Guaranteed Childcare for all Families Nationwide
In an effort to address the complexities and inequalities of the current childcare system in England, a proposed new system has been put forward by NEF, Pregnant Then Screwed, and the Joseph Rowntree Foundation.
The key features of this alternative system include a universal core provision of 15 hours a week, free for all children from nine months to four years old. From September 2025, children in families where all parents work at least 16 hours per week will have access to 30 hours of funded childcare. All three- to four-year-olds will have at least 15 hours of funded childcare, regardless of parental working status. Two-year-olds from low-income households or with additional support needs will also benefit from this initiative.
The proposed system is designed to be inherently progressive, with a cap on childcare costs as a percentage of earnings. This means that lower-income families will benefit more, as they spend a higher proportion of their earnings on childcare compared to higher-income families. Additionally, families on universal credit and in work will be supported to meet the cost of childcare.
The report also calls for a more comprehensive review of rates paid to childcare providers, recognising that realising the full benefits of the proposed system would require additional investment. However, it is expected that costs would decrease in response to positive labor market outcomes and improved prospects for children from low-income households.
The proposed system would also help increase the supply and quality of childcare provision in lower-income areas, but the government needs to address the question of provider payments for high-quality provision. Transitioning to the proposed system would require addressing challenges and additional investment, but the model offers significant flexibility to adapt to different funding envelopes and policy objectives.
The education secretary has expressed a commitment to pursuing more comprehensive reform, including an early years strategy later this year. The proposed system, if implemented, could potentially make childcare easier for families to understand and communicate, potentially having wider behavioral benefits.
It is worth noting that the report does not contain information about the suggested maximum cost limit as a percentage of family income proposed by the organisations suggesting this alternative system. The initial cost of the proposed system is expected to be cost-neutral, but could present a net additional cost of £3 - 3.4bn compared to the current system, depending on usage expansion and labour market response.
The report also suggests that the failings of the current system should be considered in the context of the challenges associated with transitioning to the proposed system. The current system, which is complex, regressive, and does not support enough use to help people work or provide sufficient high-quality provision across the country, would be addressed by the proposed system.
Under the proposed system, 60% of families with pre-school children would be better off, with 66% being no worse off. This shift towards a simpler, more progressive childcare system could bring significant benefits to families and the wider economy.
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