CEY1525

Written evidence submitted Business in the Community
 

About Business in the Community 
Formed in 1982, and with His Majesty King Charles III as its Royal Founding Patron, Business in the Community (BITC) is the largest and longest-established membership organisation dedicated to responsible business. BITC works and campaigns with more than 600 businesses to continually grow their responsible business practices, by uniting efforts for greater social and environmental impact in UK communities.

Childcare Costs

In October 2022, BITC analysis on childcare costs found that across England, Scotland and Wales, full-time nursery for children under the age of two is costing some parents more than half of one person’s median weekly take-home pay. The analysis used data from Coram and Family Childcare’s 2022 Childcare Survey results alongside ONS income data. The analysis found that: [[1]]

•                     In England, the median weekly take-home pay of a working-age adult is £418. Nursery for a child under two years old costs £274 per week, which is 65% of one parent’s weekly median take-home pay.

•                     In Scotland, the median weekly take-home pay of a working-age adult is also £418. However, nursery for a child under two years old costs £213, which is 51% of one parent’s weekly median take-home pay.

•                     In Wales, the median weekly take-home pay of a working-age adult is £390. Nursery for a child under two years old costs £247 which is 63% of one parent’s weekly median take-home pay.

This analysis shows that the cost of childcare is now exceeding half of a person’s median take home pay in England, Scotland and Wales. Childcare vouchers are only available to parents when their children turn three. This means, parents with children under the age of two have to pay full price for childcare, with no help from the government.

BITC has conducted further analysis using ONS data on local authorities in England and Wales and combined it with household deprivation data from Census 2021. Using the percentage of households in each local authority that are classified as deprived in one or more dimension shows there is a link between the cost of childcare and deprivation. [[2]]

The analysis shows that the cost of childcare disproportionately impacts people living in the most deprived communities as the areas with the highest levels of deprivation tend to have childcare taking up a high proportion of their income. For example:

• In Blackpool, 62% of households are deprived in one or more dimension, the highest in the UK, and childcare costs 69% of one person’s median weekly take-home pay. This is 4% higher than the average in cost of childcare per week when compared to median weekly take-home pay.
• Barking and Dagenham and Great Yarmouth 62% of households are deprived in one or more dimension and childcare costs amount to 70% and 82% respectively of take-home pay. These percentages are much higher than English average which is 65%.

Impact on employment rates

Research shows that over the last year there has been a 5% increase in the number of women leaving work to look after family. [[3]] Therefore, addressing access to childcare and its affordability could have a significant impact on the number of women who can balance work and care. Research shows that women are most likely to leave the workforce or reduce their hours once they have children, demonstrated using ONS data in the below table: [[4]]

The table shows that 26% of women with dependent children aged between 0 to 2 are economically inactive compared to 5.1% of men. Only 37.1% of women with children aged 0 to 2 are working full time compared to 85.1% of men and 33.8% are part time.

ONS data also shows that the employment rate for women aged 25 to 34 with children is 69.3%, significantly lower when compared to 89.5% for women in the same age group without children. Further to this, men with children aged between 25 to 34 have an employment rate of 92.4%.

The Census 2021 has found that 7% of households in England and Wales are lone parent families. [[5]] In total lone parents are estimated to have an employment rate of 68.5%, going as low as 49% for those with children aged between 0 and 2 years old. [[6]]

Impact of childcare on women in the employment

In March 2022, BITC research conducted by Ipsos, found that nearly six out of 10 women (58%) say caring responsibilities have stopped them from applying for promotion or a new job, and one in five (19%) have left a job because it was too hard to balance work and care. The research also found that almost half of the UK Workforce (44%) are combining paid work and care with the majority caring for a young person under 18. 94% of those surveyed agreed that ‘caring responsibilities should be shared equally regardless of gender’, however half of those trying to split caring responsibilities with someone else said that this doesn’t happen in practice, with working cultures often to blame. [[7]]

The cost of childcare has become unaffordable with many women being forced to leave the workforce, or work fewer hours, in order to care for children. This is particularly the case for women aged between 25 and 34 and for women with children aged between 0 and 2. For women who remain in work, childcare can still be a barrier to progression.

In addition, parental leave is still only legislated for two weeks in the UK. BITC is calling for Equal Parental Leave to be introduced in the UK to help shift the dial on women being the primary carers and therefore having to balance work and care more often than their male colleagues. UK parental leave policies are highly unequal with lasting implications for gender equity – unequal parental leave is a key structural barrier to closing the gender pay gap. To address this, an increasing number of employers including Aviva, Natwest, Vodafone and John Lewis are enhancing and equalising parental leave to rebalance the burden of care.

BITC research on the cost-of-living crisis

BITC research from October 2022 found that the cost-of-living crisis is being particularly felt among adults with dependent children. The research found that 53% of adults in England, Scotland and Wales are worried about how they are going to afford to pay their bills over the next six month. For adults who have at least one child living with them 65% said they were worried about paying their bills, compared to 51% for adults with no children. The survey found that 48% of adults say that their current financial situation is negatively impacting their mental health. For adults with one or more children this increases to 64%, compared to 43% of adults with no children in their household. [[8]]

January 2023