Calls for childcare reform

With the Spring Budget a month away, the government is being urged to increase tax-free childcare in order to keep parents in work.

The Recruitment and Employment Confederation (REC) is calling for a reform on UK childcare, such as the tax-free childcare scheme, otherwise, the jobs market could be harmed further.

The REC is suggesting that the government should:

• Increase the financial contribution to the tax-free childcare scheme. Currently, for every £8 put in, the government contributes £2. The REC is proposing this should be doubled to £4.
• Increase funding for nurseries and childcare providers.

Kate Shoesmith, Deputy CEO of the REC, commented, “Our most recent Report on Jobs shows that the supply of staff continues to fall, which is such a concern because our modelling shows that a failure to tackle labour shortages in the UK could cost the economy up to £39 billion every year from 2024. If ever there was a time when we need to get the economy moving and address the cost-of-living crisis, it is now.”

Kate added, “We urge government to work with labour market experts to better understand and address the causes of economic inactivity  – and we are finding the availability and cost of childcare is a significant barrier to work right now.

“One solution is for government to promote and increase the take up of the tax-free childcare scheme –  this scheme is currently used by just over 500,000 families in the UK, despite being open to over 1.2 million families. This is disappointing because tax-free childcare can make a big difference, helping with the bills for nurseries, childminders and after school clubs.

“Acting on childcare support is also vital to help the over 50s stay in work. We know that this is not just a responsibility on government, businesses have a role to play too. Employers can incentivise older workers to stay on through better job role design and flexibility. But without action on childcare and social care, many over 50s who have caring responsibilities for grandchildren and elderly parents, are going to continue leaving the workforce.”

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