"Free childcare scheme 'closing' nurseries, education charity says"

From the BBC:

A scheme offering 30 hours of free childcare a week has had a financial impact on providers, a charity says.

It's not a charity, it's a trade body/lobbying group, but their point stands.

The government pays a national average of £4.98 per hour for places to local authorities, of which a minimum of 94% is passed on to providers.

As background, until a year ago, parents received a subsidy for 15 hours 'free' nursery care but at a higher hourly rate. Of all the various overlapping schemes for subsidising private childcare, this was the best, being universal, non-means tested and with a minimum of bureaucracy. (Even better/cheaper would be more pre-school places at local state primary schools, but that's a separate topic).

The [Pre-School Learning Alliance] charity surveyed 8,000 nurseries and childminder firms between 17 July and 23 August.

It received answers from 1,662 providers and found 46% of them felt the scheme "had a negative financial impact on their business", while two-thirds said funding for child places did not "cover the full hourly cost of delivering the places"...

It doesn't take a rocket scientist to work out that price controls (which is what this boils down to) will increase demand and reduce supply (unless it simply prevents rent-seeking, in which case the impact on supply is negligible, but that does not appear to be the case here).

In a statement, the DfE said it had provided "£1bn extra funding a year to deliver all of this government's free childcare offers... We continue to monitor delivery costs and we have commissioned new research to provide further information on the costs around childcare," it added.

The DfE said parents were saving up to £5,000 a year on childcare costs.

That "saving" consists of two things - the amount by which nurseries' incomes are squeezed and the value of the subsidy, which those working parents are partly paying for through their taxes anyway.

Reader's Letter Of The Day

From yesterday's Metro, on the topic of the Thai cave rescue:

Perhaps attention will now turn to how the boys got there in the first place.

Derek Gomer, Pontypridd

Subsidies for childcare costs.

My article is now up at the Citizen's Income Trust's new look website.

"Call to align nursery and primary school teacher status"

From the BBC:

Nursery school teachers should be given the same status and pay as those in primary school, the Pre-School Learning Alliance has said.

It said early-years teachers were being "locked out" of teaching in primary schools, even in reception classes.

Nursery teachers were very disheartened at the government's failure to bring the two sets of teachers' status in line, said the charity.

But the government pointed out that early-years teachers were probably just a bit irritable because of the heat wave.

"Maybe it's time for their glass of milk and afternoon nap," added the spokesman for the DfE. "We'll do some finger painting later on, that usually cheers them up."

Amazing videos of David Cameron and Nick Clegg swapping a black V-necked jumper

The video filmed this morning shows us Clegg in the black;


Later in the day, Cameron calls dibs and takes it off him because it's getting a bit chilly, Clegg shivering just in a shirt:


The BBC's evening news showed the whole shuffle. Video not yet available on BBC iPlayer, the sequence started at around 19:24 with Cameron in the jumper and Clegg shivering; Clegg is back in black in time for the interview with Nick Robinson at around 19:25.

Childcare Costs

From the BBC

Anand Shukla, chief executive at the Family and Childcare Trust, said: "When even part-time childcare costs outstrip the average mortgage for a family home - and many parents have to spend more than a quarter of their income on childcare - it's clear that our childcare system isn't fit for purpose.(1)

"We need a... system that helps parents who want to work and contribute to the economy and gives children the best start in life."(2)

And he called for all political parties to commit to a long-term strategy that delivers for parents, providers, and children.(3)

The report called for better use of school premises and children's centres to provide childcare, and for the government's contribution to costs to increase.(4)

1. Well, considering that Anand Shukla doesn't seem to support increasing ratios and seem to be opposed to deregulation, the system is as good as it's going to be. The ratio is currently 1:4. Even if you're paying someone minimum wage to look after kids, there's still the thing of running the business, providing facilities following all the bureaucracy etc. So, let's say double minimum wage. In which case, 1/4 of the average salary doesn't sound too far wrong.

2. Define "economy". For a lot of women, it makes more economic sense to be a housewife, and once the kids go to school, to get a part-time job. Houses have to be cleaned, meals cooked etc. That's all productive work.

3. As the Family and Childcare Trust don't want any sort of reduction in ratios or deregulation, I presume they simply mean subsidy.

4. Why should government contribute more? If it's more economical for women to stay at home and raise the kids in early years, what's wrong with that? Sure, for some women the economic value of going to work outstrips the value of being at home, but for a lot of them, it doesn't. And a lot of couples value spending time in early years with the kids rather highly (I know a programmer who quit for 5 years and is now trying to get back in).