Providing affordable childcare 'could save the taxpayer £1.5 billion a year'

Affordable childcare 'could save £1.5 billion a year'. Credit: Dominic Lipinski/PA Wire

The taxpayer could save £1.5 billion a year if affordable childcare was rolled out to allowed more mothers to go back to work, a report has claimed.

Some three-quarters of women with a youngest child aged three or four want to work, but with only 15-hours a week of free childcare available, many of them are unable to, found the report for the left-of-centre think tank the Institute for Public Policy Research (IPPR).

Speaking on Daybreak Dalia Ben-Galim, associate director at the IPPR said that even with the current provision, "lots of mums in lots of data and research tell us that they still can't find work."

The report cited reforms in the Canadian province of Quebec, where the introduction in 1997 of universal childcare at the cut-price rate of five dollars (around £2.80) a day was credited with driving an eight percentage point increase in maternal employment.

The IPPR calculated that increasing the employment of mothers of pre-school children by 10% could generate £1.45 billion for the Treasury - £500 million from extra tax revenues and £950 million in lower spending on tax credits and benefits. A rise of five percentage points would generate £750 million and just one percentage point £200 million, the report found.

A similar level of "cashback" for the Treasury could be generated from mothers currently working part-time taking advantage of affordable childcare to switch to full-time work, said the report.

The think tank argues that a key Government priority should be universal flexible and affordable childcare, made available through community institutions such as children's centres, rather than through cash benefits or tax free vouchers.