Labour pledges to extend free childcare

30 May 17

The Labour party has promised to extend 30 hours of free childcare per week to all two to four-year-olds, as part of their £5bn investment in childcare.

Labour announced today that it wants to get rid of means testing for two-year-olds and remove restrictions for children aged three and four whose parents are working.

This follows their manifesto pledges to reform childcare and support Sure Start programmes, which was given a total cost of £5.3bn.

However, in an interview on BBC Radio 4’s Woman’s Hour this morning the Labour leader was unable to quote the figures of how much this policy would cost.

He said “it will obviously cost a lot to do so, we accept that", before agreeing that figures quoted from Labour’s shadow, education secretary, Angela Rayner, of £4.8bn and half a billion to reverse cuts to the Sure Start scheme were “correct”.

Corbyn said this would help up to 1.3 million children across the country and his policy would end the “patchy” childcare support which is holding back families.

“The Labour party believes every child, no matter what their background, deserves a good start in life, and that childcare costs shouldn’t be a barrier for parents who want to go back to work,” he added.

Currently all three- and four-year-olds in England are entitled to 570 hours of free early education or childcare per year, which works out as 15 hours each week for 38 weeks of the year.

The coalition government expanded this to the most deprived two year olds and from September, three and four-year-olds in England will be entitled to 30 free hours of care per week in term-time.

The government also introduced a new scheme for tax-free childcare, aimed at working parents earning less than £100,000 a year each.

While parents who are eligible for universal credit can claim back up to 85% of their childcare costs.

Rayner said: “The Conservatives’ 2015 promise to provide parents 30 free hours of childcare a week has unravelled, as they have failed to give the policy the funding it needs.

“Too many parents have been let down, unable to go back to work due to the cost of childcare.”

According to Labour, currently, only 40% of two-year-olds qualify for childcare and many working parents with three and four-year-old children are not getting the childcare they were promised by the at the last election because of the complexity of the rules.

In addition, government cuts have also led to the loss of 1,240 Sure Start centres – Labour have committed to providing more money for Sure Start to reverse some of the closures.

The Localis think-tank has analyised Labour's annoncement and concluded the party "severely underestimated" the true costs of this policy to extend childcare.

Researcher Kulvir Channa said: "We estimate that the costs of extending 30 hours of free childcare to all 2 to 4 year olds is £7.5bn, not the £4.8bn claimed by the Labour Party."

Localis have calcudated the costs using current government funding allocations: £4.94 (including the Early Years Pupil Premium) for three and four-year-olds and £5.39 for two-year-olds.

They also argue that Labour have consistently claimed that the “free hours entitlement is chronically under-funded”, suggesting that they would increase these allocations.

An increase of £1 in per hour per child funding allocations would cost the government £8.9bn.

Earlier this year the think-tank called for an alternative arrangment, rather than a universal extension of free childcare, that would place a lot of pressure on the Treasury, they proposed for government to reverse its planned extension of additional childcare hours for working families of three and four year olds and instead invest in means-tested free childcare.

Channa said: "Combined with current universal provision of 15 hours for three and four-year-olds, this would offer low income families with 15 free hours of childcare for one and two-year-olds, and 30 free hours of childcare for three and four-year-olds.

"Such a proposal would cost significantly less than Labour’s proposal and, combined with the reversal of government’s planned extension, would save the Treasury an estimated £64m." 

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