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The Progressive Policy Think Tank

Devolved funding for childcare in London could lift 2,200 households out of poverty with more mums at work

70 per cent of London’s boroughs don’t have enough childcare for working parents

The number of mums at work in London is the lowest of any region in the UK, due in part to a poorly functioning childcare system. A report published today by think tank IPPR finds that key challenges facing London’s parents include:

  • Childcare costs in London are a third higher than the UK average, locking low earners in particular out of work and suppressing household incomes;
  • London has the second lowest rate of childcare places of any English region after the North East, at 32 places per 100 children under five. And 70 per cent of London’s boroughs do not have enough childcare for working parents;
  • Only around half of local authorities reported not having access to enough childcare for children with specialist needs.

In a new report, IPPR, the progressive policy think tank, urges London’s government to lobby for a new deal for devolved funding to give the Mayor and London Boroughs more influence over the cost and availability of childcare in the capital. If the number of mums at work in London rose to meet the current UK average:

  • 80,000 more parents would be in work;
  • There would be a net gain of £90 million per year for the exchequer and 2,200 households would be lifted out of poverty;
  • If London’s female employment rate caught up with the UK’s top performing regions, this would add £21.5 billion to London’s economy by 2025.

The report also sets out a package of reforms that would increase the effectiveness of London’s childcare and help support working parents.

Clare McNeil, IPPR associate Director for Work and Families, said:

The high costs of childcare and a lack of places are locking parents out of the job market and holding back the capitals economic competitiveness. Children from disadvantaged families are too often being left behind, in poorer quality childcare or receiving no early education at all.

But currently Londons government has limited powers to tackle these problems. The way £1.43 billion of annual public funding for childcare in London is spent is messy, complex and delivers poor value for money.

London would be better able to shape its childcare market if it took on more centralised powers and funding responsibilities. This should be a priority for Londons devolution negotiations with the government.

Sadiq Khan, The Mayor of London, said:

“Too many London parents are locked out of the workplace because of the cost and lack of childcare places available. The benefits of accessible, good quality childcare are clear – increasing maternal employment could benefit the economy by up to £90million, children would have more access to quality Early Years education, and employers would benefit from having skilled and eager parents back in the workplace.

“I welcome today’s report. We urgently need a new deal from the government to give London more powers and resources to improve childcare provision across our city.”

Joanne McCartney, Deputy Mayor for Education and Childcare, said:

“Affordable, quality Early Years education and childcare provision is crucial to London’s infrastructure. It enables parents to work, improves children’s outcomes and helps narrow the gap between disadvantaged children and their more affluent peers.

“As well as providing more good quality childcare places in every London borough and putting an end to London having the lowest maternal employment rate in the UK, we must ensure that there is sufficient childcare for children with specialist needs, and for the increasing number of children whose parents work irregular hours in the capital.”

Caroline Pidgeon, Liberal Democrat London Assembly Member, said:

“This report is incredibly welcome, taking up the concerns I have long raised that London’s maternal employment rate is the lowest of any region in the UK.

“Turning this situation around and helping more parents back to work would bring huge benefits for families, the taxpayer and London businesses.

“The report’s many recommendations, especially in relation to planning policies to ensure an adequate supply of childcare spaces in new developments, must be taken forward by both the Mayor and London Boroughs.”

Ends

Contact:

Becky Malone 07585 772633 r.malone@ippr.org

Editors Note:

  1. Copies of the report “The Future of Childcare in London for the media can be obtained here.
  2. The report sets out a package of reforms to increase the effectiveness of London’s childcare. As well as a new deal on childcare in London, these include:
  • Better use of space
  • Better planning and market making
  • Better use of existing subsidies
  • Improving quality in London
  • Family friendly working in London
  • Regional and sub-regional funding and commissioning structures
  1. IPPR aims to influence policy in the present and reinvent progressive politics in the future, and is dedicated to the better country that Britain can be through progressive policy and politics. With nearly 60 staff across four offices throughout the UK, IPPR is Britain’s only national think tank with a truly national presence.

    Our independent research is wide ranging, it covers the economy, work, skills, transport, democracy, the environment, education, energy, migration and healthcare among many other areas. ippr.org