Childcare costs in the North East ‘cancel out wages’

Working parents are being crippled by childcare costs with one in five North parents effectively working for nothing, figures today reveal.

New research suggests more than a third of parents in the region with children aged up to five say that one earner brings home less than £100 a month after childcare costs have been paid.

The typical amount brought home by the lower earner in a household is £212.50 after childcare and work costs have been taken into account.

Businesses have now called on the government to extend childcare support for parents with children aged one and two.

The CBI employers’ organisation said that this, and better paid jobs in the North East, would help raise family incomes and get more adults into work.

Regional head of the CBI, Dianne Sharp, said:

“In the aftermath of recession, more jobs were created in sectors with below median wages than jobs in sectors with above median wages.

> And who by ?  How many of these low wages were decided by CBI members ?

“Childcare costs will remain a problem if the region fails to provide higher skilled and better paid jobs.

“Work has to pay and it’s regrettable if childcare costs are preventing parents getting back into work.

“This means we need a long-term, coordinated commitment from government to provide affordable, accessible childcare for all so that parents who choose to can maintain contact with the labour market.

“Reducing the cost of childcare for parents is important, but so is increasing the flexibility of hours that it’s available for.

“As the UK’s labour market has developed, a 9-5 approach still predominates in childcare. Nurseries are increasingly offering 8-6, but we need to see more provision of wraparound care in schools through breakfast and afterschool clubs.”

According to the research, by insurer Aviva, about 34% of parents with children aged up to five said they used childcare to enable them to go back to work.

Of these, 48% use a paid for nursery, 33% use a school, 41% turn to grandparents and just 4% use a childminder.

Beth Farhat, regional secretary of the Northern TUC, said:

“There is a lot of pressure on women to return to work early because they feel their future career and earnings will be jeopardised if they don’t, but the affordability of childcare makes things incredibly difficult.

“Childcare bills can place a huge strain on many families’ finances and that is one of the reasons why the TUC believes Britain needs a pay rise.

“TUC analysis has shown that once inflation is considered the real value of the average full-time wages has fallen by £2,500 since 2010 and that understandably has consequences for more and more families, particularly with young children.

“These figures from Aviva show that over a third of parents in our region are effectively be working for next to nothing after their childcare costs are taking into account.

“It would be a tragic waste of talent in our region’s labour market to lose out on people who want to work but can no longer financially justify it.”

Source –  Newcastle Evening Chronicle, 07 Jan 2015

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