| Childcare is central to the Government's welfare reform programme, being a fundamental service which supports the social and economic prosperity of the UK. Its provision is set to increase sharply in 2000/2001, in line with the National Childcare Strategy, and more especially following the introduction of the new Child Tax Credit in October 1999, given the pre-existing level of excess demand. The current shortage of places is indicated by the fact that there are only 830,000 registered childcare places for 5.1 million children under the age of 8 in England, which gives a ratio of approximately one place to every six children.
The cost of formal childcare is prohibitively expensive, and informal childcare is estimated to account for over half of all childcare. The average cost of childcare for a family with one pre-school child and one child at school requiring after-school and holiday care, is estimated to be around £6,000 each year, which means that a family could typically pay out as much as a third of its income on childcare. Parents spent an estimated £2.7bn on childcare in 1998, and this represented a 3.8% increase on 1997.
The range of childcare services includes childminders, day nurseries, nursery schools and classes, playgroups, out-of-school clubs and holiday play schemes. The fastest growth has occurred in the provision of out-of-school club places and holiday play schemes, which registered 253.7% and 162.7% increases, respectively, between 1993 and 1998. This group was followed by private day nurseries, whose provision of places grew by 56.4% over the period under review.
The proportion of women with dependent children in paid employment outside the home is continuing to rise, and changes in underlying female work patterns are contributing to the growing surge in demand. It is estimated that women will account for 900,000 of the projected rise of 1.2 million in the labour force by 2006. The growth in employment of mothers has also been mirrored by an expansion in the number of women achieving educational qualifications, and a convergence of pay levels for women and men in full-time work.
The early indications are that the unmet demand for childcare services will be met as the Government is committed to supporting working parents and closing the 'childcare gap' in Britain. Around £8.5bn has been allocated to spend on the entire sector and, in line with this, increased provision for childcare. Key Note forecasts show a continuing rise in the number of childcare places for all sectors except playgroups. Out-of-school clubs and holiday play schemes are projected to rise most rapidly, reflecting both underlying demographic trends and the extra Government provision for this age group through the increase in the age limit from 11 years-old to 14 years-old for entitlement to Childcare Tax Credit towards the end of 1999. The rise in childcare places is forecast to be most pronounced in the shorter term rising by 11.9% from 1998 to 1999, boosted by Government funding. The childcare market is expected to slow down towards the end of the 5-year forecast period with an increase of 11.2% over the 2-year period from 2001 to 2003.
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