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childcare costs: the pay neutral employees

Childcare costs impact on workforce

The British Chamber of Commerce and Middlesex University surveyed businesses on the impact of childcare costs on employees.

The survey, of more than 1,600 businesses across the UK found 28% have experienced a reduction in working hours by employees because of the cost of childcare.

Nearly 10% have experienced an employee ending their employment due to childcare.

In 2013 the Government published its report: ‘More Great Childcare — Raising Quality and Giving Parents More Choice‘.  All 3 to 4-year-olds in England can now get 570 hours of free early education or childcare per year. This is normally taken 15 hours a week for 38 weeks of the year. Some 2 year-olds can also receive free childcare, usually dependent on receipt of passport benefits or tax credits.

In June 2015 David Cameron announced plans to double free childcare to 30 hours, to be introduced from September 2017.

In 2016, Sam Gyimah, the Childcare Minister, announced some parts of England would be entitled to the 30 hours childcare earlier, from September 2016, including Wigan, Staffordshire, Swindon, Portsmouth, Northumberland, York, Newham and Hertfordshire.

But is this enough?

Many argue there is still an unacceptable gap in funded childcare between the end of maternity leave and the start of school.

Responding to the latest research, Adam Marshall, Director General at the British Chambers of Commerce said:

“Firms across the UK are losing talented staff, often because of the availability and high cost of childcare.

“At a time when economic growth is softening, and skills gaps and recruitment difficulties are hindering businesses, the government should consider the childcare system as part of Britain’s core business infrastructure – in the same way that it thinks of energy, transport, or broadband.

“Government must take a clear and detailed look at the costs and benefits of a universal childcare entitlement, to bridge the gap between parental leave and the start of school. This could take the form of a family account that enables parents to select the support that’s right for their working patterns from the market. In time, this could help businesses raise productivity, and help more parents stay in work. As businesses have evolved to become more flexible, government policy should also evolve – to help as many working parents as possible stay in the workplace.

“Expanded childcare options are good for families, good for businesses, and good for the economy.”

Pay-neutral employees

The impact of high childcare costs means many employees are pay-neutral – meaning they are effectively working for nothing because their  pay only covers the cost of child care and other necessary costs of working, like travel.

For more information on current help with childcare visit the Government’s website here .Gov

 

 

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