per cent to accommodate demand, but across the Midlands – in Nottingham, Derby and Leicester – this rises to over 20 per cent. That means boosting the workforce by a fifth in the space of 18 months across these cities – sounds highly implausible.

An incoming government needs to act fast to alleviate the impending crisis. The most pressing issue is ensuring that Government subsidies represent a genuinely fair price for childcare, otherwise more staff will leave and there will be more nursery closures. The level of the subsidy should be driven by the actual local cost of delivering childcare and we are calling for local audits to help establish what a fair price is. Top-up funding should be complemented by the creation of a new independent body called Skills for Childcare, which would provide practical support for recruitment, development, and leadership in the sector.

But perhaps most importantly, we are calling for the new government to see childcare as a critical part of economic development – boosting the life chances and potential of our children while reducing the employment and earnings gap between women and men. Government spending on childcare should not be seen as a cost but akin to investment in hard, physical infrastructure such as roads and railways – crucial to the economic fabric of our nation. And children from all walks of life should be able to benefit from childcare – whether their parents work or not.