Transforming Childcare, Changing Lives: Making sure that work pays

How to maximise Universal Credit by reforming childcare: a positional paper by the Centre for Social Justice (October 2012)

Foreword by Christian Guy, Managing Director of CSJ

Childcare has two key objectives: to support child development, and to support parents into employment thereby raising household incomes and building self-reliance. This report focuses on the latter of these two priorities. Universal Credit is an excellent start to removing barriers to work, and will transform many lives. Yet there is a need to tackle our broken childcare system if the full potential of these reforms is to be fulfilled. Childcare costs will hold people back from working unless they are brought under control. As the CSJ’s research identifying the five pathways to poverty (family breakdown, educational failure, economic dependency, addiction and serious personal debt) emphasises, work is transformative for individuals, families and wider society. It is the surest route out of poverty.

The benefit system recognises this by placing an obligation on parents to seek employment when their youngest child enters school. As the CSJ has long argued, the value of earned income and self-sufficiency extend beyond raising household income, individual well-being and self-esteem. Children raised in working households find it easier to find work in adult life, which in turn improves their life chances and prevents the damaging cycle of intergenerational worklessness. Despite this, 1.8 million children live in workless households in the U.K.

The Government’s commendable efforts to make work pay for those on low-incomes cannot be undermined by the high cost of childcare which can act as a major barrier to working. This report calls for the Government to lead a ‘supply-side revolution’ in childcare provision. Many disadvantaged families find the cost of childcare provision prohibitive – currently not all parents find it financially worthwhile to get a job and pay for childcare.

In this paper, we make recommendations as to how policy makers could improve the affordability and flexibility of childcare, how they should help families find work in ways and at times that keep childcare costs low, and how they can support parents to find the economic balance between employment and childcare.

Full text (PDF 38pp)

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