The UK is losing up to £38bn worth of economic growth a year to inadequate childcare, exclusive figures reveal.
A report from the Center for Progressive Policy (CPP) think tank, shown to Sky News, shows that the lost economic performance is between £27 billion and £38 billion, equivalent to 1% of GDP.
Their figures are translated from the results of a survey of 2,545 mothers, which showed that 27% of them said they would like to work more hours if they had access to adequate childcare.
Had those hours been realised, it would have resulted in at least £9.4 billion in extra earnings a year, with an estimated economic output of 1% of GDP.
The CPP has described the figures as “conservative” estimates and calls for childcare to be seen as a physical infrastructure.
Ben Franklin, director of research and policy, described it as a “great economic reward”.
“Right now, the government can take out loans to invest in hard physical infrastructure like railroads and roads,” he said, “but we believe there is a strong economic case for treating childcare the same way.
“The benefits that can be achieved through maternal support and employment are significant.
“And profits over a child’s life, developing one’s own abilities in education and the country’s future human capital.
“So we believe that childcare should be treated the same as other forms of helmet infrastructure, which are often perceived as sexier in the corridors of power.”
Based on the results of the survey, the CPP also estimates that an additional 540,000 mothers have been deprived of paid employment.
It also found that 880,000 reduced their working hours and 470,000 quit their jobs.
Cherry Fitzsimmons is a pediatric occupational therapist in London – a sector understaffed in the NHS – who gave birth to twins last year.
She describes the “madness” of a “flawed system” that forced her to take an additional six months of unpaid leave due to childcare costs.
“In my area (at work) we look at recruiting abroad and pay for visas from our budget,” she said.
“It’s just ironic that my team pays for visas for people coming from other countries to help fill the gaps, but then I can’t work because I can’t afford it because of this childcare system.”
She says she will spend around £100,000 on nursery fees by the time her three children go to school.
“I think the government knows it’s not working,” she said, “and it feels like negligence when they just don’t do anything about it.”
Three- and four-year-olds in England are entitled to 15 or 30 unpaid hours a week, depending on whether their parents work.
However, the financial resources provided to nurseries to cover these costs are often insufficient.
“I get more money for cleaning toilets”
Kate Wright, who runs Little Buddies kindergarten in Lowestoft, had to take on extra work as a cleaner to help pay staff’s salaries.
“I get more money cleaning toilets than I do working and running a business,” he tells Sky News.
Living wage is due to increase in April and says it is “starting to get really worried”.
“This goes up by 92p an hour, remember we have six employees who work six hours a day for 38 weeks a year and the funds don’t go up in line with that.” she said.
“The ratio for two-year-olds is one to four, and funding for two-year-olds is only increasing by 17p an hour, which is only 68p – so where does the 24p deficit come from to pay staff members?”
Data from the Early Years Alliance shows that more than a third of childcare facilities say rising costs are likely to force them to close this year.
Claire Richmond, who runs Little Goslings in Coventry, says three staff have left to work at Sainsbury’s.
“People are leaving the sector and taking jobs at Sainsbury’s for more per hour,” she said.
“Because the responsibility and responsibility that is placed on us is huge. These things rightly should be in place, we are very happy to get them done.
“But we just need the right amount to fund the amazing staff… the numbers just don’t add up.”
She says her nursery is just breaking even and calls for the abolition of business rates for childcare facilities as financial aid.
“On the Edge of Falling”
Joeli Brearley of campaign group Pregnant Then Screwed describes the childcare sector as “on the brink of collapse”.
He says the system is also exacerbating gender inequality due to the “great exodus of women from the labor market”.
“The UK lacks a skilled workforce and at the same time we know we have hundreds of thousands of women who are now stay-at-home mothers who are desperate to work but cannot afford it,” she said.
A Department for Education spokesman said: “We recognize that families and early years settings across the country are facing financial pressures. That’s why we’ve spent over £20 billion over the last five years to support families with childcare costs.
“This government has doubled entitlements for working parents of three-year-olds to 30 hours and introduced 15 unpaid hours a week for disadvantaged two-year-olds.
“In addition, working parents on Universal Credit may qualify for up to 85% of childcare costs through Universal Credit to help support childcare costs.”