Britain sets out plans to bring down cost of childcare

·2-min read
Mother priced out of work by childcare costs in Britain

By Kylie MacLellan

LONDON (Reuters) -Britain will expand free childcare to children from 9 months old in England to help families who currently pay some of the highest costs in the world, finance minister Jeremy Hunt said on Wednesday.

As part of a plan to encourage more people back into work, Hunt said the government would provide 30 hours of free childcare per week to eligible working parents of children aged under five by 2025.

That will expand, in phases, a provision that is currently only available to the parents of three- and four-year-olds.

The government has been forced to act after British childcare costs rose steadily to become among the most expensive in the world, according to the OECD, taking up nearly 30% of the income of a couple with two young children.

"I don't want any parent with a child under 5 to be prevented from working, if they want to, because it is damaging to our economy and unfair, mainly to women," Hunt told parliament, setting out his budget plan.

Hunt said he would increase funding to nurseries for the existing free hours by 288 million pounds ($350 million) in 2024-25, in addition to more than 4.1 billion pounds by 2027-28 to fund the expansion of new free hours.

He also said minimum staff-to-child ratios for two-year-olds in England would be changed to 1:5 from 1:4, although these would be optional. The change, first proposed last year, has been criticised by providers who say it would damage quality.

The Office for Budget Responsibility said the expanded free childcare was the budget policy with "by far the largest impact on potential output", estimating that by 2027-28 around 60,000 parents of young children would enter employment.

Campaign groups and the opposition Labour Party have called on the government to go further in easing childcare costs, with providers saying the existing funding does not fully cover the cost of the free hours they have to provide.

The Early Years Alliance, which represents childcare providers, said the new increase in funding was not enough.

"Expansions of so-called 'free childcare' without adequate investment are a recipe for utter disaster," Neil Leitch, CEO of the Early Years Alliance said.

The government also said it would fund schools to provide wraparound care, with the aim that all will do so either on their own or in partnership with other schools by Sept. 2026.

($1 = 0.8228 pounds)

(Reporting by David Milliken, Kylie MacLellan and Muvija M; Editing by Alistair Smout and Kate Holton)