SWBG blog

Is investing in childcare worth it? A summary

The Scottish Women’s Budget Group (SWBG) is hosting a series of events focusing on the need and rationales for further investment in childcare. Our first two events examined issues of affordability and lack of flexibility in childcare provision in Scotland. The third webinar in this series, “Is investing in childcare worth it?”, delved into how investing in childcare is crucial to supporting the creation of a more inclusive and prosperous economy, as well as child development.

Childcare as a solution to gender inequality and fiscal pressures

Our first speaker, Scherie Nicol, Policy Analyst at the Organisation for Economic Co-operation and Development (OECD), discussed the work that her organisation has done to reduce countries’ fiscal costs, and explained the importance of using gender budgeting to close “gender gaps” as part of this. But what are gender gaps? Essentially, these are any differences between women and men’s levels of participation, rights, access, pay, etc., in any given area. For example, despite more women entering the labour market, men are more likely to be in work than women in every single OECD country and that’s despite women having higher educational outcomes. As a result, the population as a whole is not achieving its full potential in the labour market, which has an impact on the overall functioning of the economy across the OECD.

Scherie stressed that projecting forward over the next five years, if OECD countries closed the remaining gender gaps, the result could see an increase on average real GDP per capita of 9.2%. In the context of ageing populations, closing gender gaps can translate into fiscal gains for countries at a time of growing economic pressures.

But what can be done to reduce the employment gap? Women face multiple barriers and inequalities, so closing any gender gaps ultimately requires working in a holistic way to achieve gender equality, and for this to translate into fiscal gains. In relation to this, she pointed out that gender budgeting is one of the key policy tools at governments’ disposal to achieve their strategic objectives related to gender equality, and one that could help increase the effectiveness of the budget.

Canada is a prime example of this. In 2018, the country introduced a gender results framework designed to track how it performs on gender equality. When each new budget proposal is prepared, government departments need to carry out a gender impact assessment which involves:

• Assessing the impact of proposals on the population at large, and certain groups in particular.
• Being responsive, for example, by identifying barriers to gender equality and seeking to remove them, while flagging how each measure is going to drive progress in relation to each of the areas contained within the country’s gender results framework.

All the budget measures flagged as having the potential to improve gender equality are placed in a ‘map’, which is then analysed by the department of finance as well as the Minister of Finance and the Prime Minister during the budget process.

As a result of this process, Canada has taken forward a brand-new policy in relation to affordable childcare where the cost of childcare across every province will reduce to $10 a day by 2025. This is a concrete outcome of using gender budgeting as a tool for closing gender gaps and suggests childcare provision can be the solution to some key current economic problems, such as closing the fiscal costs of gender inequality.

Tangible results: lessons from Vienna’s kindergarten model

While Scherie’s presentation focused on the ‘process’ and rationale that led Canada to investing in childcare, our second speaker, Peter Huber, Senior Researcher at the Austrian Institute of Economic Research, presented the results of a study on gender budgeting commissioned by the city of Vienna. This study was meant to evaluate a range of headline measures implemented in the city, including its free kindergarten model.  

Peter explained that before the free model for kindergarten was introduced in 2009, there was an acute problem with a lack of places being available, and the political debate centered around the impact of this on the city’s increasing ethnic and social divides. A new kindergarten model was envisioned to tackle this issue.

On 1^st September 2009, the council published its financial support package for childcare facilities. This support was dependent on the child’s age and ranged from €60 to €1,230 per child per month. Under the new scheme childcare facilities received:

• Fixed support for all children in Viennese kindergartens of between €60 and €240 per child;
• A care support payment for children with their main residence in Vienna (€137 - €226 per child);
• An administrative grant (per group) of between €500 - €1,500.

As the goal was to find new providers, this financial support particularly targeted the private and non-for-profit sectors. To avoid neighboring federal states taking advantage of the policy, there was an additional bonus for children who were residents in the city. The budget developed from the years 2009 and 2010, and the programme was sizeable: €1,250 million, which in the long-term represented 0.3% of the Vienna’s GDP.

The study looked at the impact of the kindergarten model on women’s labour supply, particularly women between 20-29 years of age. The study compared the participation rate in Vienna pre-reform with that in other provinces of Austria who did not introduce any changes, and the participation rate post reform. The results showed:

• An increase in women’s participation rate of 1.5%;
• An increase in women’s employment rate of 1.2%;
• An increase in women’s hours worked: 0.7 hours per woman;
• A reduction in women in overqualified employment of 0.8%; and
• Higher effects among:
  • Single mothers (substantially);
  • Women with children under 3 (moderately).

Regarding the macroeconomic effects of this expenditure, the study also captured the effects on employment and gross value added (GVA). Figures on return of investment were not part of the original study as the Austrian system of transfers within the state implies that all revenues are accrued by the central state and the regional government only profits marginally from any changes in the economy. However, upon our request, Peter and his team very kindly checked this ahead of the webinar. Based on investment of €360 million, there is a return from both taxes and social security contributions of approximately €302-320 million. This means that if the state is considered a unit, the policy was 80% self-financing. However, Austria is a federal system, which means that Vienna only gets €20 million of these revenues. Therefore, for the city, this was not a self-financed programme.

Peter’s presentation further attested to the efficacy of gender budgeting to increase gender equality and provided insights on the economic benefits of investing in childcare. Yet, Peter acknowledged some of the limitations of the study, including a lack of information on children’s educational outcomes. This question was, however, discussed as part of the webinar’s last presentation, as explored below.

Economic gains in the long term: investing in children

Our final speaker, Jonathan Broadbery, Director of Policy and Communications at NDNA Scotland, brought the focus back on to the UK and Scottish context, drawing attention to the potential of investing in childcare for tackling poverty in the long-term.

Jonathan started off by asking the question “is childcare expensive?” While OECD figures usually show that the UK has one of the most expensive childcare systems in proportion to average earnings, comparisons with other countries shine a light on the issue.In countries such as Germany, France or Sweden, increasing public investment sees a decrease in the cost of childcare to families, while in the UK and New Zealand, a relatively low level of investment from governments leads to a higher proportion of income being spent by parents on childcare. Therefore, the question is not whether childcare is expensive, but what happens when there is investment (or lack thereof) in this area.  

Jonathan highlighted why investing in the first five years of a child’s life is crucial for the child’s development, and the impact that this has in the long term on the child and society. Research by the London School of Economics found that the lack of early years support costs England 16 million pound every year, and 40% of the disadvantage gap at age 16 has already emerged at age 5. This is well illustrated by Professor James Heckman whose research demonstrates that if we don’t get it right in early years, closing the inequalities gap becomes much harder (and costly). Jonathan argued that, with Scotland’s First Minister, John Swinney, identifying the eradication of child poverty as his “first and foremost” priority, budgets should align with this commitment.

Yet not all interventions need to be costly. Evidence from NDNA’s Maths Champion programme, which is focused on embedding mathematics into play and activities in Early Years settings, showed that within the space of 9 months, children in this low-cost but high-impact programme were able to make an additional three-months’ progress in their learning.

However, when governments do not get it right, it becomes increasingly difficult to achieve the full benefits of investing in early years. A recent survey by NDNA showed that 70% of providers expect to operate at a loss or merely break-even due to ELC funding not covering all costs for the delivery of the policy. Johnathan suggested that the adoption of the UNCRC (Incorporation) (Scotland) Act 2024 this year may become a crucial tool to correct some of the pitfalls in ELC implementation, and a mechanism to scrutinise the impact of policymakers’ decisions on children and children’s policies.

Conclusions

This webinar demonstrated that framing ELC as a cost to the economy misses the links between ELC investment and the fiscal and wider gains associated with greater gender equality and children’s development. Scotland has, until very recently, had the most generous ELC offer in the UK, yet the webinar showed that overall, the level of investment in childcare in the UK falls short compared to other countries, with parents paying the price for this shortfall. In times of tightening budgets, managing and planning for the delivery of public services is crucial. However, there is a need to start examining the resources required to improve and expand the current publicly-funded offer if we want to reap the economic benefits.

What more can we learn from other countries’ approach to childcare? Find out in our next (and last) webinar of this series!

This webinar series is supported by Oxfam Scotland

News! Fa'side Women and Girls Group Award Winning Work

Fa'side Women and Girls Group has been recognised for its inter-generational approach to its cost-of-living project jointly delivered with Making Rights Real and The Scottish Women's Budget Group. 

At the Generations Working Together awards in the Scottish Parliament the group were awarded the valuing generational inclusion and diversity prize. 

This project aims to understand how the cost-of-living crisis is impacting on women in East Lothian and how this is exacerbating experiences of inequality.  As well as identifying responses needed from East Lothian Council and other decision makers.  The project has been running since 2021.  

Clare McGillivary, Making Rights Real and member of Fa'side Women and Girls Group said:

'to be recognised in this way is fantastic, its testament to the hard work of all members over the last 12 years and shows the importance of us working across the generations to demand and protect each others human rights.'

Heather Willams from The Scottish Women's Budget Group said:

'This work has been truly innovative bringing women from across the generations together to use  gender budgeting and human rights approaches, to address issues which are important to women and girls in the area.' 

Jude Currie, Vice-Chair of Generation Working Together:

'Huge congratulations to Fa-side Women and Girls Group in Tranent on your GWT Generational Diversity & Inclusion Award. Ensuring there are safe, inclusive and supportive ways for groups of women and girls of all ages to gather, connect meaningfully, break down stereotypes, and empower each other just has to be celebrated. Seeing you work intergenerationally to identify needs and effect change has clearly been inspiring to so many in your community and beyond. Well done!'

Editors note

• Initial findings from the research can be found here https://www.swbg.org.uk/content/publications/SWBG-FWGG-Briefing-final.pdf
• Video from Generation Working Together https://vimeo.com/960281487

About the Organisations

• The Scottish Women’s Budget Group (SWBG) is an independent analysis and campaign group that aims to promote gender analysis in public policy and public finance decisions through budgetary processes. 
• Making Rights Real is a grassroots human rights organisation that supports communities to name and claim their rights.
• Generation Working Together is the nationally recognised centre of excellence supporting the development and integration of intergenerational work across Scotland.

Picture from left to right: Heather Williams, Loreen Purdoe, Katie McFarlane, Clare MacGillivary, Charlie Steele, Kaukab Stewart MSP 

Women’s Work: The Juggling Act of Multiple Jobs

Guest blog by Louise Lawson, Lecturer in Public Policy and Health Policy in the School of Social and Political Sciences, University of Glasgow

The exhibition ‘Women’s Work: The Juggling Act of Multiple Jobs’ built on research based at the University of Glasgow exploring women’s low paid employment, highlighting issues around multiple paid and unpaid work, caring responsibilities and health and wellbeing. The project and exhibition provided unique and timely insights into the key features of the women’s work, caring and health, detailing the lived experience of multiple low-paid employment in the UK today.  The exhibition will be turned into an online resource and will be available for charities and third sector organisations. It showcases a selection of the research findings alongside artworks and filmed personal testimonies of women working multiple jobs.

Over 100 women were interviewed for the research project. The sheer hard work of many women working multiple jobs was striking: many working five, six or seven days a week, early starts, non-standard hours, stretched hours, but still “skint”, “working for nothing”, and “squeezing it all in”. Many felt their work lacked recognition and value: “we are just numbers”, “absolutely done in”, and “one day I will not have to suffer this”. Metaphors were used to describe the often relentless nature of multiple low-paid work: “juggling act”, feeling like a “hamster in a wheel”, “on a rollercoaster”, “forever on a loop”. Yet there were also stories of joy and determination with some women dedicated to and finding fulfilment from their work, seeing it as a route to something better and optimistic for the future”.

Have your Say

A key aim of the project was to give voice to women in multiple low-paid employment, and to provide opportunities to raise the profile of women’s work, paid and unpaid. We are taking our research findings to the Scottish Parliament at the end of May.

If you are working multiple jobs, or have experience of working multiple jobs, and would like further information or some involvement in our work then please contact Louise Lawson louise.lawson@glasgow.ac.uk

Recognising the needs of parents of multiples in the upcoming Programme for Government

Joint blog by Carmen Martinez, SWBG's Coordinator, and Carole Erskine, Head of Policy & Campaigns at Pregnant then Screwed Scotland.

The last couple of weeks have seen Scotland gripped by political turmoil, and for the second time in just over a year, the country has a new First Minister. The Scottish Women’s Budget Group and Pregnant then Screwed Scotland would like to congratulate Mr Swinney on his appointment and take this opportunity to highlight one of our shared asks for the upcoming Programme for Government: extending the funded Early Learning and Childcare (ELC) offer (1140 hours) to children of multiple births at the earlier age of 2, alongside children from the vulnerable category group.

Current context 

In August 2021, the Scottish Government introduced a new funded ELC offer, which provides all families with up to 1140 hours per year funded childcare for all three- and four-year-olds. Two-year-olds from households facing the most socio-economic disadvantage also qualify, with the Scottish Government using this investment to improve outcomes for children. 

While our organisations recognise that targeted support is needed for low-income families, the reality is that with the average cost of a full-time nursery place for an under three being £13,861.12¹ per year, more and faster action is required to improve affordability and accessibility of childcare in Scotland. We are campaigning for universal childcare offered to families from the end of maternity, though we recognise  this is something that might take a bit longer to achieve. In the meantime  it is crucial that the upcoming Programme for Government takes into account the particular circumstances that parents of multiples find themselves in.

A's story 

Perhaps no one can illustrate this issue better than ‘A’, a mother we have been in touch with for the last few months. Here is her story:

“I am a teacher, and my salary is £53,000 as I have a promoted post. My local nursery has put fees up from £56-£73 over the past year and a half, this will only continue to rise. I know that this increase has a huge impact on many families, but can you imagine having 2 or more children to pay childcare for when you have a multiple birth. As a family we have a mortgage which is cheaper than rent at £870, and we own one car, we have no credit cards or overdrafts and carefully planned our second pregnancy. My childcare costs per week will be £700, £600 for the twins’ nursery fees and £100 for my child’s morning and after school club. For a four-week month, this will equate to £2800 and for a five-week month this will be £3500. You get no discounts for twins attending nursery and I have had to take two years off work as the waiting list for twins has been longer and the earliest I could get a place was August 2025 (the nursery stated that as I have twins this adds to the pressures of them finding me a place earlier ). My take home salary after pension and student loan fees is roughly £2700 so ultimately, I cannot afford to go back to work. This will mean that when the mortgage renewal is up next year, we face the possibility of having to sell our home as both incomes are needed. It truly is working poverty. No matter how many times I think this can’t be, the truth is that this is now our reality.

In Scotland in 2022, there were 622 twin births and 9 triplet births. This was 1.36% of all maternities or 1 in 74. Currently unless you are on benefits there is no support for parents of multiples towards childcare costs or anything which you need times 2 or 3.

At a recent conference which I attended based on childcare provisions in Scotland all the organisations present stated that little to no consideration had been given to the extra financial burden which parents of multiples face. I am worried that the voices of those with multiples are not being considered and it must be as we suffer more so than any other parents due to increasing childcare costs.

I think everyone in society would agree that those with multiples need extra support, everyone who I meet asks how will I be able to afford childcare as it’s bad enough paying for one , my answer is always ‘ I don’t know ‘ , for the first time in my life I do not know whether I can afford to go back to work to a job I love and that I have worked so hard to achieve and I face the prospect of losing our home.  We cannot be forgotten when making family and childhood policies, we deserve better, and we need support”.

What we are asking for

The lack of consideration of the unique position of parents of multiples in the ELC policy is likely to have been an oversight. 

That’s why we ask the First Minister to recognise the needs of parents of multiples, and to include them within the policy guidelines as part of any changes to the ELC offer in his upcoming Programme for Government 2024/2025.

Footnotes

1. Childcare costs: How much do you pay in Scotland?