Whether it’s Denis Healey’s wayward eyebrows, Gordon Brown’s chewed fingernails or Philip Hammond’s ample spreadsheets, there are features of the Budget that are all too familiar.
Discussing childcare isn’t one of them.
Chancellor Jeremy Hunt broke that taboo in March when he announced England’s biggest expansion of state-funded childcare.
He extended the support from nine-month-old infants to four-year-old children from September 2025.
Holyrood’s childcare pledge
This in turn triggered extra cash for the Scottish Government through the Barnet formula’s “consequentials”.
Scotland already offers 1,140 hours of funded childcare and early learning every year for all three and four-year olds, and also some two-year olds.
The SNP used its 2021 Holyrood election manifesto to commit to extending that provision to one and two-year olds.
Humza Yousaf pledged to use his first budget to fulfil that promise during his campaign to become first minister.
And he used his inaugural anti-poverty summit earlier this month to unveil further funding for after-school clubs.
Yet recent reports have underlined the damage inflicted on local communities and their economies by a lack of affordable childcare. Campaigners have highlighted the need for faster action to help both entrepreneurs who want to start businesses and parents wishing to return to work.
Pathways report highlights women entrepreneurs’ childcare ‘burden’
Entrepreneur Ana Stewart and Scottish Government chief entrepreneurial advisor Mark Logan spelt out the difficulties in their snappily-titled Pathways: A New Approach for Women in Entrepreneurship report.
It was commissioned by the then finance secretary Kate Forbes and published in February.
“In our interviews with female entrepreneurs the childcare burden was regularly highlighted as a particularly challenging constraint,” the report’s two authors said.
Their recommendations include giving grants to entrepreneurs in the government’s proposed pre-starts network to meet the cost of several hours a week of extended childcare for up to a year.
Meanwhile, survey findings published recently by consultancy Flexibility Works show childcare is the biggest reason Scots work flexibly or want to work flexibly, with 57% listing it as the main or contributing factor. The study also found 28% of unemployed women and 16% of jobless men aren’t working due to their childcare commitments.
Childcare plays a key role in economic development by supporting jobs and allowing parents to get back to work.”
Mike Duncan, Federation of Small Businesses
The need to recognise the economic importance of childcare struck a chord with Mike Duncan, development manager for the Federation of Small Businesses (FSB) from the Tay to the Spey.
He said: “In the past, childcare has often been looked at in isolation.
“But if you look at it in the wider sense, childcare plays a key role in economic development by supporting jobs and allowing parents to get back to work.
“Childcare is pretty vital to how any local economy works, so there’s work to do to give it more of a high-value status.”
Employees’ biggest concerns
Three aspects of childcare in particular are issues for Mr Duncan’s FSB members.
- Childcare for themselves because they often have to work outside “normal” hours to run their businesses
- Provision for their employees
- Childcare availability to help recruit staff
Cost is also an issue for workers. Mr Duncan said average daily costs were around £60 in Moray and about £70 in Aberdeenshire.
He added: “The Department for Work and Pensions has told me help is available for workers who receive universal credit. But I think more needs to be done to tell people about the help that’s available.”
Mr Duncan’s FSB Scotland colleague David Richardson, development manager for the Highlands and Islands, said childcare was tied into wider issues over staffing shortages.
It an important factor in attracting people to come and work in rural areas, he added.
FSB surveys have shown a growing challenge with staff recruitment.
In 2016 about one-third of businesses on Skye reported staff shortages.
The figure rose to around 37% across the islands in 2017 and about 40% throughout the Highlands in 2021. That lack of workers is having a knock-on effect for local economies.
Firms having to ‘adapt to survive’
Mr Richardson said: “Up to 80% of the businesses that are short-staffed have had to change the way they operate, such as cutting their hours or services. They’ve had to adapt to survive.
“Last year, if you left Ullapool and drove to Tongue on the North Coast 500, there was only one hotel serving lunch. That’s because they had enough staff to do so, because they’d bought houses to accommodate staff.
“We’ve got a very real situation here now.”
Mr Richardson added childcare had formed part of recent meetings he’d attended with North West 2045, which has developed a community-led economic vision for the north-west Highlands, and the Highland Employability Partnership, led by Highland Council.
Many parents are now in a “catch-22″ situation, where they must commit to set days of childcare before knowing their exact working pattern.
Sharing #FlexforLife from @flex_works. Flexible working is game changing in many ways. #Flexibleworking combined with #FlexibleChildcare can be life changing for families. It can help tackle #childpoverty & contribute to solving #workforce shortages in our economy. @FlexibleCScot https://t.co/HGM8qWoYAB
— Susan McGhee (@SusanMcGhee123) May 17, 2023
One creative solution comes from Flexible Childcare Services Scotland (FCSS), a charity that grew from a pilot project run by One Parent Families Scotland.
It received funding from the “local intervention partnership” between the Hunter Foundation and Scottish Government.
Initially, the project used childminders to offer flexible care at home.
But FCSS now runs its own nurseries in locations including Keith, Inverurie, North-East Scotland College’s campus in Fraserburgh, and Cummings Park and Tillydrone in Aberdeen. It also runs an after-school club in Inverness.
‘Flexibility does come at a cost’
FCSS is campaigning for some of the Barnett consequential cash to fund more flexibility in Scotland’s childcare system.
“Flexibility does come at a cost, FCSS chief executive Susan McGhee said, adding: ” We reckon about £2 an hour per child would need to be added to the funded rate.
“That’s because it’s harder to fill up your nursery when you’re selling odd patterns of bookings to meet parents’ needs – you end up with gaps you can’t fill.
“So, whereas private sector providers may be targeting their occupancy rate at say 90% and some of these are full at the moment, we probably can’t get beyond about 70%.
“It does cost more if you’re running flexibly.”
Flexibility Works co-founder Nikki Slowey underlined the need for affordable childcare.
“Lack of flexible working usually means higher childcare costs for families,” she said.
We need good flexible working and quality, affordable childcare in place if we’re serious about encouraging more mothers to work.”
Susan McGhee, Flexible Childcare Services Scotland
She added: “Many mothers largely still carry the burden of caring for children.
“Work just isn’t worth it if all they earn disappears on childcare.
“We need good flexible working and quality, affordable childcare in place if we’re serious about encouraging more mothers to work.”
Mr Duncan highlighted a need for councils to work with childcare providers to tailor the roll-out of more government funded childcare places.
He added: “When these new obligations come through to councils, it’s so important they work with private care providers and also parents who need access to that care.”
This will help to ensure they get the right solution for their area, he said, adding: “A council can’t just sit in isolation and decide how it’s going to fulfil its obligations.”
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