What does the UK budget mean for children in Scotland?

This week, the UK Government announced a significant investment into childcare in England. It was a crucial and welcome campaigning win – spearheaded, amongst others, by the Mums On A Mission group. We know from speaking to parents across Scotland that childcare is still the biggest barrier to (re-)entering work particularly for new mothers as parents told us:   

"It’s too expensive, childcare, it really is.”  

"If I was to go back to work there would be no point in me working because the cost of two children to get looked after is extorsion. I would never afford that."

Yet what does the announcement mean for parents in Scotland? 

To understand possible ramifications of the funding boost for childcare, it’s prudent to have a look at the bigger picture. Astonishingly (for those without a child in childcare), the UK has the third highest childcare costs in the world, as a percentage of earnings. In spite of this, the childcare sector is struggling and at the brink: it is significantly underfunded and staff are paid very little. This is at odds with the required skills, and the importance and value that should be put on caring for our youngest citizens, and the crucial role childcare workers play in ensuring future outcomes for children. Many settings are closing because of increased running costs and low staff retention. Increasing provision in this environment will require more than a cash injection. 

So what are the proposed changes that affect Scottish parents? 

There will be an increase of the maximum amount working parents on Universal Credit can claim back for childcare costs. Working parents (for two parent households, where both parents work at least 16 hours a week) can claim up to 85% of childcare costs up to a maximum of £646.35 for one child. This will be increase to a maximum of £951 for one child, and from £ 1,108.04 to £1630 for two children. This support can now be paid up front rather than in arrears, which currently is a substantial barrier for low-income families.  Both of these changes will have a significant, positive impact for families on the lowest incomes. 

The increase of free hours in England is of lesser relevance in Scotland as the current Scottish offer exceeds in many ways the proposals for England. Scotland already has a universal offer equivalent to 30 free childcare hours for 3 and 4 year olds in place (i.e. not dependent on working status of the parent), which also extends to 2-year-olds in low-income families. However, the big change in this week’s budget is that from September 2024, free hours will be available in England for babies from 9 months, conditional on parents being in work. There is currently no such part of the current Scottish offer. Through the Barnett formula, Scotland will receive £320m additional funding – although there is no requirement to invest this into childcare.  However, the Scottish Government committed in its manifesto to extend funded hours to 1-year-olds (with the poorest families paying the least) and to increase wraparound care for school age children by the end of this parliamentary session. This additional funding could be an opportunity to fast-track the implementation of this commitment which we know, from speaking with parents – would be very welcome.

Regardless of how this additional funding is spent in Scotland, a number of challenges remain and these are similar to those experienced elsewhere in the UK. A significant expansion of childcare requires the expansion of the childcare workforce as well as enabling settings to accommodate an increasing number of very young children. With persistent underfunding of the childcare sector and low pay of childcare workers, this week’s commitments are in jeopardy. 

For Save the Children, it is concerning that the purpose of the investment is not to improve outcomes for children but exclusively to increase productivity and economic growth. This risks throwing out the baby with the bathwater: It may lead to parents, particularly mothers, being coerced into work. Many parents/mothers want to work and childcare costs are a significant barrier, but others believe it is best for their child to be cared for by a parent and that they should not be coerced into paid labour, that their work in raising a child should be valued as a significant contribution to society. So, for us, it is choice for parents – and particularly mothers – that needs to be baked into any childcare reforms, north or south of the border. 

What is needed is to ensure that parents, regardless of their choice, know their role as their children’s first and most important educators is valued and supported in financial and practical ways. It is only right to remove employment barriers for parents who want to (re-) enter paid work, but no parent should find themselves in a precarious financial situation regardless of whether they choose to work or to care for their child at home. Children’s experiences in the early years matter, and we need both a valued and properly resourced early years workforce and to value and support parents in their crucial role. Only then will the system truly give today’s children the best start for life.