Written evidence from Women's Budget Group (UCC0014)


The UK Women’s Budget Group (WBG) is an independent network of leading academic researchers, policy experts and campaigners that analyses the gendered impact of economic policy on different groups of women and men and promotes alternative policies for a gender equal economy.  We welcome the opportunity to provide evidence to this inquiry.


  1. High quality, accessible and affordable early childhood education and care is essential social infrastructure, with the potential to deliver significant levelling up benefits for the children, families, the economy and wider society.


  1. High-quality childcare between the ages of 0 to 5 years helps to close the attainment gap between low-income children and their more advantaged peers, reducing inequalities and creating benefits that last throughout a child's time in school and beyond[1]. It removes barriers to employment, particularly for women, who are still disproportionately responsible for unpaid care


  1. Unaffordable upfront costs of childcare have a big impact on low-income parents whose childcare providers require them to make payments in advance. For the most part, it is mothers who are most impacted by this, as it is women who have their ability to work or work more hours inhibited by the high cost of childcare[2].


  1. What is the impact of having to pay for childcare upfront under Universal Credit on parents’ decisions to work, or to work more hours?










  1. What is the impact on claimants of the monthly maximum reimbursement cap on childcare costs in Universal Credit, and the 85% cap?








  1. What effect do the existing caps have on childcare providers and the availability of childcare?






  1. Does the Government’s current approach to funding childcare support represent good value for money?








Recommendations :

  1. As a matter of urgency


I)                    Parents need to be able to claim their childcare costs in advance in line with the practice of most childcare providers who ask for payment up front.

II)                   The overall cap on childcare costs needs to be uprated to reflect the current cost of childcare and the percentage of costs covered needs to be extended for low-income families.

III)                 The Government must revise the ‘free hours’ funding so it reflects the true cost of provision of these hours. This public investment should include conditions for childcare providers, including a real living wage salary for childcare workers and the provision of enough places for twoyear-olds eligible for the ‘free’ 15 hours and children with SEND.


  1. Direct funding to providers. Instead of trickling money into the demand side (parents), the state should direct funding into the supply side, investing in providers who meet established standards of excellence and equality. This approach enables local and national government to play a stronger role in driving up standards and ensuring equitable provision. It also makes it possible to introduce fee caps.


  1. Target disadvantage. This could be done partly by reviewing the components of the EYNFF. The government should work to reduce inequality in the childcare system by increasing the pupil premium, so that it effectively targets disadvantage[40].This way local authorities would be able to support providers to cover the real cost of providing high-quality childcare in their area, including children with additional needs.


  1. Fill the gaps. Marketised provision can leave poorer neighbourhoods underserved. The government should map gaps in provision and work to fill those gaps. This would include getting a better understanding of how funding falls are affecting provision, including Sure Start, and increase the provision to children that are most in need.


  1. Quality Childcare. Quality is intricately linked to the working conditions in the sector. A national workforce strategy is needed as part of a wider independent review of the early years sector. Childcare professionals should see national pay scales established and minimum pay set at the Real Living Wage. Training should be provided to improve qualifications and career progression and conditions such as training and development opportunities should be a condition of receiving public funding.


  1. The case for universal free childcare. High-quality childcare supports children’s cognitive and social development. It is particularly effective in improving the life chances of the most disadvantaged children. It is therefore crucial that children – particularly those from disadvantaged families – are able to access high-quality childcare. Yet at present access to high-quality education and care is severely constrained by income, with the result that those children who would benefit the most from such care not being able to access it. Moreover, recent policy changes exacerbate these inequalities.


The positive impact of childcare means that government investment in high-quality care makes good fiscal sense. The expected return on investing in interventions in the early years is estimated at 6-10% per year[41]. Ensuring access to affordable and flexible childcare would enable parents, especially mothers, to increase their earnings by between £7.6bn and £10.9 bn every year, generating up to £28.2 bn in additional economic output per year[42].




January 2022

[1] The OECD has identified a range of social benefits that can be derived from ‘high quality early childhood education and care’, including better health, reduced likelihood of individuals engaging in risky behaviour and strong ‘civic and social engagement’, with positive ‘spill-over effects’ for society as a whole. Full report: OECD (2011) ‘Investing in high-quality childhood education and care (ECEC) (https://bit.ly/2ZmGmnb)

[2] Abid, Hana. WBG (2021) Access to Childcare in Great Britain. Briefing-Childcare-FINAL-version.pdf (wbg.org.uk)

[3] Universal Credit statistics, 29 April 2013 to 14 January 2021, Universal Credit statistics, 29 April 2013 to 14 January 2021 - GOV.UK (www.gov.uk)

[4] Single mothers disproportionately impacted by universal credit cut, charity warns ahead of budget | The Independent March, 2021

[5] Ibid

[6] Coram Family and Childcare Trust (2021) Survey 2021 (https://bit.ly/2Ue4Tv1)

[7] Ibid

[8] Women’s Budget Group calculations using Coram’s Annual Childcare Survey 2021 and the Annual Survey of Hours and Earnings (ASHE) in Abid, Hana. WBG (2021) Access to Childcare in Great Britain. Briefing-Childcare-FINAL-version.pdf (wbg.org.uk)

[9] Ibid

[10] Ibid

[11] Abid, Hana. WBG (2021) Access to Childcare in Great Britain. Briefing-Childcare-FINAL-version.pdf (wbg.org.uk)

[12] Office for National Statistics [ONS] (2021) Table INAC01: Economic inactivity: Women aged 16 to 64 by reasons for inactivity (seasonally adjusted).

[13] Women’s Budget Group (2018), The Female Face of Poverty (http://bit.ly/2CRIx8N)

[14] WBG (2018) Submission to the ‘Childcare as Barrier to Work Inquiry’ of the Work and Pensions Select Committee (https://bit.ly/2PTpldK)

[15] New data shows ministers knew early years was underfunded (https://bit.ly/3w1h8Zb)

[16] Ceeda (2019) Counting the cost in spring 2019 (https://bit.ly/2DD13Dz)

[17] Ibid

[18] Reis, S & Stephens, L. WBG (2021) Childcare, Gender and Covid-19 (Childcare_-Autumn-2021-pre-Budget-Briefing.pdf (wbg.org.uk)

[19] Reis, S & Stephens, L. WBG (2021) Childcare, Gender and Covid-19 (Childcare_-Autumn-2021-pre-Budget-Briefing.pdf (wbg.org.uk)

[20] Noden, P. and West, A. (2016) The Early Years Single Funding Formula: National policy and local implementation (http://bit.ly/2mWoddv)

[21] CPP (2021) Women in the labour market (https://bit.ly/3vDY2K7)

[22] The UK has the third-highest childcare costs in the developed world - New Statesman, September 2021

[23] Ibid

[24] Ibid

[25] Reis, S & Stephens, L. WBG (2021) Childcare, Gender and Covid-19 (Childcare_-Autumn-2021-pre-Budget-Briefing.pdf (wbg.org.uk)

[26] Barrett-Evans, Dominic and Birlean, Diana (2018) Childcare UK Market Report; Fifteenth Edition, London: Laing and Buisson

[27] Ibid

[28] Reis, S & Stephens, L. WBG (2021) Childcare, Gender and Covid-19 (Childcare_-Autumn-2021-pre-Budget-Briefing.pdf (wbg.org.uk)

[29] Penn, H. (2018) Quality of employment of childcare staff (unpublished)

[30] Barrett-Evans, D and Birlean, D (2018) Childcare UK Market Report; Fifteenth Edition. London: Laing and Buisson

[31] Ibid

[32] Ibid

[33] NEF (2020) Quality childcare for all (https://bit.ly/2TPDY5t)

[34] See for example: Cleveland, G., & Krashinsky, M. (2009). The non-profit advantage: producing quality in thick and thin childcare markets, Journal of Policy Analysis and Management, 28(3), 440 - 462

[35] Reis, S & Stephens, L. WBG (2021) Childcare, Gender and Covid-19 (Childcare_-Autumn-2021-pre-Budget-Briefing.pdf (wbg.org.uk)

[36] Ibid

[37] OECD (2016) Who uses childcare? Background brief on inequalities in the use of formal early childhood education and care (ECEC) among very young children (https://bit.ly/2TSzJpP) 

[38] Reis, S & Stephens, L. WBG (2021) Childcare, Gender and Covid-19 (Childcare_-Autumn-2021-pre-Budget-Briefing.pdf (wbg.org.uk)

[39] NEF (2020) Quality childcare for all (https://bit.ly/2TPDY5t)

[40] As recommended by the Social Mobility Commission (2017) Time For Change: An Assessment of Government Policies on Social Mobility 1997- 2017 (http://bit.ly/2shbXs1)

[41] See various studies by J. Heckman and team (http://bit.ly/2qgyiEk)

[42] Reis, S & Stephens, L. WBG (2021) Childcare, Gender and Covid-19 (Childcare_-Autumn-2021-pre-Budget-Briefing.pdf (wbg.org.uk)