Commission an independent review of childcare funding and affordability

We have the second most expensive childcare system in the world. A full time place costs, on average, £14,000 per year, making it completely unaffordable for many families. Parents are forced to leave their jobs or work fewer hours, which has a negative impact on the economy and on child poverty.

Childcare workers are paid so badly that 1 in 10 are officially living in poverty. Meanwhile, a lack of funding has resulted in 2,087 childcare settings closing in England in the first 3 months of 2021 when provision was already low. Without good quality, affordable childcare the 'levelling up' agenda will fail. An independent review would explore what the Government needs to do to ensure we have a childcare sector that works for families, children and the economy.

We know that the cost of childcare is a key concern for parents which is why the government has made an unprecedented investment in childcare over the past decade.

All three- and four-year-olds in England are entitled to 15 hours of free childcare each week, providing children with high-quality early education and helping parents to return to work. Disadvantaged families in England are also eligible for 15 hours of free early education a week for their two- year-old children.

30 hours free childcare was introduced in England in September 2017 and is an entitlement for working parents of three- and four-year-olds, benefitting around 345,700 children in January 2020. It aims to help working parents with the costs of childcare so they can take up paid work if they want to or can work additional hours. To be eligible, both parents, or a single parent, must earn the equivalent of 16 hours a week at national minimum/ living wage (for parents aged 23 or over, this would work out at just over £7,400 per year) and less than £100,000 per year.

All the department’s entitlements provide free early education for parents across 38 weeks of the year. They can also be “stretched” if parents wish to use fewer hours over more weeks and this is an option their childcare provider offers.

We have spent over £3.5bn in each of the past three years on our early education entitlements and the government continues to support families with their childcare costs. The Chancellor announced on 25 November 2020 a £44 million investment for 2021-22, for local authorities to increase hourly rates paid to childcare providers for the government’s free childcare entitlement offers.