The Observer view on Liz Truss’s proposals for early years childcare

Among the enormous social changes of recent decades is the fact that having children need no longer curtail a woman’s career. In the early 1970s, only around half of women participated in the workforce; since then, the gap between male and female labour market participation has shrunk dramatically. And in recent years, researchers have found that young children benefit from formal childcare before they start school; it is associated with better cognitive and social development for children from all backgrounds, particularly for those from disadvantaged households.

Having a decent system of subsidised early education and childcare is therefore doubly advantageous. It can help to close the attainment gap. It reduces sex-based inequalities and promotes the economic wellbeing of families by lifting the key barrier to returning to work that disproportionately affects mothers. And it is good for the exchequer: much of the money spent subsidising childcare is recouped by the Treasury in the form of higher tax revenues as a result of higher lifetime female employment and earnings.

But in the UK, there are serious gaps in our provision, which proposals floated by the government last week would make even worse. The UK has the third most expensive childcare in the OECD. A particularly big problem is the cost of childcare for one- and two-year-olds, before the free entitlement of 30 hours of childcare a week for 38 weeks of the year kicks in at the age of three. Research out last week highlighted how it now costs almost two-thirds of a parent’s take-home pay to put a child under two in full-time nursery. And, worryingly, the proportion of women staying out of the workforce to look after family has increased by 5% in the last year, the first increase in more than 30 years, according to the Office for National Statistics. Little wonder women report they are having to leave work because childcare is too expensive. Low margins, rising wages and other costs have also reduced the number of nursery providers in the market in recent years, with deprived areas particularly affected. Last year’s drop in the number of nursery providers was the biggest for six years.

Parents urgently need access to more subsidised childcare, especially for the under threes. Ideally, the government should pledge to create a system of universal free childcare for all children under the age of five and flexible wraparound care for school-age children. This would boost the economy and promote chid wellbeing.

Liz Truss, however, has floated proposals to move the system in the opposite direction. She is said to be considering scrapping minimum ratios of adult to children in early years settings altogether, in a misguided attempt to reduce the costs of childcare. This is likely to reduce the quality and safety and create a two-tier system in which children in poorer areas are most likely to be consigned to poor-quality and unsafe provision. And she is also reportedly pursuing proposals to convert the subsidy for three- and four-year-olds into a £2,000-a-year cash voucher that parents could instead hand over to friends or family in informal arrangements. This is likely to increase the attainment gap by social background, reduce the availability of formal childcare even further if parents decide to withdraw their child as a result and inflate the price of formal childcare for all parents.

The best that can be said about this proposal is that it looks unlikely to happen: the Tory party has lost so much confidence in Truss it seems increasingly improbable she will be able to get much reform through.