The increasing cost of childcare has become a major issue in recent years, with one in eight having left a job and one in five having turned down a job due to the cost of childcare[1].
The government has announced a major increase in childcare support in the 2013 budget. Under new rules, the government will cover 20% of a families childcare bill up to a maximum of £1,200 per child[2]. The government argues that the plans are progressive as no support goes to parents earning above £150,000 a year and the new subsidies will support five times as many families (2.5 million) and will come at a net cost of £1 billion[3].
The Institute of Economic Affairs have criticised the childcare subsidies for trying to solve a supply-side issue with demand-side solutions. In plain English: they argue that the government should look to reasons why childcare costs so much (such as regulation) instead of higher subsidies[4][5]. It should be noted that the government has been working on supply-side reform as well as greater subsidies[6], though opponents claim that deregulation will damage quality[7], accusations the government reject[8].
- Are subsidies the correct policy?
- Are they adequate?
By Will Archdeacon
Quoted links
[1] http://www.guardian.co.uk/uk/feedarticle/10306915[2] http://www.bbc.co.uk/news/uk-politics-21833929
[3] http://www.bbc.co.uk/news/uk-politics-21842014
[4] http://www.iea.org.uk/blog/demand-and-supply-why-the-budget-fails-on-a-level-economics
[6] http://www.bbc.co.uk/news/uk-politics-21842014
[8] http://www.bbc.co.uk/news/education-21232270
Conservative Party statement
http://www.conservatives.com/policy/issues/childcare.aspx
Liberal Democrat Party statement
Other links for further reading
http://www.bbc.co.uk/news/uk-20116783
http://www.bbc.co.uk/news/education-21232271
http://www.channel4.com/news/quarter-of-parents-in-debt-over-childcare
