Money & Daddy is a weekly column about parental finances, published on Wednesday mornings. Got a topic or problem you want me to tackle? Email me: [email protected]
The amount of money the Government is now prepared to spend – and the levels of debt it feels justified in taking on – is truly staggering.
Yesterday, the Office for National Statistics revealed the extent of Chancellor Rishi Sunak’s splurge. April, May and June were the three biggest months on record for government borrowing, peaking at £46.9bn. That’s more than double the worst month of the financial crisis.
Forced to bail out millions of workers and faced with plunging tax receipts, there was little alternative for the Treasury but to borrow, borrow, borrow and then spend, spend, spend.
But as the taps are slowly being turned off – the furlough scheme will be wound down by the end of October – it is quickly becoming clear that other sectors and parts of society are going to need a bailout too.
Now, as Boris Johnson urges workers to return to the office (and, more importantly to the Treasury, the railway tickets, Pret lunches and post-work pints) it is clear parents must be at the front of the queue for help.
As I’ve written before, Britain’s early years childcare sector is a basket case. The bizarre mixture of very little financial help for parents of children under three and 30 hours a week of free care for older children has meant new parents are forced to subsidise nursery costs.
Already on the edge, the pandemic will push many nurseries under for good. Mr Johnson has blown his horn signalling the great return to work at the start of the summer holidays. It remains to be seen whether employers will go so far as to force staff back, though anecdotally this has already been happening in the financial districts of the City and Canary Wharf for weeks.
This week Labour leader Sir Keir Starmer said parents would be in an “impossible position” if they were made to go back to work without adequate childcare and summer clubs. Fees for the latter are expected to triple this year as too many parents chase too few places. This is despite the Government pledging billions of extra funding for primary and secondary schools, and an additional £650m in “catch up” funding which could pay for individual tutoring for children who need it most.
In many families, retired grandparents have been plugging the gaps between playgroups and nursery for pre-school kids. Now lockdown is easing, this army of vital volunteers is slowly returning to the front line, but will be forced to quickly barricade themselves away again in the event of local lockdowns or fears of a second spike.
Two things are needed. The existing tax-free childcare scheme for under-threes must be made more generous and have its spending cap removed.
Secondly, private nurseries must be given direct funding before it’s too late. More than 14,000 providers have already left the market since 2015, according to sector trade body the Early Years Alliance. Without urgent support, many more will join them.
Have a question or comment about parental finances? Email me: [email protected]