The Guardian view on free childcare: a subsidy for demand with little thought for supply | Editorial

Britain’s welfare state was conceived to care for citizens from cradle to grave, although changing governments have prioritised different parts of that demographic range. The Conservatives have tended to be most attentive to the older end of the electorate. Pensioners reliably vote Tory; infants have no vote at all. But their parents do, which is why Rishi Sunak’s administration belatedly woke up to the salience of unavailable or unaffordable childcare.

The product of that realisation was a promise to expand subsidised nursery provision in the 2023 budget. Previously, parents of children aged three to four were entitled to 30 hours of free childcare a week. As of this month, parents of two-year-olds (and earning less than £100,000 a year) will be eligible for an extra 15 hours. A further phase of the extension is due in September, with 15 more hours available to infants from nine months, rising to 30 hours by the end of 2025.

The fully extended scheme will mean government is providing about 80% of nursery provision in England, which is forecast to cost over £8bn a year by 2027-28. This advancement of the frontiers of the welfare state is out of character for a Conservative party that is predisposed to push in the opposite direction. There is a tension between the political ambition of the scheme and the ideological instincts of the party enacting it. As a result, delivery looks sure to fall short of what has been promised. The first catch is that entitlement to care does not guarantee a place – not if there aren’t enough staff. The government has acknowledged a shortfall of at least 40,000 nursery workers. There are one-off bonus payments to incentivise recruitment, but that is insufficient compensation for dismal wages.

There is also a gap between the funds that the government allocates and the actual cost of places. This discourages providers from joining the scheme, or forces them to cross-subsidise by raising fees for parents who aren’t entitled to the free hours. As a business model that is more sustainable for nurseries with wealthy catchment areas.

The chancellor is pumping money into the demand side of the equation without much thought about where supply comes from. He is creating a lucrative opportunity for nursery chains owned by private equity, not a model for universal provision on the traditional welfare state template.

But the Tories are disengaged from the consequences of their policy, since they expect to be evicted from office later this year. The post-2024 commitment is intended as a trap for the opposition. Labour is challenged to stick to the Conservative policy or face accusations of “cutting” free childcare, even though the benefits in question do not yet exist.

It is a cynical device and has been dismissed as such by shadow ministers, who instead are promising a full review of early years care. This is wiser than adopting a Tory scheme shaped by short-term pre-election tactics, but Labour will need a more substantial response by polling day.

The Conservatives’ free childcare scheme raises more questions about the future of the welfare state than it answers. There are deep-rooted problems with the way Britain looks after its youngest citizens, and no prospect of solution from a party that is staggering towards its electoral grave.