23 November 2023

Jeremy Hunt still doesn’t understand the childcare crisis

The Chancellor celebrated his expansion of free childcare – but without further investment the policy is set up to fail.

By Alona Ferber

In Wednesday’s Autumn Statement, amid the jokes about Keir Starmer and the magic, disappearing tax burden act, the Chancellor Jeremy Hunt gave a brief mention of his big March budget policy announcement: childcare reform.

“In the spring Budget I introduced 30 hours of free childcare for working parents of one- and two-year-olds,” the Chancellor told MPs. “That plan, still opposed by the party opposite, starts rolling out in April. It will help tens of thousands of parents return to work without having to worry about damaging their career prospects.”

Making it clear that he wasn’t announcing anything new on this front, he continued: “Today we focus on helping those with sickness or disability and the long term unemployed.”

Hunt’s comments explain why only 7 per cent of voters polled by YouGov and the Early Education and Childcare Coalition (EECC) say they trust the Conservatives the most to help the ailing sector, which is crumbling under the pressure of rising prices and staff shortages.

While campaigners welcomed Hunt’s March reforms, businesses in the sector have been vocal about the shortfalls: namely, that the sector neither has the capacity, staff, nor funding to absorb all the additional children that will be eligible for free childcare hours from April 2024, when the reform begins.

And now, with the Chancellor having announced an increase in the minimum wage to £11.44 from April without any increase in funding rates to early-years settings, companies in the sector will only continue to struggle. According to the National Day Nursery Association, nursery closures were 87 per cent in 2022 than they were in 2021 because of government underfunding of childcare places. Meanwhile, Hunt announced a freeze on alcohol duty, which will cost the government an estimated £310m.

“It is incomprehensible that an ‘Autumn Statement for growth’ would on, one hand, celebrate the planned expansion of childcare support, and on the other hand, go on to undermine the sustainability of the very sector that needs to deliver that,” said Sarah Ronan, director of the EECC. “Clearly, ‘backing business’ means backing pubs, but not the 60,000 businesses in the early-years sector that will need to provide the so-called ‘free childcare’ he has promised parents.”

While the EECC welcomed the increased minimum wage, with the childcare and early-years workforce among the lowest paid in the UK, Ronan said this “has to be accompanied by an uplift to funding rates to cover that rise in staffing costs.”

Campaigners called out the Chancellor for over-promising but under-delivering on childcare. “The last statement promised radical reform – but the evidence has shown that their plan is not deliverable without further investment,” said Joeli Brearley, CEO of Pregnant then Screwed. “By now, the majority of mothers have accepted that even if childcare costs do reduce, the likelihood of getting a place is so slim it becomes almost meaningless. The irony of [yesterday, 22 November] being Equal Pay Day is not lost on us.”

If Hunt’s childcare reform is a genuine effort to fix a broken system, and boost economic growth in the process, it is misguided. If it is a headline-grabbing attempt to woo voters ahead of the next election, a policy with a chance of success might prove more effective.