A nation of carers: facing up to the childcare challenge
In the Spring Budget, the Chancellor announced “landmark” plans to extend free childcare in England. But is this another political play, or meaningful progress? Audley’s Senior Policy Advisor, Emily Benn investigates.
Each year, Chancellors of the Exchequer attempt to pull a political “rabbit out of the hat”; a moment where they surprise everyone with a popular policy to grab the positive headlines unexpectedly. In 2023, it was the turn of childcare, as Jeremy Hunt announced a series of measures to seek to address an issue that has become one of the most contentious of the political climate. Measures announced included an expansion of free childcare hours for younger children, a change to the ratio of staff required to look after each child, as well as other changes to try and increase supply and reduce costs.
Even many in the Government, however, will admit that these measures alone are not enough to tackle what has become an increasingly unaffordable and dysfunctional childcare sector across Britain. The need for urgent reform could not be more obvious. Recent research by the ThinkTank Onward showed that the average UK couple spends 26% of their household income on childcare compared to 14% in the USA, 12% in Canada and 9% across the OECD. The average price for a part-time nursery place of 25 hours a week for a child under two is £140 per week; somewhat unsurprisingly, these costs make it economically unaffordable for some joint couples to work. Even more unsurprisingly, it is women’s employment opportunities that are consequently disproportionally impacted.
Despite the Chancellor’s announcements, childcare is unlikely to leave the political spotlight. The Labour Party has made clear it will be a central tenant of its future manifesto and election campaign. Shadow Secretary of State for Education, Labour MP Bridget Phillipson, recently outlined her and Labour’s approach at the launch of the Onward report - promising more radical, fundamental reform of the sector. She noted that in the 100 most marginal seats the Conservative Party is defending in the next election, parents of children under eleven make up over a quarter of the electorate. Polling by firm Survation indicated that a significant majority of voters in “Red Wall” seats - those seats that will likely decide the make-up of the next Government - support a policy of free universal childcare.
Enter a potential solution in the somewhat unlikely shape of Uber. It is not a company many would immediately think of as being at the most progressive end of employers; this is, of course, the company that fought numerous court battles arguing its drivers were independent contractors, rather than employees entitled to various employment protections.
Yet this month it announced a partnership with childcare provider Bubble - where it will provide drivers with 10 hours of free childcare. Drivers on Uber’s platform have greater earnings at the evenings and weekends; exactly the time that nurseries are closed. A pilot programme so far, it is just one example of a trend for companies looking to provide extra support as part of their employment offer - in the hope of attracting, and crucially retaining, staff - an issue that has significantly affected the company (it was only last Autumn that Uber announced it had reversed the steep decline in drivers it saw during the pandemic).
Audley spoke to Sarah Hesz, CCO at Bubble Childcare, which provides flexible childcare options for employees and partners with leading employers. She told us that employees are increasingly looking for employers who understand the multiple pressures many working parents face, and who provide practical help to make things easier; in this instance, helping to provide flexible childcare options and redesigning their wider corporate packages.
Their research is pretty overwhelming: 87% of parents say childcare support would make them more loyal to their employer, and 75% of parents say better childcare support would make them more productive. And far from struggling to retain and recruit sitters, Bubble told us that they are inundated with qualified staff, suitably background checked, who are available to help. From teachers and nursery assistants to other support staff - this provides a flexible way to earn extra money, to help meet their own financial demands.
Much of the debate about employee productivity loyalty has been dominated by arguments for working from home and greater location flexibility. But companies are increasingly looking to provide wider packages of support. The Financial Times recently reported on the growing number of businesses that offer mental health support, and counselling in-house as standard.
How much do these extra support packages really contribute to employee loyalty? Are perks such as childcare and on-site therapists going to make any difference once in a financial environment this squeezed?
For all the talk of corporate perks - do employees, particularly in this economic climate, really only care about pay and working conditions? Much has been noted about the dire state of UK real wage growth over the past decade, with the Resolution Foundation research showing the average British worker is £11,000 worse off than they were before the Financial crisis; as Resolution noted, this situation is “almost completely unprecedented”. Yet for many companies, the “Great Attrition” period has shown that non-financial benefits really do matter when it comes to employee loyalty; and understanding the multiple pressures faced by employees, and placing a wider emphasis on wellbeing, has been crucial.
Leaders are going to have to think increasingly hard about what wider support their employees will come to expect; the days of private health insurance alone being enough to win a talent war may be over.
This is a wider argument for another day - but the dynamics and trends in the childcare sector bear more than a passing resemblance to another great social challenge in British public policy; social care. The challenges are the same: a sector with high levels of low pay, huge staff turnover, providers facing significant financial issues, and widespread concern about the quality and skill of provision - with massive regional variations. Along with a protracted political problem, where cross-party, long-term consensus for reform is seemingly impossible to come by, so needed reform is ignored. Plus recent interest by private equity groups, that have done nothing so far to raise investment levels.
Even a casual glance at Britain’s demographic profile will show just how stark our ageing population is going to put huge pressure on our social and elderly care sectors, as well as put huge pressure on those in the middle - often juggling caring responsibilities both “upwards and downwards” across the generations. You never know: along with health insurance, and free childcare, emergency support packages and hours for elderly relatives may be the next big benefit employers provide.
By Emily Benn, Senior Policy Advisor, Audley