Providing childcare for all one to four year olds could be worth
around £40 billion to society, according to a new economic
Moving towards universal childcare could bring immediate
significant benefits in terms of higher female employment and
earnings, said the report by economists from
In the longer run, there would be additional benefits in terms
of increasing the lifetime earnings of mothers who would not need
to take prolonged career breaks, as well as possible benefits to
the future productivity of children from less advantaged
backgrounds, who would receive good quality pre-school childcare
under the scheme.
The report, published as a policy paper by national childcare
charity Daycare Trust, is the first study to quantify the potential
economic costs and benefits of universal pre-school childcare over
the full working lifetime of both the parents and the children
affected by the policy.
Stephen Burke, Director of Daycare Trust, said: “We can create a
lasting legacy of children’s centres in every community, providing
childcare and early years services that every family can use.
“This report provides a childcare challenge for the Government –
clearly in the long term the benefits of investing in quality
childcare for children, parents and the whole country will pay huge
Over the first 20 years, during which it is assumed that
universal childcare would be phased in, the study estimates that
the overall economic benefits to society would broadly match the
overall costs of provision.
However, the long-term net benefits could accumulate to around
£40 billion over a 65-year period although these estimates are
subject to significant uncertainties, particularly in relation to
the increase in female employment resulting from the move to
universal childcare provision.
David Armstrong, senior economist in PricewaterhouseCoopers
Belfast office and co-author of the report, said: “It may be that
the benefits of investing in childcare and pre-school learning
could be greater than investment in education at later ages, given
that a very significant part of cognitive and non-cognitive skills
development occurs before children start school.
‘Universal pre-school childcare provision: towards a
cost-benefit analysis for the UK’ (Facing the Future Policy Paper
No.7) is available price £10 (incl p&p) from Daycare
Trust, 21 St George’s Road, London SE1 6ES; tel: 020 7840 3350.