A ‘childcare revolution’ means public nurseries, not private providers

During the Budget speech last month, Jeremy Hunt announced a massive expansion of free childcare in England. But there’s a catch. This so-called ‘free’ childcare will in reality provide billions of pounds in subsidies to private companies. It was also revealed this week that the Prime Minister is being investigated after he failed to declare his wife’s shares in private childminding agency, Koru Kids – one of the companies that stands to benefit from the recent Budget announcements. Rather than supporting childcare workers and helping parents access quality, affordable childcare, the government’s latest plans for childcare herald a dangerous new era of profiteering and deregulation of childcare services.

Who owns our childcare services?

Government spending on early years provision in England has grown massively over the last 20 years, and around £4 billion was spent funding the current ‘free hours’ entitlements in 2021. However, in the same year, 70% of funded nursery places in England were provided by for-profit companies. This means that, rather than investing in our childcare infrastructure, we are giving more and more money to private providers, with low paid staff and overstretched parents too often paying the price. 

Funding via entitlements means money is allocated by the Government per child and given to childcare providers (such as registered nurseries, nannies and childminders) in return for them providing ‘free’ hours to parents. The funding is administered by local authorities, but councils have no democratic oversight over many aspects of the provision. This includes not being able to ensure the price of hours outside of the entitlements are affordable, and there being no rules in terms of investment in staff training, conditions, and pay.

The Childcare Act in 2006 insisted that councils prioritise early years provision by private or voluntary sector organisations. However, the Department of Education itself recognised in 2010 that private providers are often reluctant to operate in low-income areas and there are significant issues surrounding disabled access within the ‘childcare market’. Underfunding by the Government of the entitlements over recent years has led to mass closures of public and affordable nurseries serving disadvantaged communities, which are less able than nurseries in more affluent areas to cover losses by putting up fees.

Meanwhile, in affluent areas, the service is also not up to scratch for our children. 

Childcare super chains, like Busy Bees, have taken over, despite poor records on safety. This corporate takeover of our childcare system means shareholder profits are being prioritised over staff wages and much-needed investment in early years provision. Research by UCL has shown these childcare super chains lack transparency, pay less on wages, have less qualified staff, and are based on a business model that risks collapse.

This funding model has helped create a situation in which the UK has one of the most expensive childcare systems in the world. A full time place for a child under 3 at one of the big multinational super-chain nurseries, Bright Horizons Spitalfields in London, costs £24,000 per year plus registration charges. Meanwhile, early years workers – 97% of whom are women – often earn less than minimum wage, with just 17% receiving training, and 37% leaving their role within two years.

To qualify for the extra hours of ‘free childcare’ announced in the Budget speech, parents must both earn at least £16,000. Research shows that the latest announcement will therefore disproportionately benefit families with household incomes above £45,000. By contrast, changes to the conditions for Universal Credit mean unpaid, parental care is further de-valued, and that parents of 3-year-olds on Universal Credit will now be obligated to work 30 hours a week – almost full-time – or face sanctions. ​​It seems public money is only available for childcare when it is outsourced.

The 2023 Budget also has a deregulatory agenda. To partly make up for the increased funding gap, there are dangerous plans to increase child to adult ratios for 2-year-olds – which, if implemented, will make settings less safe and more inaccessible for disabled children. There are also financial incentives encouraging childminders to sign up through an agency. This is in keeping with trends over recent years which have seen moves to deregulate childminding. Private childminding agencies were introduced by the Department of Education in 2014 and mean that agency childminders are not individually inspected by an independent body. PACEY, the industry body representing childminders, have raised concerns about the agency model being less effective at ensuring high quality provision. Meanwhile, the latest announcement is likely to benefit shareholders of private childcare agencies, like the Prime Minister's wife.

So what’s the alternative?

We need to understand government-funded early years childcare as a public good for the growth and wellbeing of everyone, and we need to respect the rights of all children to access education. The call for universal early years provision, integrated with local public services, needs to value the work of childcare, both paid and unpaid. We need national pay scales for early years workers as well as increased support for parents during parental leave and to work part time. If the massive childcare chains do crash, we shouldn’t bail them out, like the Australian Government did in 2008, but rather take the opportunity to bring them into public ownership. 

The example of Sure Start children centres shows how universal early years provision can not only help parents back to work, but can also help to nurture families. Since the introduction of austerity, more than a third of Sure Start centres have had to close, at a cost to children’s health and development. Focused on early years (0-5), these centres provide a space for new parents to meet and find community. Sessions are run by qualified early years staff, who are alert to spotting signs of postnatal depression and domestic abuse; they are able to signpost support as well as provide developmental help.

As part of the roll out of the Sure Start programme, children centres in deprived areas also had council-run day nurseries attached. Those that remain continue to provide affordable and high-quality care, as well as Special Education Needs support, crucially integrated with other council services. Sure Start was also given a remit to help set up and develop childminder networks, supporting childminders with training, and advice.​​​ Taking this one step further and helping to set up cooperatives – creating childcare that works for both parents and early years workers (and early years workers who are parents) – could be money well spent.  

Public nurseries, often located in less affluent areas, have consistently proven to offer high-quality early years education and to support a greater proportion of children with special educational needs. Today, public nurseries are limited to council-run day nurseries and what remains of the maintained nursery schools. They are vital, but there are just 385 maintained nursery schools left, and last year over half of these were in deficit. The National Education Union recently voted to fight to protect these nurseries nationally and locally, and called on leadership members to refuse to implement newly proposed child to adult ratios. 

In 2020, the New Economics Foundation proposed a local authority and worker buy-out option at the point of sale – something that could address further growing monopolisation of childcare by big chains. They also proposed a Childcare Infrastructure Fund to stop further closures of nurseries. This fund would have helped childcare settings, including childminders, to cover their overheads providing certain conditions were met, such as paying the real living wage to all workers and not giving profits to shareholders. Rather than calling for better funded entitlements, as the industry lobby is, we should be calling for a shift to direct and conditional investment like this.

We must support and expand the remaining public infrastructure across the country to provide settings in childcare deserts, including in rural areas which have historically been overlooked, but also in affluent areas – a necessary part of the process of seeing early years education as a universal right. After a victory for campaigners last year, childcare provision was recognised in the government’s definition of ‘infrastructure’ and therefore qualifies for money in local infrastructure projects. However, we now need changes to the Childcare Act 2006 to make sure this public money doesn’t get syphoned off to private investors. This money should not go to private chains like Bright Horizons or Busy Bees. Instead, it should enable local authorities to establish, support, and extend council-run childcare services that serve the whole community.

A ‘childcare revolution’ also needs to fight deregulation and include all childcare workers, regardless of immigration status. Migrant women are disproportionately represented among live-in domestic worker roles, including au pairs and unregistered nannies. These roles are currently excluded from crucial parts of UK employment law, such as the national minimum wage and sick pay. We must end the hostile environment in childcare services and include all childcare workers in our vision for universal, public childcare provision that prioritises people, not profit.

Quality childcare, by trained staff,  is always both education and care, and has huge benefits for childhood development. If we don’t fight for these changes, our early years services in England will keep prioritising shareholder profits over the education of children, and rights of childcare workers, across the country. Those who cannot afford expensive alternatives will be forced to rely on less safe, less enriching childcare options. The fight for public early years support should concern everyone who was once a child.
 

Dr Louise O’Hare is a policy researcher and organiser with SEND Crisis Tower Hamlets and Post Pandemic Childcare Coalition.

Post Pandemic Childcare Coalition is building a grassroots network of childcare workers and parent campaigners, supporting local campaigns for public nurseries, and calling for direct funding and recognition of all forms of childcare work. You can find out more and register for their next meeting here.