Wales politics

Childcare pledge by Welsh Labour 'could cost £200m'

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Media captionParents at Little Inspirations nursery in Llantrisant pay £40 a day for childcare

Welsh Labour's promise to increase free childcare could cost considerably more than it has predicted, the author of a report on the matter has said.

In an election pledge, Labour said giving working parents 30 hours free childcare a week for 48 weeks of the year would cost an extra £84m annually.

Economist Gillian Paull told BBC Wales the "upper limit" could reach £200m if "nearly all" parents took up the offer.

The Welsh Government said it was currently analysing the likely costs.

The promise to provide 30 hours free childcare a week was one of Labour's key election pledges and is now part of its five-year programme for government.

The childcare will be made available to working parents of three- and four-year-olds for 48 weeks of the year.

In a report for the Welsh Government in February, Ms Paull, of Frontier Economics, produced various cost estimates for the policy.

It said the cost would be £84m a year if the childcare was offered to working parents and if 87% of them took up the offer at a cost of £5 per hour.

However, Ms Paull warned that she thought the policy was unlikely to encourage many non-working parents to take up jobs.

Image caption Gillian Paull warns that if more parents take up the offer of free childcare, the more it will cost

The Welsh Government insists the policy will remove one of the "major barriers to employment".

Ms Paull said if the policy proved to be successful in enabling large numbers of parents take up jobs, its annual cost would increase considerably.

"The cost estimate [in the report] is based on a very small response in working behaviour," she told the Sunday Politics Wales programme.

"If there is a bigger response, the cost could be considerably higher.

"A reasonable upper limit would be around £200m, based on an extreme response of nearly all parents becoming eligible by working."

David Dallimore, a social policy researcher at Bangor University, warned that money would also have to be spent expanding the availability of childcare in Wales, which he claimed was already "patchy".

"It's very dependent on where you live," he said.

"Wales has a measurably lower rate of childcare than other nations in the UK.

"In Wales it's about 30 childcare places for every 100 children - it's about 40 in England and it's nearly 50 in Scotland."

He added: "I think there's a lot of concern within the sector that there isn't enough provision to be able to deliver this [policy] in the current form we have."

Image caption Carl Sargeant has called for a fresh approach to tackling poverty after Communities First

Indicating the end of the Communities First anti-poverty programme on Tuesday, Communities Secretary Carl Sargeant cited the childcare policy as a way of helping parents find work.

"Across government we are ensuring prosperity for all," he said.

"The creation of a generous childcare offer for working parents will help to remove one of the major barriers to employment."

A Welsh Government spokeswoman said: "We know there are issues with capacity and cost in some parts of Wales and we are working with the childcare sector to address this.

"We are also currently undertaking complex modelling of costs.

"We have a cost range, and the purpose of our modelling and analysis is to look at key factors such as the number of eligible children, take-up rates, number of hours utilised and hourly cost, all of which impact on the overall cost estimates."

Sunday Politics Wales is on BBC One Wales on Sunday 16 October at 1100 BST

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