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£1bn scheme to boost childcare will create 'only modest' rise in parents working

Published 02/12/2016

The key impact of the change would be financial, saving parents around £410 a year in childcare fees, researchers said
The key impact of the change would be financial, saving parents around £410 a year in childcare fees, researchers said

A £1 billion Government scheme to boost childcare for three and four-year-olds will deliver only a "small" increase in parents working, a new study has found.

Education Secretary Justine Greening says that increasing these children's entitlement from 15 to 30 hours a week in England is designed to "break down the barriers to work, so that parents who want to return to work or work more hours can do so".

But researchers from the Institute for Fiscal Studies and the universities of Essex and Warwick found that the change - due to be introduced next year - was likely to lead to only "a modest number of mothers and no fathers" moving into paid work.

Instead, their analysis suggested that the key impact of the change would be financial, saving parents around £410 a year in childcare fees.

The researchers looked at changes in parents' working patterns when their children reach primary school age - effectively going from 15 hours a week of state-funded childcare to 30-35 hours a week of state-funded education.

They found that there was "no noticeable impact on fathers' working patterns or those of mothers with other children under the age of four".

But there was a stronger impact on mothers with no younger children, with the proportion working increasing from 58% to 61.5% - the equivalent of around 12,000 more women in work.

In many cases, starting school did not increase the number of hours children were looked after by someone other than their parents, but simply substituted the classroom for paid-for childcare or informal childcare, often provided by grandparents.

Although four-year-olds were effectively receiving an additional 600-800 hours a year of free childcare when they started school, the amount of additional time they spent in childcare of all kinds increased by just 76 hours a year, the researchers found.

The report suggested that the free childcare extension may have a larger impact on parents' working patterns, because of the flexibility they will have over when they use the hours. But it warned the impact may also be smaller, as the 30 hours of childcare on offer was less than a full school week.

One of the authors of the research, IFS senior research economist Sarah Cattan, said: "The Government expects to spend close to £1 billion extending the number of free hours of childcare available to working parents of three and four-year-olds in England from 15 to 30 a week during term time.

"Our research suggests that this is only likely to lead to a modest number of mothers - and no more fathers - to move into paid work.

"Offering free childcare does, of course, save money for parents who already use formal childcare.

"But to facilitate parents' ability to work further, the Government's various childcare subsidies may need to enable families to access sufficient hours of free or subsidised childcare throughout the year."

A Department for Education spokesman said: "Helping families with the cost of childcare is at the heart of this Government's agenda. We know that free childcare helps to remove the barriers to getting parents back into work - that's why we are investing a record £6 billion per year by 2020.

"We are already trialling our 30 hours offer - which is set to save working parents around £2,500 per year - in a number of areas across the country and thousands of children are benefiting."

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