Submission for Education Committee regarding Childcare and the Early Years
Who we are: Koru Kids is one of the UK’s largest childcare providers, having delivered almost 2 million hours of childcare. Set up in 2016 with an original focus on flexible wraparound care, Koru Kids became an Ofsted-registered childminding agency in 2021 and now provides trained and vetted in-home childcarers on a part-time and full-time basis to families throughout the United Kingdom. Our service encompasses both home childcarers who work in the family’s home, and childminders who work from their own homes. As part of our work, we speak to many thousands of parents each year about their childcare needs and invest heavily in research to understand patterns of demand and supply in the market.
Our submission particularly relates to the Committee’s questions as outlined below:
How affordable and easy to understand is the current provision of childcare in England and what steps, if any, could be taken to improve it, especially in relation to families living within the most deprived areas in England? | Submission outlines a way to improve affordability of flexible childcare to families, without increasing cost or changing ratios |
Are the current entitlements providing parents/carers with sufficient childcare, and to what extent are childcare costs affecting parents/carers from returning to work full-time? | Submission shows that there is insufficient provision of flexible childcare, and outlines a way to increase its supply |
Whether the current Tax-Free Childcare scheme, and support for childcare from the benefits and tax credit system, is working effectively or whether these subsidies could be better used within other childcare subsidies. | Submission outlines a problem with the way that the Tax-free childcare scheme currently works, and proposes a better alternative
(This problem also applies to the Universal Credit scheme) |
What challenges do early years providers face in terms of workforce, including recruiting, and retaining qualified staff, and the barriers faced by individuals joining the profession? To what extent has the Covid-19 pandemic exacerbated workforce challenges? | Submission highlights a barrier to early years providers who are individuals, becoming registered within the current system - and proposes an efficient way to rectify this
(This problem also affects individuals providing childcare to older children) |
Why we are making this submission: We believe that the current childminding agency structure could function better in order to increase the supply of affordable flexible childcare.
We have a unique perspective operating at the intersection of three areas: (a) as a specialist in flexible and mostly part time childcare (b) as a major childcare provider operating at large scale and (c) as a childminding agency. This perspective has allowed us to identify a specific reform opportunity which we believe would dramatically increase the supply of affordable, flexible childcare to families eligible for taxfree childcare and Universal Credit, with many other positive effects.
We know from thousands of parents that affordable, flexible childcare is sorely needed. Even with 15,000 home childcarers ‘on our books’, we are able to meet only a small fraction of the demand from parents for our childcare. We could meet much more if the reform outlined in this submission was made.
Key points
● Lower- and middle-income families have difficulty accessing affordable, flexible, quality childcare. Take-up of tax free childcare is substantially lower than eligibility, and the vast majority of dual-earner Universal Credit recipient households with school-aged children do not receive the childcare element, due to a lack of appropriate registered provision.
● Part-time home childcarers could provide part of the solution, for parents who need relatively few hours e.g. before and after school. But statutory childcare support can only be spent on Ofsted-registered childcare, and most part-time home childcarers are not Ofsted-registered (unlike full-timers, who are generally employed by those on higher incomes and for whom gaining Ofsted registration is cost-effective) which means that parents are not entitled to pay for them using their statutory childcare subsidies.
● Enabling part-time home childcarers to be Ofsted-registered more easily and cheaply would increase the supply of part-time childcare to those who are entitled to statutory childcare support, but unable to use it to get childcare that suits their needs because of a lack of appropriate provision.
● This could be achieved by allowing Ofsted-registered childminder agencies, who already register childminders, to also register part-time home childcarers as ‘associate members’ – something they could do far more cheaply than an individual home childcarer seeking registration independently (we estimate approximately £150 compared to roughly £500). This would have the further benefit of bringing more part-time home childcarers, who are currently unregulated, into the regulated system, with reference checks, DBS checks, appropriate training and insurance--thereby increasing quality standards. |
Issue:
- There is a correlation between suitable childcare provision and parents’ ability to work.[1]
- Childcare provision which enables parents to work should satisfy four tests:
- Quality – so that parents know the person caring for their child has appropriate training and has undergone criminal background and reference checks
- Price – so that it is affordable for ‘normal working families’
- Flexibility – so that it covers needs that may comprise only a few hours each week, and frequently change
- Sufficient supply to fulfil demand.
- For those in highly paid roles, achieving this is simple: a full-time home childcarer, working in the home and regulated by Ofsted. However, this is an expensive option (around £40,000 a year), only affordable by the wealthy.[2]
- Current provision is not meeting parents’ needs, as evidenced by high dissatisfaction with childcare options combined with low take-up of childcare subsidies.[3]
- Wraparound care hours are a particular challenge for parents. For Early Years children who attend school nursery settings, the day can typically end at midday or 3pm. This childcare challenge persists for older children throughout their primary schooling.
There are currently three main wraparound childcare options, none of which satisfy the tests set out above:
- After school club: Rarely available for 3 or 4 year olds. For older children, regulated but still scarce, and inflexible, finishing sooner than needed for many jobs. Schools are struggling to provide after school care.[4]
- Childminders: marginally more flexible and regulated but increasingly scarce[5]
- Ad hoc (family, friends): wholly dependent on goodwill and individual circumstances. Wholly unregulated.
- A part time carer working just a few hours flexibly could be affordable for even low-income families, if they could use existing subsidies[6] to pay for them. However, very few part time home childcarers are Ofsted-registered and therefore families cannot pay for them using their childcare subsidies (neither tax free childcare nor Universal Credit childcare element).[7]
- The failings of the existing options mean many parents struggle to combine working and parenting, so that, for example, 29% of parents with a child aged under 14 said they reduced their working hours to accommodate or limit the expense of childcare.[8]
- The lack of part time and wraparound childcare options which are flexible, high-quality and affordable with subsidies would be resolved if part time home childcarers could be more easily registered with Ofsted. This would let parents pay for childcare using subsidies they already receive (e.g. Universal Credit, tax-free childcare), while maintaining quality control.
- Currently Ofsted registration of in-home part time home childcarers is theoretically possible but is (i) expensive[9] (ii) slow[10] (iii) overly burdensome for home childcarers looking after school-aged children[11].
- Private sector childminder agencies have been established with power to register childminders. As they are regulated and inspected by Ofsted, parents can use all forms of childcare subsidy on childminders registered with a childminder agency. However, childminder agencies cannot currently register home childcarers.[12]
The solution is to allow Ofsted-registered childminder agencies to register ‘associate members’, leaving Ofsted free to focus on inspecting institutions.
- This would:
● Increase supply and choice for parents, especially low income/those working atypical hours
● Free Ofsted to focus on core priorities (e.g. schools), and reduce cost
● Support women to continue to work/ return to work so the economy continues to gain from their skills and expertise[13]
● Create more jobs for childcare workers[14]
● Reduce pressure on schools
● Raise the standard of provision[15]
● Increase the sustainability of childminder agencies
- Childminder agencies (CMAs) could register home childcarers as ‘associate members’ in a streamlined process based on the current Ofsted registration process for home childcarers. (Critically, not simply using the existing CMA childminder process as this is too is not appropriate for home childcarers.) Quality of home childcarers would be assured via:
- Reference check
- DBS check
- First aid training
- Common core of skills training
- Public liability insurance
This process would be as rigorous as the current system, but cheaper and faster as it would be performed by CMAs, whose core business is registration of individuals.
As currently occurs, Ofsted would inspect and regulate the CMAs and assure the process. The cost of registration of individual home childcarers would be born by CMAs as part of their business model -- saving Ofsted money.
Questions and Answers |
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Does this proposal lower standards?
Quite the opposite, it increases them. This is about extending Ofsted registration to an unregulated part of the market, increasing standards.
Childminder agencies are heavily regulated by Ofsted, which scrutinises their internal processes. In practical terms, this means home childcarers would undergo vetting including reference checks, DBS checks, appropriate training and insurance. Unregulated home childcarers are not currently required to have any of these things.
How would registering with a childminder agency help parents pay using their childcare subsidies?
Childminder agencies (CMAs) have Ofsted numbers due to their Ofsted registration. If CMAs could register home childcarers, parents could use the CMA’s Ofsted number to pay for childcare provided by that childcarer.
Why can’t childminder agencies just register home childcarers now? What is the difference between the two?
Currently, childminder agencies can only register childminders.
A childminder works from their own home, looking after children from multiple families and, for younger children, delivers the Early Years Foundation Stage curriculum.
A home childcarer works from the parents’ home, and does not deliver a curriculum.
Registering as a childminder is a lengthy and costly process,even when done via a CMA. Therefore merely allowing home childcarers to register as childminders would not solve the problem. A new route needs to be created which replicates the relatively fast and cheap home childcarer registration process -- but via CMAs to make it even faster and cheaper.
Why not just fund existing after school clubs?
After school clubs do not meet everyone’s needs, due to their specific hours, the style of provision, and the insufficiency of supply. Often these clubs exclude Early Years children entirely.
This policy will both give families more choice and reduce the pressure on already-scarce after school places.
Part time home childcarers can currently register with Ofsted. Why don’t they?
The effort and expense of registration might be worth it for full time ‘career nannies’, but is disproportionate for part timers who might only work a few hours each week.
It typically costs almost £500 for an individual to meet the requirements for Ofsted registration, including a childcare course, 12-hour first aid training, insurance, DBS check and a £103 Ofsted registration fee. For a childcarer working (as an illustrative example) paid £13/hr for 3 hours after school 3 days/week, this cost represents over a month of gross wage and potentially several weeks of net wage.
Why would childminder agencies register home childcarers faster and more cost-efficiently than Ofsted?
CMAs are fast and efficient because they have been built as ‘registration machines’, with inhouse training, background checking processes, group insurance policies, and strong links with Local Authorities. These specialisms cover all the current elements of Ofsted registration for home childcarers.
Currently, the process of home childcarer registration is slow and expensive because Ofsted is only the final step, with several prior steps involving other providers. Prior to the official application, individuals currently need to contract with a first aid provider, childcare training provider and insurer in order to become Ofsted-registered. This also means the individual is a ‘retail’ customer of each third party, with no bulk buying or negotiation power. In contrast, CMAs can purpose-build registration processes and make them far more efficient.
Would this policy mean taxpayer funding would fund parents to do hobbies/leisure activities while others look after their children?
On the contrary, data show that the overwhelming majority of parents who employ home childcarers are employed, often working very long hours, and that childcare is integral to their working arrangements.
● In a 2021 survey of 597 families using Koru Kids home childcarers, 96.5% of respondents were employed, along with 99.5% of partners of respondents. 25% of respondents and 45% of partners of respondents worked more than 45 hours/week
● A Mumsnet survey of 571 home childcarer employers in 2021 found that the overwhelming majority of parents who currently use this form of childcare shape their working arrangements around their childcare, and find it difficult to do so
○ 90% cited childcare costs as a factor in changing their working commitments
○ 78% cited ‘difficulty obtaining available childcare that meets their needs’ as a factor in their working arrangements
● The group of ‘parents who use home childcarers’ is therefore in line with the broader group of parents who have been found in many studies to have their ability to work curtailed by a lack of childcare. See Annex for key statistics
What is the scale of the opportunity?
As part (i) of the Annex below suggests, the ‘limiting factor’ for uptake of flexible childcare is supply. Our experience as a provider accords with these statistics; registered supply is the constraint and demand is abundant. We receive hundreds of unprompted messages from families wanting to use Universal Credit/tax free childcare/childcare vouchers to access our childcare services, although we neither market nor offer this service.
The scale of the opportunity can therefore be calculated using an estimate of increased supply:
● Koru Kids received 77,000 applications to become a part time home childcarer in 2022. A very small percentage of these applicants end up working with a (high income) family via our private pay business.
● We estimate that if families could use childcare entitlements to purchase their services, around half of these applicants would additionally serve a family, i.e. 38,000 families would benefit
● For reference, 70,000 families accessed Universal Credit childcare element and 260,000 accessed taxfree childcare in 2021. For these two groups, 38,000 additional families would therefore represent a 12% increase in uptake - from just one provider.
● This proposal is also supported [16]by other CMAs who would enter the market if this provision were possible, further increasing flexible supply
And finally
We know that there is not much funding available for childcare. This reform would ‘punch above its weight’. It addresses all five of the top five barriers identified in 2021 in a report on families’ ability to access the childcare they need for their families.
We would be delighted to speak more about this topic if the Committee wished to follow it up.
Annex: Supporting statistics from published reports
(i) CHILDCARE PROVISION DOES NOT MEET PARENT NEED - ESPECIALLY FOR CHILDREN AGED OVER 4, AND PARENTS WORKING ATYPICAL HOURS
● Only 5% of dual earner Universal Credit recipient households with youngest child aged 6 receive the childcare element - compared to 32% when the youngest child is aged 2. This is consistent with a large proportion of families being unable to take up their eligibility due to a lack of appropriate registered provision for children over the age of 4. As one report concluded, “It’s clear that provision is not adequate to begin with and requiring registration on the voluntary or schools register does not give parents the options they deserve.”
● In one large 2022 poll, only 51% of parents agreed that “the type of childcare that is best for my family is covered by the support I receive”, with 31% disagreeing. 22% said that childcare support is not flexible enough to adapt to their work or family life. Skilled working class (C2) voters are particularly affected by a lack of flexibility, with just 42% saying that childcare is flexible enough
● In the 2021 Family and Childcare Trust Childcare survey
○ Only 26% of local authorities indicated they had sufficient after school provision for 5-11 year olds.
○ Problems were also severe in holidays: for example, only 31% of local authorities indicated they had adequate provision in all areas for 4-7 year olds. A large proportion of Local Authorities did not know if they had adequate provision or not.
○ Provision was particularly dismal for families working irregular hours: less than 20% of Local Authorities report sufficient childcare provision for parents working ‘atypical hours’
● The number of childcare spaces has barely increased since 2015, and the number of registered childminders has nearly halved since 2010
● One 2022 report found:
○ “Access to breakfast and after school clubs is patchy and unreliable and childminders are often in short supply, leaving parents without access to informal care with few options”
○ “A lack of flexible provision is also a persistent challenge for parents – particularly for those working full time, irregular or non-standard hours.”
○ “In nursery settings, parents are expected to book childcare places on what is often a rigid schedule of half-days, which are frequently out of sync with parents’ working hours. For parents with non-standard or unpredictable work patterns – including shift work, night shifts, precarious contracts – their options are limited even further.”
○ “Across the country, wraparound care for school-age children is hard to come by or unreliable. While childminders play a critical role in enabling families to juggle paid work and care, securing a childminder can prove challenging where demand from parents outstrips supply. Meanwhile, breakfast and after school clubs provided by schools are often patchy: parents describe schedules set or communicated to families in the first week of term, and last-minute cancellation of whole days of provision where there are staff shortages. Parents in more rural areas described a total lack of wraparound care – where in one case the only after school activity on offer was a single 45-minute slot once a week. This contributes to the anxiety and precarity parents associate with juggling the demands of care and paid work, which can often feel impossible.”
(ii) INSUFFICIENT CHILDCARE PREVENTS LOW INCOME PARENTS FROM WORKING
● A lack of flexibility from employers and childcare providers has been found to be a key barrier to in-work progression for single parents in particular
● A Mumsnet 2021 survey of over 20,000 people found that those with a household income of less than £20,000 p/a are significantly more likely to:
○ Think they would have attained more seniority in their work, or earned more, if they had not had childcare considerations (92%, vs 81% of those with a household income over £20k)
○ Say they stopped doing paid work altogether because of caring responsibilities (37%, vs 11% of those with a HH income over £20k)
○ Say they have undertaken work that is below their level of qualification or experience (34%, vs 19% of those with a HH income over £20k)
● The same Mumsnet survey highlighted the particular case of those on Universal Credit
○ 84% of those on Universal Credit said that difficulty obtaining childcare that met their needs was a factor (65% - major factor) in decision to change working commitments
○ 35% of those on Universal Credit said they had been required to work shifts that didn’t fit well with their family responsibilities
(iii) WOMEN WOULD WORK MORE IF CHILDCARE WERE ADEQUATE
● One study found Non-working mothers are more likely to cite childcare issues as the main reason they cannot work than anything else, with over a third (34%) saying this is the main reason (iii). 46% of women who were in paid employment when they became pregnant said they had since not applied for a promotion that they would have applied for if they weren’t a parent.
● Another found 60% of non-working mothers said they would work if they could find affordable childcare
● In 2019, 54% of mothers who were working part time but wished to increase their working hours or work full time stated that the biggest barrier to doing so was being unable to afford suitable childcare.
● A 2021 study suggested that 1.7m women (46% of 2000 respondents) had been prevented from taking on more hours at work because of insufficient access to childcare. 30% had to reduce the hours they worked, and 34% were prevented from taking a potential job. 15% had to quit their job.
(iv) SUBSIDIES HAVE LOW TAKE UP RATES
- Actual spend on Tax Free Childcare has been less than half what was predicted in 2017. One report found that “the government is set to underspend on childcare support by over £650 million [in 2022].”
- One 2022 report noted that up to 1.3million families are eligible for Tax Free Childcare, but only 316,000 are using the scheme.
- While the number of open and used Tax Free Childcare accounts track with each other between the ages of 0-2, there is a significant gap between the ages of 3-9. By age 5 the gap between used and open childcare is nearly 46,000 children.