baby boon

The UK will spend £4 billion more on childcare to boost the economy. Is it enough?

Right now, the UK has some of the highest childcare costs in the world

We may earn a commission from links on this page.
The Duchess of Cambridge and a toddler greet each other.
The Duchess of Cambridge doesn’t need help with childcare costs.
Photo: pool (Reuters)

Ahead of the UK government’s budget announced by Jeremy Hunt this week, rumours were flying around the country’s kid-friendly cafés. Would the government really extend its policy of providing 30 hours of free childcare for all three- and four-year-olds to children as young as one? One mother on a WhatsApp group in North London summed up the mood: “I’ve never been so excited about a budget ever 😂 bring on tomorrow 12.30!” she wrote.

On March 15, when Hunt revealed his plans for childcare reform, they were even more far-reaching than expected. The provision of 30 free hours of care, to be claimed through an approved childcare provider, will be offered to all parents with children from the time they’re nine months old, the age at which state financial support for the parents of newborns ends, until they join school.


Financially, the change will be huge: a 60% drop in childcare costs for parents, equating to thousands of pounds a year, according to the government. The UK has, to date, been one of the most expensive places in the world to get childcare; an average two-parent unit can spend nearly 24% of their monthly earnings on full-time childcare.

Parents’ groups have long campaigned for change, arguing that the lack of support for the earliest years is hampering people’s ability to return to work after having children. Pregnant Then Screwed, one of the most vocal non-profits in the sector, has repeatedly made the point that women are far more likely to take the hit than men during the early stages of a child’s life. Statistics show that women’s careers never recover.


“Until now, having a childcare system which effectively forced mainly women out of the workplace after maternity leave was an own goal in the Government’s skills policy and plan for economic recovery,” Simon Swan, the CEO and founder of the recruitment platform Hiring Hub, told Quartz over email. Hunt’s announcement, “long overdue, will create a fairer system that supports parents in being able to return to work and will play an important role in battling the ongoing talent shortage.”

British childcare is expensive but also hard to get

The cost to the exchequer of Hunt’s policy is a projected £4 billion ($4.8 billion). Hunt is clearly convinced that this cost will be outweighed by gains in the economy overall.

But questions are already being raised about whether that sum is enough. Childcare providers have long called for more spending on the services they already offer, saying that their funding is nowhere near enough to cover their costs. One recent study by Nesta, a non-profit focused on social change, showed that while a child’s place at a West London childcare provider cost £10 an hour, the government subsidy only covered £6.66 of that cost.

Parents with children younger than school age have also routinely found that spots at childcare providers not only cost a lot but are also hard to get. In part because childcare subsidies have proven insufficient, nurseries often struggle to break even. That means, in turn, that there aren’t enough childcare places even for the parents who can pay for them.


The government’s new funding will be introduced in stages over the next few years, to allow supply to ramp up. Campaigners will likely continue to push both for more money, and for other reforms to the system, which can be labyrinthine to navigate.

“The current system remains overly complicated and convoluted. It needs to be simplified and to work in a way that is in keeping with how parents work, and need childcare support today,” wrote Ari Last, the founder and CEO of the babysitting app Bubble, in an email to customers. Last added that that the company would “continue to push for parents to have much greater freedom and flexibility to spend their Government subsidies on providers and solutions that work for them.”


Complicated and underfunded though the UK system may be, it still highlights how much can be done to support parents who want to work. And it might fuel similar campaigns in countries, such as the US, that still essentially leave the provision of childcare up to individual parents and the marketplace.