The poorest parents in Britain must spend three times as much of their income on childcare as the richest households, a think-tank has revealed. The Social Market Foundation reveals the extent of childcare poverty in the UK, as it publishes full findings of analysis for a cross-party Commission on Childcare led by Conservative and Labour MPs.
The commissioners, John Penrose MP and Siobhain McDonagh MP, are working with the SMF to analyse the impact of poor childcare provision on wages and poverty, and ways to improve provision. SMF analysis further shows that a third of the poorest who are using childcare are in ‘childcare poverty’, meaning they spend over 20% of their household income on the service.
SMF analysis of data from the official Family Resources Survey shows that parents from the lowest income group who use formal childcare spend 17% of their net household income on childcare. For parents in the highest income band, the figure is 5% percent.
While higher-income parents are more like to use formal childcare, many of the poorest parents still face high financial costs for childcare. 52% of parents who have young (0-4 years) children and household incomes of less than £10,000 are paying for some sort of formal childcare.
The findings come at a time of year when childcare needs are peaking, and costs are mounting – Government has recently announced changes to the system that will eventually cut childcare costs. The SMF’s policy paper, to be published in Autumn, is set to provide solutions to the mounting crisis of inadequate childcare provision.
Even though childcare makes up a greater share of their household income, they are getting far fewer hours of the service, the SMF calculated.
The unaffordability of childcare further affects the economy and maintains gender inequality, as SMF’s analysis found childcare costs were the leading reason among mothers of young children to not be in work. Over half (54%) of part-time working mothers who wished to work more also said they needed affordable childcare to increase their hours.
The SMF’s Commission on Childcare is taking evidence from key stakeholders (See notes for the call for evidence) and make recommendations later this year on how to make Britain’s childcare provision work better for families and the economy.
Scott Corfe, SMF Research Director, said: “Quality, affordable and accessible childcare is vital to social mobility and gender equality. At present, far too many are paying through the nose, and yet not receiving nearly enough of it.
“It is imperative that the childcare market is fixed. Low-income families should not have to spend such a large portion of their income on it, and parents should not have to sacrifice their careers for it.”
“Britain urgently needs solutions to prevent the childcare poverty gap from widening with the cost-of-living crisis, Our new cross-party commission will provide some answers to deliver the high-quality and affordable childcare that Britain needs.
John Penrose, Conservative MP for Weston-super-Mare, said: “Affordable childcare is absolutely essential for any parent with not-yet-independent children who doesn’t want to put their career on hold. It’s the way to smash the glass ceilings that prevent many parents, particularly single parents and working mums, from improving their pay or winning a promotion.
The SMF Commission should dovetail with the Government’s commitment to cut childcare costs by diagnosing and then treating the causes of UK childcare poverty. The effect on levelling-up life chances and earning power across the country should be electric.”
Siobhain McDonagh, Labour MP for Mitcham and Morden, said: “These shocking findings expose the urgent steps that need to be taken by Government to close the inequality that is the cost of childcare poverty gap. This new Commission will work cross party to help find those desperately needed policy solutions.”
