SWBG blog

What’s wrong with childcare in Scotland? A summary

The Scottish Women’s Budget Group (SWBG) is hosting a series of events focusing on the need to further invest in childcare in Scotland. Last month, we hosted the first webinar, ‘What’s wrong with childcare In Scotland? Perspectives ahead of the Scottish Budget 2024/2025’.

Aimed at policymakers and other stakeholders with an interest in improving the current system in Scotland, as well as the public, the webinar explored issues such as the affordability of childcare, availability, and the impact of the cost-of-living crisis on service providers. The webinar featured:

• Insights from SWBG’s 2023 Childcare Survey and Pregnant then Screwed Scotland’s survey data;
• Perspectives from childcare providers via the National Day Nurseries Association;
• Evidence on links between childcare, poverty and work from the Joseph Rowntree Foundation

The webinar also presented an opportunity to discuss recommendations ahead of the publication of the Scottish Budget 2024/2025, and generated a wave of debate amongst those in attendance. Participants contributed their own views and experiences as users and providers of childcare services.

Below we capture the key insights from the webinar.

Looking at childcare through a gendered lens.

SWBG Coordinator, Carmen Martinez, kicked off the webinar with a summary of the SWBG’s ‘2023 Childcare Survey’  findings, drawing attention to the cost of childcare and the impact that the current inflationary period is having on women’s ability to manage this expense. For example, 54% of women told us that they had to make changes to other areas of household spending to manage childcare costs while 30% were struggling with costs. Regarding availability, 38% of all survey respondents found accessing childcare difficult, and 22% found it very difficult (both during the school term and holidays). Those who struggle due to accessibility issues include respondents with school-age children who are unable to find wraparound care which fits around their working hours. SWBG also highlighted some of the issues with the existing 1,140 hours of funded childcare offer, this mainly focused on the lack of flexibility in provision, as only 14% of respondents who qualified for funded hours noted that the scheme fully meets their needs.

We also looked at the impacts that managing childcare have on women. According to our survey, 55% of women said that this has impacted on paid work they could do, with 66% reporting that the cost of childcare has impacted their financial wellbeing, and 48% stating that managing childcare has influenced their decision NOT to have another child. Finally, SWBG brought to the fore the economic impacts of childcare costs on women. Almost 33% of our survey respondents had to reduce their working hours to be able to manage childcare costs (while only 8% of respondents told us that their partners had to reduce their hours). In addition, 20.5% women said they were using compressed hours, arranged informally with their employer to manage childcare. This figure was 14.8% for their partners. This highlights the extent to which the lack of social infrastructure (i.e. affordable and accessible childcare) penalises women, contributing to gender inequality.  

Carole Erskine, from Pregnant then Screwed, shared similar findings. According to their survey data, 65% of Scottish parents are leaving the workforce or reducing their hours due to the cost and/or lack of availability of childcare. In addition, 43% of parents who have seen childcare costs increase in the last 10 months say they cannot afford to have any more children, and 65% of mothers with a child under 12 months say that they either have or will have to cut their maternity leave short due to the cost-of-living crisis. These percentages contribute to the increasing body of evidence linking the cost and/or lack of adequate childcare services to women’s inequality.

The providers’ perspective

An interesting perspective, and one that the SWBG was keen to explore following our Childcare Survey 2023, was the implementation of the funded ELC offer in Scotland. Jonathan Broadbery, Director of Policy and Communications at the National Day Nurseries Association (NDNA), a representative body for private and voluntary day nurseries that are involved in delivering childcare, provided a very informative assessment. He started by pointing out what’s right with childcare in Scotland, recognising where the country sits compared to other UK nations. He highlighted the ambition of the 1,140 hours policy, which center on facilitating parents’ return to the labour market and, very importantly, improving the quality of childcare at a crucial time for children and their development. Other laudable policy principles are affordability and accessibility for 3- and 4-year-olds, parental choice, and its focus on children’s rights.

Jonathan also discussed the differential funding approaches to ELC as well as the impact that inflation is having on providers’ cost-of-operating crisis. For example, whilst 30% of funded hours are delivered by private nurseries, the funding received is not proportional to this, which is exacerbating the recruitment crisis in the sector, but also impacts on parent’s choice and the overall costs of childcare. For instance, parents of younger children face higher costs as providers try to ensure the sustainability of their service. Given these challenges, NDNA calls for increasing investment to pay ‘genuinely’ sustainable rates, improving providers’ business sustainability, and pay for the workforce. Additionally, it would like to see supported employment programmes into ELC and a single ELC account for families to make the system less complex and increase take-up.

Pre-school childcare as an effective tool to reduce poverty

The webinar also discussed other approaches to ELC. Jack Evans, Senior Policy Adviser at the Joseph Rowntree Foundation, spoke about their current project, which focuses on meeting one of the Scottish Government’s three strategic objectives for ELC: poverty reduction. Before delving into the project’s details (literature review, polling with families, public and sector consultations and modelling), Jack noted some key aspects that interact with ELC policy such as the value that parents place on their childcare, the risks of ignoring inequalities in unpaid work, and issues affecting the workforce and providers, which are crucial to finding solutions that can work in the ‘real world’.

More specifically, the project’s context considers work intensity trends (number of working hours that people do) for all families, and for those living in poverty. For example, while the most common working set-up for families is both parents in full-time work, families in poverty are more likely to include one parent working full time, and one parent not working (93% of those not in work being women). Regarding people trapped in persistent low paid work (11% of Scotland’s population), 72% of them are women. Therefore, to avoid exacerbating gender inequalities in the labour market, Jack highlighted that having an ELC offer that moves parents into work is not enough. Instead, parents need to move to jobs that pay at least the Real Living Wage or above, and argued that ELC has a role to play in supporting parents to find better work.

Within this context, the project’s literature review captures previous research on ELC, and it includes a summary of 47 recommendations related to the interaction of work and ELC, such as data collection, parent’s lack of choice, the financialisation of childcare or interactions between ELC and the child benefit payment. This literature review found large gaps about what hasn’t been properly evaluated, for example, the variation in delivery and strategy between local authorities. While this does not mean that there are 32 different ELC strategies in Scotland, there is a certain degree of variation, and knowing ‘what works’ would be key to improve good practice. The project’s literature review also focuses on contradictory findings. For example, while quantitative research shows that families are generally happy with the quality and flexibility of ELC, parents may report a different experience via qualitative research. In this regard, the project’s commissioned polling has revealed that the policy aims of the existing offer match with parents’ needs and what parents want from a new offer is not widely different, with the majority indicating a preference for a funded ELC of between 35 and 40 hours per week. This new offer would increase family resilience. In terms of what this new offer would mean for parents’ work, it would allow parents to increase their work hours (from no work to work, or from part-time work to full-time), to access better paid work (overcoming the pay gap that exists from part-time to full-time work) and more secure work.

While there is more data to analyse, some early conclusions from this project point out that the interaction between childcare and increasing income is not straightforward, and that any considerations about ELC policy must include labour market dynamics. In addition, changes to existing offers must be targeted, for example, to close the dissatisfaction gap between rural and urban settings. Finally, Jack noted that new funding models must be on the table, including the review of the existent universal offer to ease the burden on services and to ensure that people on the lowest income get the necessary support, so Scotland can meet its poverty targets.

Scotland’s incomplete journey on childcare

The webinar made it clear that the issue of childcare in Scotland is far from being resolved. While the Scottish Government’s funded ELC offer has been welcomed by families, its implementation has caused challenges to private and third sector providers, particularly as the cost-of-living crisis has increased their operating costs. This, in turn, is impacting on childcare affordability as providers have no other choice but to increase their fees for 1- and 2-year-olds to ensure the financial sustainability of their service.

Inevitably, existing gender inequality in the labour market and/or persisting gender stereotypes over who does care mean that women are increasingly affected by childcare costs, as evidenced by SWBG’s and Pregnant then Screwed Scotland. What’s the way forward? While increasing the scope of the existing offer was in the mix of solutions discussed, speakers agreed that the Government’s priority should be to improve the implementation of the current funded ELC. But how long will parents need to wait for key improvements to be made? And what will delays mean for them, their children, those working in the sector and the wider Scottish economy?

What's next in the series?

Our second webinar will take place (online) on Tuesday 5th March. Further details will be shared early next week via our socials, so please keep an eye out!

This webinar series is supported by Oxfam Scotland