Woman and child looking at a laptop

How housing associations can help tackle the crisis in affordable childcare.

Published: 27/06/2021

Affordable childcare should be at the heart of Housing Associations' placemaking and employment programmes according to a new report by Peabody and the New Economics Foundation (NEF).

The "Think jobs, think childcare'' report looks at the scale of the affordable childcare challenge, reveals how some housing providers are already innovating to support residents with affordable childcare, and sets out how associations and others can do more to tackle what is one of the biggest barriers to work in the UK. 

The new research follows a Peabody Index report which found that two-thirds (67%) of residents found it "difficult or impossible" to find affordable childcare. Even after Government funding, childcare costs for the average low-income couple in London amounts to £200 net each month. Working parents of young children are 33% more likely to earn the minimum wage or lower and often work fewer hours, with women particularly affected. Mothers of two children earn 30% less than women with no children in the capital.

The UK has some of the most expensive nurseries in the world with childcare workers being some of the lowest paid in society. Statistics from the OECD found the UK to have the second most expensive childcare system in the world and 39% of local authorities in England are seeing providers in their area raise their prices over the last year and 32% are reporting that some providers have reduced the number of free early education entitlement places they offer. There is growing support for an independent review of childcare funding and affordability in the UK with a recent petition gaining over 110,000 signatures.  

To better understand how the social housing sector is engaged with the childcare challenge and supporting working parents, Peabody commissioned NEF to talk to commercial, community and development teams from some of the largest London-based housing associations.  They found that childcare-related work done by housing associations is diverse, including offering commercial properties at reduced rent to nurseries, helping to facilitate and develop parent-led childcare, and supporting residents to get qualifications and work in the childcare sector. 

However, the work was often ad-hoc and siloed rather than being joined-up and strategically focused on affordable childcare provision as a placemaking priority. The report recommends:

  • Join up activities. There needs to be a joined-up approach between community Investment, commercial portfolio management and development functions to ensure childcare is an essential element of these programmes.
  • Adopt a co-design approach. Instead of adopting a top-down approach to childcare, engagement needs to be undertaken with residents to understand their challenges and work with them to develop improvements.
  • Develop social value leases with childcare provision that can demonstrate its impact on society and the environment. Rent reductions can be negotiated with socially beneficial providers and should consider practical issues such as set up costs.  6 out of 10 nurseries in Peabody properties are on a sub-market rent.
  • Reach out to the experts and support the affordable childcare sector. Housing associations can do more to connect with expert groups to seek positive change, developing and supporting calls for accessible and affordable high-quality childcare for all.

Stephen Burns, Peabody's Executive Director for Care & Communities, said:
"By working better together the housing sector can help make a real difference to people’s lives through affordable childcare provision. If we’re serious about helping people succeed and prosper through employment and enterprise, then we have to do more to tackle the barriers that prevent people working. The challenges are huge, and the level of government funding is a problem, but by supporting the experts, co-designing services, hosting nurseries and putting childcare at the heart of our wide-ranging placemaking agendas, we can step up our impact."

Lucie Stephens, Researcher, Nursery Director and Childcare Campaigner, said:
"Every child’s first five years builds the foundations they need for future health, wealth and happiness. Childcare is a critical social infrastructure that should be available to every family. It needs to be at the heart of every community. But since January 2021 Ofsted reports over 2,500 childcare settings have closed. Childcare addresses educational inequalities for children, it enables parents, especially women to work increasing household incomes and benefiting the local economy. It's so important to see Housing Associations recognising the role that they can play in supporting children, families and childcare providers to thrive."

Commenting, Neil Leitch, Early Years Alliance Chief Executive said
"It is great to see housing associations considering how they can play a proactive role in developing a resident-centred and resident-led approach to early years. Creating affordable solutions that best meet the needs of a community is the best way to get young children the provision that is so beneficial to their development and wellbeing and which offers a wide range of support for parents. What we need in the long term is for government to urgently review funding for early years, to make it accessible to all parents and to pay early years professionals a fair wage. While we fight for that change, innovative solutions like these are a fantastic way to support harder-to-reach families to access early education and care, and to bring fresh faces into our brilliant early years workforce."

Case study

Friendly Families Nursery in Deptford, Lewisham
The Friendly Families Nursery is located in a purpose-built nursery building on Peabody's Vanguard estate in Deptford, Lewisham. The nursery has been co-designed by local parents through a year-long series of play sessions, workshops and co-design activities. The nursery has brought an empty building back into community use; two local people are employed full-time, five local people regularly volunteer, 25 local people have gained NVQ level 3 qualifications and 10 local families are currently accessing high quality, affordable childcare (this number will grow to 26 as the nursery expands).

All of these outcomes can be assigned a value using methods such as the HACT Social Value Calculator. In 2019 a survey of parents who had taken part in play sessions, workshops and co-design sessions at the nursery found that:

  • 69.6% agreed that they spend more time with people from a different background to them
  • 91.3% met new people and expanded their social circle
  • 95.7% feel more connected to their local areas

These outcomes support the wider mission of Peabody’s Community Foundation. Of the 10 nurseries we host, 6 pay sub-market rent. Other examples include involving childcare providers in wider place-based initiatives (Pembury Children’s Community in Hackney, which has worked with two estate-based local nurseries).

We are hosting an online event for the sector to discuss what more can be done to boost affordable childcare on 8th July at 13.30hrs. 

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