Building Capacity and Growing the Child Care Industry: Empowering Employers as Change Agents

1. Presentation made by Helen Wilkinson, Director, Genderquake Limited to National Employment Panel, 22 January 2003

2. NCS – First wave of reform (1998-2002) • Building capacity • Growing the child care industry • Developing high quality, affordable and accessible child care – incl disadvantaged groups – e.g lone parents

3. Strategy Unit Review 2002 • Clearer vision • Major new investment through SR 2002 • Reform of machinery of government and delivery structures • Commitment to streamline funding arrangements • Targetted investment in deprived communities • Business development, support and acceleration

4. Four key areas • Approach to lone parents • Business incubation and acceleration • Role of government to stimulate employers • Employers as Change Agents

5. Child care challenge for Lone Parents Panel is invited to consider the following areas for reform: • Concerted action to encourage informal child careers to train and qualify as registered childminders; • Whether some form of benefit can be extended to lone parents and informal carers through reform/modification of child care tax credit; • Policy priorities and investment beyond geographic confines to reach lone parents in affluent areas;

6. Growing the child care industry NCS needs to be underpinned by strategic model of business incubation and acceleration which: • Promotes a mixed economy of child care • Prioritises social enterprise sector in affluent areas as well as pockets of disadvantage • Encourages public-private ventures with matching funds

7. Growing the child care industry ctd… • Mainstreams policy cross departments – integrating NCS objectives into DTI and DWP; • Replicates approach on the ground through key delivery partners – RDAs, local authorities, child care, Job Centres etc

8. Role of government • Policy leadership • Seed investor • Business incubator and accelerator • Delivery on the ground through partnership

9. Employers as Child Care Champions Employers slow to respond to child care challenge: • Cost of providing child care • Few tax incentives or benefits to doing so • Incentives are restrictive and focus around employer involvement as child care providers (not the core business) rather than rewarding them as purchasers and funders (on behalf of employees)

10. Solution? Government creates a more flexible tax incentive structure rewarding employer involvement as investors, purchasers and providers thus accelerating and growing the child care market and ensuring that it is better able to meet parent’s needs

11. Options The Panel are invited to consider a range of options including: • Provider incentives – e.g. extending tax relief to all forms of employer provided child care • Purchaser incentives – e.g. for every £100 invested in child care services/places allow £200 to be calculated against corporation tax (encouraging more child care enterprises and more public private ventures)

12. Options • Principle of matching funds – e.g. strengthen tax incentives for employers to invest in local child care provision with promise of matched funding and the provision of direct start up grants to employers and/or consortia wishing to develop community based childcare

13. Employers as Change Agents The Panel should consider the viability of the following employer led initiatives: • Individual employers/consortia could ring fence dedicated funds to seed invest in innovative child care ventures in catchment areas; • Employers could bridge skills shortage & provide business incubation to local authorities, child care partnerships, & social enterprises - seconding staff with business development and marketing skills for time limited period;

14. Employers as Change Agents And finally…… • Employers could exploit their collective purchasing power through bulk purchase of places for employees, helping to stabilise occupancy rates for fledgling child care businesses;

15. Conclusion • Big Challenges in 2003 and beyond • Demand side – affordability = key constraint, further reform of child care tax credit and level of public subsidy is likely to be needed if lone parents are to benefit • Supply side – government has three main techniques for stimulating supply: seed investment; catalyst for business incubation and acceleration; encouraging employers to become involved in NCS

16. Employers – the weakest link? • Employers are currently the ‘weakest link’ in the NCS delivery chain; • Chancellor has signalled flexibility re tax system – NI and tax breaks – to incentivise employers; • Flexibility is key – Government needs to reward across the board supporting employers not just as providers, but investors/funders, and crucially as purchasers of child care services; • Employers for their part have a key leadership role to play – in partnership with Government and independent of it;

17. For more information contact: helen@genderquake.com.Creche Barriers is also available from www.genderquake.com