With Sunak’s alleged abandonment of Truss’ childcare agenda, is it time the business community finally steps into the breach? Our childcare in the UK is the third most expensive in the OECD and parents are feeling the squeeze. The average cost of full-time childcare is now a crippling £11,700 per annum. Those able to absorb the eye-watering costs of childcare also find themselves with little choice. The UK is experiencing a chronic shortage of childcare capacity, there were 100,000 fewer spaces in even before the pandemic than in 2015. This is a particularly bleak picture when compared with the situation in other countries. Take Sweden, where families spend on average 15% percent of their household income on childcare compared to a whopping 34% in the UK.
The economic and social implications are serious. A staggering 43% of women in the UK have considered leaving their job due to the cost of childcare, whilst 40% have already reduced their hours to cut costs. PwC estimates enabling increased participation of women in the workforce could see the UK gain up to £48 billion per year.
Given the high stakes, change is both necessary and urgent. The issue of childcare has been a consistent bugbear of successive governments in the UK. Reforms mooted by the short-lived Truss administration to extend the amount of free childcare hours available and cut red-tape around staff-child ratio to increase places have been shelved, with the coveted silver bullet nowhere in sight. Truss’ successor Rishi Sunak has shelved plans to raise free childcare to 50 hours, and to increase the toddler to carer ratio in nurseries and day care centres.
Given the obvious economic, social and political upsides, we can expect to see this issue receive more attention as we gear up for the forthcoming General Election. Championing childcare promises to mobilise a small army of followers as the UK grapples with a sustained cost of living crisis, stubbornly high inflation, and looming recession. And that’s before we consider the three quarters of women of working age who are also parents.
This presents a real obligation and opportunity for employers. Businesses have not traditionally been seen as primary providers of childcare. By integrating childcare benefits such as subsidised prices or on-site care into employment packages, employers would be going some way to alleviating the burden of childcare. Whatsmore, incorporating such measures will contribute to tackling existing barriers to employment - especially for women.
Many employers have long provided staff with a range of additional benefits covering everything from private medical cover to gym memberships. With intense competition amongst businesses to attract and retain the best talent, we can expect to see employers embracing a more progressive approach to childcare in future.
Companies that do so will reap the rewards. Alongside the talent dividend, their improved ESG profile will make them more likely to attract new investment and consumers. 86% of people ranked companies’ commitments to solving societal issues as amongst their top priorities when searching for jobs. Furthermore 76% of investors are willing to pay a slight premium for funds consisting of ESG rated firms. Taken together, these two statistics should cause business leaders to stop before dismissing childcare provisions. In a world with renewed competition for capital and workers, rewards are ripe for the taking!