Parents with children in the UK currently have difficult decisions to make in balancing the costs of childcare with work.
Not everyone wants or needs to return to work after having children and similarly, not all parents desire to remain at home any more. However, for many dual or single parent households, being a working parent can be a financial or career necessity or at the very least, a choice which many wish to be able to consider.
The UK currently has some of the highest childcare costs in Europe. It does however have relatively high overall salary figures in comparison with some other European countries, although stark contrasts between higher and low earners prevail. Also enduring is the gap between gender pay at all levels and which the government is planning to tackle with forthcoming mandatory pay audits and the sharing of parental leave.
In addition, making current headlines as part of its pre-election raft of proposed policy changes (akin to other major parties), the present government has just announced plans to provide a childcare subsidy (the Employer Supported Childcare Scheme) worth up to £2,000 per child from 2015, to parents (including those who are self-employed) with a joint income of less than £150,000 a year. This allowance would be granted per child and apply to children up to the age of 12. Parents paying 80% of childcare costs up to £10,000 per child to a registered provider would get the remaining 20% (rebate) tax free. Or, to express it in simpler terms, for every 80 pence paid by parents, the government will pay 20 pence. At present, there is already a taxation-free childcare voucher scheme which companies and employees can benefit from but the uptake from companies has been much lower than desired and thus there has been pressure on a future government to do much more.
So if this government or a new one succeeds in bringing in a substantial change to the provision of childcare and most importantly, to the cost of this care, how is this likely to affect employees and employers? In the long-term, this may lead to a greater pool of available and qualified female labour and an increasingly diverse set of choices which employees (of both sexes) may wish to make and which employers will need to consider. The opportunity costs (of income and career) especially for females, of having a child would also be expected to fall. However, it is unlikely to bring about any immediate transformation into a more forward-thinking Norwegian/Swedish type of labour force as the proposed plans by the current government are caveated with a 7 year phasing in period. Notwithstanding the actual result of the next general election, why such a long period would be necessary and whether this type of scheme will truly address all the prevalent issues, remains to be seen. However, it is certainly an area which is likely to be of increased interest to both employers and employees in the future.