Women in the labour market

Boosting mothers’ employment and earnings through accessible childcare

14 October 2021

By Ben Franklin and Dean Hochlaf

5 minute read

As part of the Centre for Progressive Policy’s (CPP) Women in the Labour Market programme, this report explores how inadequacies in the childcare system act as a barrier to women’s participation in the labour market. It provides estimates of the potential economic gains to be made in the short and medium term via an assessment of the lost earnings women face from lack of access to childcare. While there are certainly wider questions over the organisational challenges facing the childcare sector and its role in supporting child development, this report looks at the challenge through the prism of women in the labour market and how policy can ensure every mother has access to high-quality, affordable childcare.

CPP is also publishing an essay by Rebecca Swindells Childcare from the perspective of a nursery owner which highlights the impact of a lack of government support for the childcare sector.

Childcare as a barrier to work

New survey evidence from 2000 mums reveals that, among mothers across the UK, 46% “struggled to find suitable childcare”. Among those who reported struggling with access to childcare, it was found that:

  • 46% were prevented from taking on more hours at work (equating to 1.7 million women)
  • 34% were prevented from taking a potential job (equating to 1.3 million women)
  • 30% had to reduce the hours that they worked (equating to 1.1 million women)
  • 15% had to quit their job (equating to 560,000 women)

New analysis estimates that if women had access to adequate childcare services, and were able to work the hours they wanted, they would increase their earnings by between £7.6bn and £10.9bn per annum - generating up to £28.2bn in economic output per annum. This represents only the short-term gains of tackling under-employment.

Why is childcare failing working mums?

Despite various initiatives aimed at improving access to childcare, inadequate funding and resourcing has left the sector struggling to meet demand, undermining the benefits of policies that are meant to help working mothers. Among advanced OECD economies, the UK spends the second least amount on childcare, less than 0.1% of GDP.

It is vital that the capacity of the childcare sector is boosted and the economy as a whole adapts in order to meet the needs of working mothers. CPP’s survey reveals that working mothers want more support for childcare, not only in terms of access to provision, but from their employers too. From a range of options, mothers opted for their top three ways in which the government could support them in employment, with:

  • 54% prioritising extension of free childcare entitlements from 38 to 52 weeks
  • 53% prioritising enhanced flexibility from employers for those with children aged under 10
  • 49% prioritising greater availability of before and after school care

Recommendations

Reflecting the needs and expectations of working mothers, this report puts forward a series of recommendations aimed at bolstering capacity, expanding entitlement and ensuring that every working mother is entitled to flexible working arrangements that improve access to childcare and support them in the workplace.

Fair funding for subsidised care

  • Implement a new audit process to determine the cost of delivering subsidised care so that the government pays a fair price. Ensuring that providers receive a payment that fairly reflects the cost of care will help reduce financial pressures and improve the capacity and resources of providers at a cost of between £509m and £801m.
  • Increase the amount of subsidised care for children aged three and four from 570 to 720 hours a year. An additional 150 hours of care would mean 15 hours extra for ten weeks which would help parents access childcare through the holidays at an estimated cost of £700m.
  • Introduce a 720-hour subsidised care package for children during the first two years of their life. Children under two have no access to subsidised care which can make the transition back into work for mothers a challenge. A funding package of £1.8bn should be made available to provide 720 hours of free care during the first two years of a child’s life.

Increasing capacity in the childcare sector

  • Establish a central government fund to invest in after-school activities and holiday care. Building on previous CPP work, a £1.1bn fund should be used to invest in the creation of a million after-school and holiday childcare places.
  • Create a new ‘What Works Centre’ for childcare. What Works Networks have a track record of investigating best practice across a wide range of policy areas, and one should be created with a specific focus on the childcare sector, evaluating evidence for how policy can improve outcomes for providers, parents and children.

Improving working conditions in the childcare sector and beyond

  • Establish a new ‘Skills for Childcare’ organisation. A dedicated, independent institution should be created to work in partnership with the Department for Education and childcare sector to collect information related to the quality and developmental needs of the childcare workforce.
  • Introduce a right to a 20-day trial period for workers who have requested flexible working arrangements. While employees may have the right to request flexible working arrangements, this can become a right to reject among employers. We propose giving workers the right to trial their preferred arrangement, to provide clear evidence on whether flexible working requests are viable or not.