Wednesday, 28 January 2009

Fakecharity, Blulabour miss the point

The BBC informs us that Childcare fees continue to rise. "Many parents in Britain are paying in excess of £8,000 a year for a full-time nursery place, a survey suggests", which is probably factually correct.

What strikes me is that £8,000 (which is on the high side, see comment from Beverley Hughes, below) is more than typical school fees at better-value private schools. So, if parents can afford to pay for nursery places, is it unreasonable to assume that most of them could also afford to pay for private schools?

As I have discussed before, there are loads of overlapping schemes to subsidise nursery care, which average out at about £70 per child per week (which is what makes nursery places affordable for most). To save all the admin and faff and distortions, I think they should be replaced with flat rate vouchers of £70 per child per week, but hey.

To summarise, the vouchers system 'works' for private nurseries (although with flat rate vouchers it would work much better). The obvious conclusion is that we could replace the whole State education system with vouchers as well - £3,500 per child per year seems a good place to start, which would halve the cost to the taxpayer - the education budget plus Teachers' Pensions is about £70 billion and there are ten million school age kids in the UK. That's a handsome £1,000 tax cut for each taxpayer, so a working couple would have £2,000 a year extra to pay towards the cost of nurseries or school places.

That's how we see things on Planet Wadsworth.
But what does the BBC do? They turn straight to fakecharity number 327279 The Daycare Trust. Their spokeswoman spouts the inevitable:

"It is crucial that parents claim all the help they are entitled to, and that the government increase the free childcare entitlement to include all two-years-olds. The current review of tax credits should increase the maximum proportion of childcare costs the poorest parents can claim from 80% to 100%."

A quick glance at Note 3 to their accounts shows that they receive £600,000 a year from The Department for Children, Schools and Families for 'Policy, research and other projects'. They can get their policies for free from this 'blog. What do they do with the rest of it?
Bizarrely, Nulabour Children's Minister Beverley Hughes seems to more up to speed than her Blulabour counterpart.

Beverly Hughes points out "the survey was based on parents requiring 50 hours of childcare all year round for under-fives, which was "more than most parents take up or want" [and] the survey did not acknowledge the tax credit system for working parents or childcare vouchers offered through employers. The early years grants, available for children in the term after their third birthday, was also ignored...".

You might expect Blulabour to favour vouchers, but no, they just want more complications and more means-testing ....

Shadow families minister Maria Miller said: "The government must do more to make sure more families who are eligible for childcare support through the tax credit system actually receive it. At the moment, the system is overly complicated and that means only one in four families who are eligible are actually claiming the credit."
UPDATE. Re NC's comment that regulations are driving up prices. Nulab love regulations as it creates jobs for The Righteous. There's very little need for this of course - when you choose a school or a nursery, you talk mainly to other parents about experiences they've had - as long as your child sets off happily and comes back happily, the nursery is probably doing the right thing. Further, if a nursery were involved in some gross negligence, it would be all over the newspapers and people would take their children elsewhere, so simple information sharing makes most regulations unnecesary.

But the real force for increasing regulation is economics. The nursery cartel likes subsidies of course, because it enables them to put up prices. However, in the absence of barriers to entry/restrictions on supply, these super-profits would be competed away by new entrants. So for existing murseries to benefit disproportionately, they need subsidies AND barriers to entry, which they cunningly dress up as being "for the chi-i-ildren".


Anonymous said...

Nobody seems to be mentioning it, specificly neither the people doing this research or the BBC reporting it, but if prices are rising 4 times faster than inflation this is a dead giveaway that the driver is increasing regulation. So is the fact that Scotland is relatively expensive. The radio phone in thei morning gave some indirect support to this from a woman child minder who said that she was cheaper than nurseries but still mentioned regulation as a significant cost.

Of course it is always easier to impose regulations on anything to do with children because anybody who says they shouldn't be wrapped in official issue cotton wool at all times is clearly heartless.

AntiCitizenOne said...

Vouchers would just drive up the price.

Citizens dividend + Income would be a better way for parents to decide on working + nursery or look after child directly.

Snafu said...

Parents should not be subsidised for nursery places at all. It's their choice if they have children.

Do drivers of expensive cars expect to be subsidised by the rest of society for their lifestyle choices!?!

PS I expect many parents pay more than £8,000 in taxes per annum but where are the calls to reduce taxation!?!

Mark Wadsworth said...

AC1, to really drive up the price, they need barriers to entry as well. The point of vouchers is mainly to allow more women to go back to work. If they want to stay at home, good luck to them. Subsidising that 'lifestyle choice' might be a step too far.

S, we were all children once, it's hardly a lifestyle choice. Childcare vouchers just smoothe your net income over your lifetime. And didn't I mention tax cuts in the post?

AntiCitizenOne said...

Children are a choice.

If they got a citizens dividend, maybe the parents/guardian could allocate childcare + school costs from it.

Breaker said...

snafu, who'll be driving the ambulance when you fall and break your hip when you're in your 70's, who'll maintain the road that the ambulance drives on and who maintains the mechanics of the ambulance?

Nick von Mises said...


If snafu was allowed to keep his earned income and was free of public sector crowding out, he'd be quite capable of contracting with one of the many private ambulance driving and hip replacement companies that would spring up.

And if he was prepared to accept that risk, he could just spend all that money on booze and ciggies instead.

Mark Wadsworth said...

NVM, that's way O/T.

Even if we scrapped the taxpayer-funded NHS, the private care providers catering for 70 year olds (who were themselves children once; may well have had children of their own etc) would still need younger people to drive the ambulances etc.

Snafu said...

The taxpayer funded NHS will be just a distant memory by the time I am 70. Immigrants can fill the gap if a lack of labour is driving up wage rates.

Why should parents be subsidised so that they can go to work so they can continue to pay the mortgage on that expensive house!?!

PS Who is going to subsidise my expensive car that I cannot afford to run by myself!?!

PPS Mark, childcare (rather than education) is a lifestyle choice. If childcare vouchers "just smoothe your income over your lifetime", I suggest you get a loan to pay for your childcare costs rather than rely on everyone else to chip in for you!

AntiCitizenOne said...

there are 6 billion people on the planet. 5 billion+ off which didn't need their parents to be paid to fuck.

banned said...

Yesterday Beverley Hughes announced that anyone and everyone working in 'early years childcare' will be required to have an A level qualification in that. This is a " new drive to meet a key Labour target of eradicating child poverty by 2020 - making it easier for parents to work and arrange childcare."

Out will go generations of midddle aged women who know perfectly well how to look after other peoples children and out will go huge numbers of mainly female youngsters who may not be academically gifted but do have the right personality/temprament to do that job.

A levels may not be as rigourous as they once were but anyone who has them will demand more than the minimum wage now paid in much of that industry. Costs will go up, supply of staff will go down.

Telegraph link is too big, google 'child care a level telegraph'

Mark Wadsworth said...

IEBOC, thanks.

A level story here.

Anonymous said...

Child care enables parents to earn money. Child care is paid for out of that money. It is entirely reasonable therefore either to grant tax relief on child care payments or otherwise to subsidise it. I doubt that there is a significant net revenue cost.

Mark Wadsworth said...

Anon, glad you mentioned it. Having vouchers probably leads to a modest increase in tax revenues - it's not just the working mum who pays tax, but the nursery and it's employees as well.

Staffordshire man said...

Have you added this to ?

Mark Wadsworth said...

I think so, but I can't check as that site is till down.