Trade Association Update: March

The world of work hasn’t just changed because of Covid. Other contributing factors are an ageing workforce, new technology, shifting perspectives on work-life balance, and an increased number of people dropping out of the workforce due to health problems or to manage caring responsibilities.

Whatever size of business or sector you operate in, access to people and skills is going to present a challenge in one way or another. According to the Bank of England, UK labour supply will barely grow at all by the middle of this decade. We’re also suffering from worryingly high levels of economic inactivity, with 1.7 million people wanting to work but facing barriers that mean they can’t.

There’s no understating the size and scale of this challenge and the CBI has called for action to boost affordable childcare provision; support employer health interventions - by extending the expenses and benefits system - and change the Apprenticeship Levy into something that works better for business.

We really are at a crux moment on people and skills. The sooner we all step up, the sooner we’ll reduce inflationary pressure, increase productivity growth, and deliver prosperity for all.

Emma Pinchbeck, CEO of Energy UK

Childcare is like energy: it needs to be affordable, secure and fit for the modern economy.

We are in the middle of a once-in-a-generation energy crisis. But as CEO of the energy trade body, the most stressful thing that happened last week was my oldest child being sick over the floor of the nursery at pick-up. She was fine (it turned out that she’d been eating literal mud cakes) but if this happens to your child they rightly can’t go to formal childcare for at least one or two days. “Why couldn’t she just do it on the street?” asked my husband, half-jokingly – because without childcare, our working week is toast.

I interviewed for my job at Energy UK in 2019 when my daughter was 6 weeks old. I’ve recently returned to work after the birth of my son in May 2022. This is a blog about childcare, but I think it’s also true that without flexible working, a partner who works part-time, AND formal childcare, it would be challenging to keep breastfeeding, manage the unruly three-year-old, and be a CEO. It’s a joy and a privilege to have children and to be well supported by Energy UK, but most weeks feel more like a high-speed crash than a juggle. It is good to see more research showing that having a better work-life balance improves productivity.

Childcare was a (brief) priority of the government under Liz Truss and there is some discussion of it in the press. But in my experience, the discussion about childcare between working parents is relentless, with worries about cost, availability and quality of provision. The UK has the third most expensive childcare in the OECD. Full-time nursery for children under two costs almost two-thirds of a parent’s weekly take-home pay in England. In London, that rises to 71% of earnings. My brother, in a professional job outside of London, cannot afford to send his son to nursery for more than one day a week, although his wife would like to work more. The government and businesses recognise the economic value of higher education, and of training skilled workers: I’m not convinced we put similar thought into nurturing talent throughout working lives.

The government does provide 15 hours free childcare in term time for three-year-olds until they start school, some support for two-year-olds, some vouchers, tax-free childcare, and tax credits. That is welcome and necessary, but the bureaucracy is challenging and differs across devolved regions. The subsidy is also insufficient and complex for providers who are failing at a record number, and attracting qualified staff is difficult. I love my daughter’s nursery provider but she had five different key workers in her first year. Childcare practitioners are underpaid, often lack training and development opportunities – or, ironically, affordable childcare.

This exacerbates an existing problem of availability. In 2019, I registered for 5 nurseries when I was 13 weeks pregnant and got a single nursery place. In 2022, I applied for a hypothetical second baby place BEFORE I was even pregnant, and still only got a place for three months after I returned to work (which is why if you’re on a call with me at the moment you may also be joined by a small human trying to chew my ear). There is research to show that children benefit from attending formal childcare, particularly those from disadvantaged backgrounds; wrap-around and after-school support has been shown to be important for older children too.

Childcare isn’t necessarily about gender, but it is largely women who take the hit when affordable childcare is unavailable, and women who organise and provide it. Many of the second-time mums I know will not go back to work full-time after their second babies, or at all. These are doctors, teachers, journalists, academics, civil servants, business leaders, freelancers, manufacturers, small business owners. We love our children but we are also invested in our careers and are valuable to the economy. The ONS reports that women not working to look after family has risen by 5% in the past year, the first sustained increase in at least 30 years. There is a global race for skilled workers; providing child-care to women could be worth around $3trillion to the global economy each year.

Some of the mothers I know are only returning to work because they are terrified that a career-break will damage their prospects permanently (the gender pay gap yawns after women have children) and they work for free, with all their income going to childcare, rather than into the wider economy. One parent at my daughter’s preschool is a teacher and childcare costs more than she earns to teach other people’s children. One day, her three-year-old will be sick on the nursery floor at pick-up time and she’ll think: that’s it, this is too hard, I quit.

So, if you are a business leader and your company has targets for the proportion of women in your management teams, or even for overall productivity, then you should know that 58% of women surveyed last year were looking to change jobs, increase their hours, take on a promotion, or do additional work but that 49% of them said they couldn’t because of a lack of childcare. There’s a role for business to step in where Government is failing.

Every week we read about the cost of living; productivity; getting economically inactive adults to work; declining birth rates; rising attainment gaps between advantaged and disadvantaged children. It is so rare that childcare features as part of these discussions. Unless businesses and government start seriously talking about childcare, the future economy will also be toast.