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Free preschool childcare and after-school clubs ‘could save families over £6000 a year’

Increasing free childcare would also increase government revenues as more parents could go back to work (Ian West/PA) (PA Wire)
Increasing free childcare would also increase government revenues as more parents could go back to work (Ian West/PA) (PA Wire)

A family with young children could save between £620 and £6,175 a year if there were free preschool childcare for all and more funding for after-school clubs, according to a new report.

The analysis by Save the Children produced with the Institute for Public Policy Research (IPPR) found that taking these measures would increase government revenue as well as helping families.

They are calling for all children to receive free childcare until the end of primary school, which they say would allow more women to go back to work and lessen the attainment gap between rich and poor children in their early years.

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Some parents are having to leave their jobs because the cost of childcare has become astronomical and many schools cannot afford to put on breakfast and after-school clubs to support those who are working.

The report found that a free childcare guarantee could mean up to 700,000 households with 1.6 million children see their incomes rise.

They say the move would save them between £620 and £6,175 a year based on the current cost of childcare, depending on their circumstances.

For example, a working single parent with a two-year-old would save £6,175 per year under this guarantee, or £623 if in receipt of universal credit and making use of the childcare element of universal credit.

A working couple with children aged one and three would save £4,116 per year in fees, whilst a dual-earning couple with children aged four and seven could save £3,09, the report said.

Giving every household the chance to access affordable childcare could cut almost £2.8bn from the government’s spending on social security, the report found.

It also shared steps they said the government could adopt that would boost the economy and lead to growth by getting parents back to work, including increasing the funding for free childcare as well as increasing the offer for children aged three and four to 30 hours a week.

The report also recommended extending 15 free hours to all two-year-old children. Eligibility would start at the end of paid parental leave.

It also suggested increasing funded hours for children who are two and those under two.

Wraparound care should also be extended from 8am to 6pm for more schools, according to the report. Schools should also offer a number of after-school activities during term, it said.

Shadow education secretary Bridgit Phillipson endorsed the report, saying it’s further evidence for a “new, modern childcare system”.

She said: “Labour will deliver a new system to give children the best start in life and parents choices, enabling them to get back into work or to increase their hours and give our economy the growth we need.”

Head of child poverty at Save the Children, Becca Lyon, told the Guardian: “Parents we speak to, regardless of their income, are crying out for the childcare system to change.

“If made a reality, a universal childcare guarantee would be life-changing for families – creating an easy-to-use childcare payment system for all, dramatically cutting childcare costs, ensuring the nurseries their children love are properly funded, and providing free breakfast and after-school clubs when children are older.”

The report comes after the Institute for Fiscal Studies last month warned that government funding for early years education and childcare was likely to fall by 8 per cent next year in real terms.

That’s because childcare providers’ costs are set to rise by nine per cent between 2022-23 and 2024-25, wiping out a funding rise from £3.6bn to £3.75bn announced at the last spending review.