A childcare system fit for the future?

In the OECD, the UK appears a generous spender on childcare and early education: in 2011, government expenditure represented 1.1% of GDP (including pre-school), which was above the OECD average of 0.8%, but behind Denmark (2%), Iceland and Sweden (both 1.6%; OECD, 2014). In terms of child poverty and mothers’ employment the UK lags behind countries such as Sweden, Finland and Slovenia, which spend more on services to families than cash benefits; the UK does the opposite. We argue that the UK’s current demand-priming approach is too complex, inefficient and unsustainable and provides a low baseline of provision compared to other countries. This results in a shortage of supply, prohibitively high costs for parents, wide regional variation and negative impacts on women’s employment. We argue that the next government’s priority should be to move towards funding and developing a supply-led system with capped fees based on a sliding-fee scale.