Parents in Wales on the lowest incomes are spending, proportionally, nearly 10 times more on childcare than their wealthy counterparts 

• Just 15% of families in the poorest fifth of the population earn enough to be eligible for funded childcare, compared with 83% of the richest fifth of families.
• For a family using 40 hours of childcare over four years (aged 0-4), the total estimated cost is £46,215 per child 
• Parents in the richest fifth of the population are five times more likely to be eligible for funded childcare than those in the poorest fifth

8th July 2024 – A new report reveals how single parents and those on a low income are unfairly penalised by childcare funding in Wales.  

The report, A Family Childcare Promise, by Pregnant Then Screwed (PTS), based on analysis by the New Economics Foundation (NEF) and funded by Oxfam Cymru, explores how the current funded childcare model in Wales is penalising those on the lowest incomes. 

The Welsh Government currently provides limited funded childcare support for eligible two-year-olds through its Flying Start scheme and for three- and four-year-olds via its Childcare Offer.

However, the report reveals the system is failing low-income families, with parents in the richest fifth of the population being more than five times more likely to be eligible for funded childcare than those in the poorest fifth. 

Modelling suggests that if a family put their child into 35 hours of childcare for 50 weeks a year under the current system, those in the poorest 20% of the population would spend on average 51% of their income on childcare, compared to those in the richest 20% who would spend on average just 5% of their income on childcare.

The report also underlines the high cost of childcare in Wales, with the bill for 40 hours of care per week  from age 0-4 estimated to be £46,215.

Ahead of the Welsh Government publishing its Legislative Programme tomorrow, campaigners are calling for Ministers to explore an alternative funding model where childcare costs are capped at 5% of family income. 

The report finds that moving to this new model, called a Family Childcare Promise (FCP), would save almost every family money, with particular benefit for those on the lowest incomes. This is especially important because research shows that children from low income families stand to benefit the most from high quality childcare and early years education. 

A Family Childcare Promise would save those in the poorest 20% approximately £7,361 in childcare costs whilst being able to secure more hours of support. It would even offer a financial saving of approximately £1,467 to those in the richest 20%. 

The current funding model in Wales is complex with a variety of different benefit systems and childcare support available to families, including Tax Free Childcare, Universal Credit childcare funding, Flying Start and the Childcare Offer. 

Campaigners say FCP would make the system more understandable by consolidating all childcare support into one easy to understand benefit. 

The model is progressive, where the more a family earns, the more they pay into the system, it is accessible to everyone, ensures costs remain the same when multiple children are in childcare simultaneously, and it does not penalise single-earning households. Importantly, this new model would ensure that all children are able to access early years education, which is transformative.

The report estimates that the total cost to deliver this new model would be £403 million per year.

However, the economic benefits to Wales could be huge with research by the Royal Foundation for Early Childhood finding that investing in early childhood could benefit the wider UK economy to the tune of £45.5 billion. 

Joeli Brearley CEO and Founder of Pregnant Then Screwed comments: “Although, in some circumstances, the Welsh childcare system is more progressive than the system in England, the current model is extremely inefficient. It penalises single parents and those who have multiple births and disproportionately benefits those on middle and high incomes who stand to gain the least from an affordable system. Parents are overwhelmed and bamboozled by the many benefit systems, resulting in some not claiming what they are entitled to. Our report offers an alternative option that could have greater benefits for families and the economy. We implore the Welsh Government to prioritise childcare, to understand the role it plays as both economic infrastructure and as early years education, and to consider more efficient ways to invest in its development.’’ 

Tom Pollard from the New Economics Foundation comments: “Access to high-quality early education and care is something that would benefit all children, their families, and our society and economy as a whole. But for many families, funding support is complicated to navigate and conditional on them meeting certain requirements around the number of hours parents are working. This often leads to low-income families, with children who would stand to benefit the most from early education and care, missing out on accessing the full offer of support. 

This proposal for a new, simplified funding model would help to ensure that early education and care is accessible and affordable for all families. It would be fair, transparent, and easy for parents to navigate. It should be accompanied by policies and funding that ensure high-quality provision is available in all areas, with secure and well-paid jobs for staff and clear requirements on providers to operate in the public interest.”

Sarah Rees, Head of Oxfam Cymru, said: “Across Wales, the crushing and unfairly skewed cost of childcare, combined with the insufficient levels of funded childcare support, is driving families further into poverty rather than helping them escape it. The current system is broken, failing those who need it most. It’s time for the Welsh Government to collaborate with independent experts to chart a new course that supports children, empowers parents and providers, and breaks the devastating cycle of poverty to ensure no family is left behind.”

Click here to read the Family Childcare Promise report 

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About Pregnant Then Screwed: 

Pregnant Then Screwed exists to end the motherhood penalty. We are the voice of working mothers in the UK. We have a strong and deep connection with our beneficiaries. We provide world-class advice and support to mothers to help them improve their confidence and wellbeing, to give them the tools they need to challenge discrimination in the workplace and to support them to find work that works for them. We advocate for change and raise awareness of the specific challenges faced by working mothers. We challenge deeply entrenched stereotypes about the role of mothers in society. We work with employers, politicians, women and men to make change happen. We publish compelling research to educate, inform and lead the debate.
www.pregnantthenscrewed.com