Above-inflation rise in cost of childcare set to drive parents out of work

A combination of pay cuts and freezes, reductions in Working Tax credit and above-inflation hikes in the cost of childcare are forcing many parents out of work, according to a recent report. Many organisations are now at risk of losing some of their most valuable employees. What can employers do to support working parents?

The study by national childcare charity the Daycare Trust shows that the hourly rate for nursery care for an under-two year old increased by 5.8% last year, and by 3.9% for a child over two. A part-time, 25-hour nursery place is now setting parents back by around £100 a time. By contrast, wages rose by a mere 0.3% over the same period. Government cuts to tax credits have also meant that since April last year, 44,000 families have ceased to be eligible for support.

This raises the possibility of many parents finding that continuing to work no longer makes financial sense. In turn, this could lead to an exodus of valuable skills and experience from the workforce and an increasing number of families falling into financial hardship.

There are several ways in which employers can help working parents to remain in work without it breaking the bank. Flexible working arrangements such as flexi-time and home-working can make an enormous difference to staff who are struggling to balance work and family commitments. Childcare vouchers, while cost-neutral for employers, can help save a basic tax rate earner as much as £1000 per year on the cost of childcare. Such a saving could mean the difference between staying in work and giving up for many people.

Acas provides support for employers through training in the implementation of family-friendly work practices and the pdf Advice leaflet - The right to apply for flexible working, A short guide for employers, working parents and carers [98kb].

Visit the Acas training and business solutions area for more information.

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