Universal preschool funding needed in England, says report
Tens of thousands of low-income families in England have to pay to return to work after having children because childcare provision discourages work, according to a report.
The Institute for Public Policy Research (IPPR) has called for a government-funded universal preschool childcare starting immediately after parental leave to replace an “incomplete patchwork” of childcare provision.
The move would improve tax receipts, upskill the workforce and improve childhood outcomes, argues the IPPR.
In a damning report examining current childcare provision, the IPPR said England’s childcare market is on the “brink of collapse”, as government funding for free available hours fails to meet spiralling costs for providers.
The report states that:
Children in low-income households receive worse care than those in wealthier households
Workers leave the workforce because of the gap in childcare funding after the end of parental leave
Upfront childcare costs for parents on universal credit, even if later reimbursed, stop low-earners returning to work
A lack of affordable “wraparound” care is stretching family budgets to “breaking point”
The UK has the second highest childcare costs in the developed world, as fees have risen by an estimated £2,000 a year and have almost doubled for parents with a child under two since 2010, according to TUC research.
The IPPR has found that low earners face “staggeringly high” effective tax rates of up to 130% if they work more than 25 hours a week: as they pay income tax, universal credit tapers and childcare costs mount.
This would mean that an administrator earning £10.50 an hour with a partner earning a similar amount would effectively pay £3.51 for every hour they worked over 25 hours.
“The current childcare
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