Subsidies and regulations on childcare are costing us all

This morning the TUC released a report showing that childcare costs are rising faster than wages and called for further public subsidy of childcare by the government. Matthew Kilcoyne, Head of Communications at the Adam Smith Institute, agrees that the cost of childcare is a pressing issue but is one that is best fixed by a free market approach, he says:

"The way to bring British childcare costs down isn't, as suggested by the TUC, to spend ever larger amount on subsidising nurseries but to remove the regulatory barriers that make childcare unaffordable. 

"By far and away the largest costs for childcare providers is the cost of labour. Currently in the UK one adult carer is required for every three babies, four toddlers, or eight children over the age of three. By contrast, in Norway the maximum ratio of carers to children is much higher for the very youngest, at nine children to one carer. Evidence from the USA suggests that adding one child per carer more cuts costs by between 9% and 20%. If we relaxed our rules on childcare to Norwegian or French levels we could end up halving childcare costs.

"High staff to child ratios aren't just expensive, they can harm the quality of care too. Studies show that looser mandated child to carer ratios encourage higher qualified staff to enter the industry at higher wages. 

"The Conservative government should embrace the free-market option, increase the quality of care and come on side with young parents who want the freedom to work and start a family."

For further comment or to arrange an interview please contact Matt Kilcoyne via email (matt@adamsmith.org) or phone (07584778207).