More than 8,000 people have given up offering child care in England in just four years, more than a tenth of the total, figures from the education watchdog Ofsted show.
Many blamed increased regulation and paperwork, relatively low pay and changing lifestyles for the drop.
They might also have mentioned the rise in the cost to beome registered. Yes, I know, one anecdote does not national data make, but my stepdaughter certainly gave up on it because of the increase in costs, both of time and money, required to be on the register.
An entirely personal position is as follows: So someone decided that subsidising childcare would be a good idea. Perhaps it is and perhaps it isn\’t, but if subsidy there is going to be then there has to be (in that bureaucratic mindset) a system for checking that taxpayers\’ money is only going to those who "ought" to be childminders.
Thus we need a system of registration, regulation and inspection. This of course all costs money, the largest chunk of it falling (perhaps in time more than anything else) upon those being inspected. The cost of the provision of the service thus rises (or, if you prefer, the price received for providing it falls) and we all know that supply curves trend upwards with price.
So at the same time as we\’re subsidising demand for places, we\’re reducing supply of them. But then the subsidy means that parents can and will pay more for places, thus raising the supply again.
Quite how the balance works out isn\’t really known: it\’s possible that the higher costs in the system, in time and regulation, will be greater than the cash subsidy poured in to pay childminders more. We could therefore end up with a new equilibrium whereby we have more expensive childcare but less of it.
New Ofsted figures show that the number of registered childminders in England fell from 72,700 in June 2004 to 64,300 in the same month this year – a drop of 11.5 per cent.
When other forms of child care such as creches and nurseries are included, the figure fell by just over 7,000.
Not conclusive, but at least at pointer. One the one hand the extra money available to pay for it should drive up the number willing to offer the service. On the other, the increase in the cost of providing it (that regulation) will reduce the price received and thus the supply. And, as appears to be the case, the nett effect is a reduction in the availability of child care.
Not what you expect from something you\’re subsidising.
Perhaps just a minor case of something that wise businesses have known for a long time. Never even apply for a govt. subsidy for the rules and regs they will impose upon you as the quid pro quo will cost you more than you\’ll ever actually receive from them.
Also perhaps an interesting message to the bureaucrats. Regulation and inspection are not free: they do cost, the major costs falling upon those who are regulated and inspected, in their time. Just because there\’s no cash changing hands doesn\’t mean it\’s not a cost.