News analysis Family friendly policies that dont quite add up

9 Dec 04
Gordon Brown delivered his Pre-Budget Report last week with one eye fixed firmly on the general election widely expected next May.

10 December 2004

Gordon Brown delivered his Pre-Budget Report last week with one eye fixed firmly on the general election widely expected next May.

Support for families is shaping up to be a major battleground and the chancellor made sure there was plenty to keep the parents of Middle England on side.

He outlined a ten-year strategy to make an affordable childcare place available to all three-to-14 year olds by 2010.

Much of it will be delivered in the form of 'wraparound' services by schools, which will open from 8am to 6pm on weekdays all year round to provide pre-and after-school care.

Brown told the House of Commons on December 2 that economic success over the next 20 years depended on 'investing in the potential of all children'.

He added: 'Improvements in the availability, affordability and quality of pre-school and after-school care are required to meet the needs of working parents struggling to balance the demands of employment and of family life.'

The strategy, which has been trumpeted repeatedly by ministers this year, has been backed by professionals and experts alike.

But, as ever, there are question marks over whether it will be properly funded.

In his statement, Brown said the government's commitment to child care would be worth an extra £600m a year by 2007/08. This is in addition to the £4.4bn annual total already pencilled in.

An annual £125m transformation fund, starting in April 2006, will invest in training and provision to ensure high-quality care is offered.

Much of the rest of the money will go on increasing the childcare element of the Child Tax Credit to £175 per week for one child and £300 per week for two or more.

The government believes that once services are up and running they will be sustained by parental contributions, and this money is intended to fund provision for families on low and middle incomes.

Brown's funding package seems impressive – until it is put in context. The childcare charity, 4Children, has carried out its own research and has come up with some sobering figures.

Currently, around 7,000 schools offer some form of extended care provision, but to meet Brown's pledge they will all have to open from 8am to 6pm. A further 13,000 schools will have to put these services in place.

The charity says it will cost £8.4bn to deliver the government's childcare pledge by 2010, which works out at £1.4bn per year for the next six years.

It says that if the government meets its interim target of 50% of schools offering wraparound care by 2008, it will take £1.7bn in each of the three years up to 2010 to finish the job.

Graeme Cooke, 4Children's senior policy officer, told Public Finance that the charity also has doubts about the government's strategy, because of the uncertainty caused by a demand-led funding regime.

'If you want a systematic, planned childcare market there are questions about whether the tax credit can sustain the services once they are up and running,' he said. 'What the government hasn't said is we will give each school X amount to do this.'

There is nervousness among education leaders, too, that the money will not materialise. John Dunford of the Secondary Heads Association has called on ministers to take a tough line with local authorities to ensure they pass on the resources that have been earmarked.

'It is imperative that all this funding reaches schools. Local authorities must passport all the money to schools if heads are to have the funding tools to do the educational job that is expected of them,' he said.

The Local Government Association, meanwhile, has raised concerns of its own. 'Funding will be essential not only to set up new childcare facilities but also to train and retain the workforce for these new places.'

There is widespread recognition that the government has launched an ambitious drive to reform childcare in the UK and Brown's Pre-Budget Report is a significant down-payment on that. But it will have to be matched in future years.


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