High cost of childcare locking many single parents out of work

Posted 30 March 2016

New report from Gingerbread examines impact of childcare costs on single parent employment.

Thousands of London’s single parents are being locked out of employment due to the prohibitive cost of childcare, according to a new report by Gingerbread.

Analysis by the national charity for single parent families revealed that half of single parents are forced to borrow money in order to meet the high cost of childcare in the capital.

And when it comes to returning to work, many single parents have to factor in that cost, often leaving them little choice but to reduce their hours or be forced out of work altogether.  In 2015, one in six single parents in London were under-employed, that is those working part-time who want to increase their hours.

In order to address this challenge, Gingerbread is calling on the London mayoral candidates to endorse Upfront: A childcare Deposit Guarantee, that would see parents supported into the jobs market.

Designed to support parents about to start a new job or increase their working hours, Upfront would help parents arrange care for their children ahead of their first pay cheque, with the GLA directly paying the deposits nurseries and childminders typically require.

Gingerbread Chief Executive Fiona Weir said:

“The guarantee would be an important step towards supporting London’s single parents, who account for one in three families in the capital.

“On average, single parents in London spend roughly half their income after housing costs on a nursery place for a child.

“And for parents of pre-school children, the situation is even more challenging, with little affordable support in place. This, coupled with the tightening-up of eligibility criteria around the 30 hours of free childcare for parents of three and four-year-olds, means significant barriers need to be overcome.

“Making childcare affordable is therefore essential for supporting more single parents back into the jobs market and ensuring that it pays to work. Not least because work is still deemed to be the best route out of poverty.

“Our analysis shows that supporting single parents into work not only benefits families, but also the Exchequer. A five percentage-point increase in single parents’ employment rate could generate £436m-a-year as a result of increased tax revenue and reduced benefits. This scheme would also provide a much-needed leg-up for the thousands of pre-school parents working in London.

“So we’re calling on Mayoral candidates to support Gingerbread’s plan and plug a gap that’s currently not being addressed by any level of government or agency.”

Other key findings of Gingerbread’s analysis include:

  • Half of single parents surveyed said that they had to borrow money from friends, family or banks to pay for childcare in the past two years
  • In 2015, one in six single parents in London (16 per cent) was under-employed
  • A five percentage point rise in single parents’ employment rates could generate £436m a year to the Exchequer with a combination of reduced benefits (£272m) and increased tax revenue (£164m)
  • 4,500 single parents in London will miss out on the government’s 30 hours of free childcare provision
  • 24,000 single parents of pre-school children in London will for the first time be required to look for work or risk having their benefits sanctioned

ENDS

Notes to editors

  1. The full report can be found here: Upfront: A Childcare Deposit Guarantee
  2. The following quotes are taken from interviews with single parent case studies across London:

“I had to give up a really good job because of childcare and have since turned down a job offer a couple of times… Balancing childcare and getting the right job is really quite challenging.”

Liz from Greenwich

“If I want to go back to work full time I would I have to pay nursery costs but for me it’s too expensive. It would cost me £1,580 per month, so I only paid for two days per week will only be returning to work part-time. Even then I have had to borrow money from family, as it still costs me £700 per month.”

Mila from Enfield

“I was considered a high-earner on £35,000 but because of London-waiting I missed out on tax credits and other benefits… I’ve also had to look at other career options because of the fact that I previously worked in hospitality, where there’s a complete lack of flexible hour roles.

Gwyneth from Wandsworth

“So I’ve scaled back my hours to 20 hours per week because I know what financial implications of having to work 9-5 mean in terms of childcare…I also know that come the six-week school summer holidays I’m going to have to give up my job because I will not be able to afford the childcare costs.”

Ife from Southwark

“I was on maternity leave the full 52 weeks and received statutory pay for the first 39 weeks. I then had to send my child to nursery a month early because of the settling-in period and to guarantee a place at the nursery. This meant my child was attending nursery for one month before I even went back to work. It was so expensive and cost £1,100-a-month, in addition to having to pay £200 in advance to the childcare provider to guarantee a place. This meant that I was forced to rely on my parents for the deposit and the first month of childcare until I was paid.”

Thea from Haringey

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