Childcare: potential insights for the UK from Denmark

3 July 2012

Reform roundtable seminar on childcare on Thursday 28 June 2012. Introduced by Christine Antorini, Danish Minister for Children and Education.

Last week Reform held a discussion with Christine Antorini, the Danish Minister for Children and Education, to discuss potential lessons for the UK from the Danish childcare system.

Both the UK and Danish governments spend a lot on childcare. The OECD has measured public expenditure on childcare and pre-primary education at 1.1 per cent of GDP in the UK and 1.3 per cent of GDP in Denmark. The OECD average is 0.6 per cent of GDP. In the UK, private spending is high too, with UK families on average paying 27 per cent of their net income for childcare. In a recent survey by Mumsnet and the Daycare Trust, 37 per cent of respondents said they spent as much, or more, on childcare as on the costs of servicing their mortgage or paying their rent. In Denmark, families spend on average 9 per cent of their net income on childcare.

Although the UK system is the more costly of the two, it is argued that the outcomes are not as good. For example, the UK ranks 16 out of OECD countries when it comes to maternal employment, with 67.1 percent of mothers in work compared to 84 per cent in Denmark. Quality of provision is seen to be better in Denmark, with highly qualified staff working in childcare. More than 60 per cent of workers in Danish daycare centres have a degree in pedagogical education. Danish daycare provision also has a 90 per cent satisfaction rate among parents.

It is important to note the factors that make comparison between the two countries difficult. Denmark has a very different welfare state from the UK and tax burdens are relatively high. There is also strong business support for childcare to enable female participation in the labour market. Despite the fact that both countries have deficits, the UK’s public finances give less room for manoeuvre, especially as George Osborne announced recently that the Government intends to find a further £10 billion of savings in the welfare budget.

So what insights from the Danish system are useful for the UK?

The service provision approach to childcare rather than the use of cash transfers through tax credits in the UK. The Huffington Post’s report on the lunch quoted Liam Byrne, Shadow Secretary of State for Work and Pensions, who said: “The hypothesis is the Danes are squeezing more daycare out of the same money than we are – because they have a different mixture of services rather than cash injections. And that’s what we want to explore.

The localist element. Each municipality has the responsibility to deliver a daycare place for every child. Municipalities are fined if they fail to meet this commitment.

The variety of providers in and across the municipalities. Parents are able to request a place at a specific daycare centre and can choose between public, independent or private daycare (private sector provision has been allowed since 2004, is growing, and now makes up 5 per cent of the market).

The cost structure. An individual family contributes a maximum of 25 per cent of the costs of a daycare place, with the municipality paying a minimum of 75 per cent. Importantly, the money follows the child.

The regulatory structure. Since 2004 all daycare facilities have been obliged to prepare a written pedagogical curriculum, but there is no tradition of sending out central inspectors to the municipalities. This contrasts with the use of Ofsted inspections in the UK.

The choice element. Parents are able to change daycare providers and can also select a daycare centre in another municipality. This freedom to move is seen to prevent costs from being driven up.

What was clear from the discussion is the more integrated approach to childcare in Denmark. It is viewed as a key part of the whole education system. Furthermore, there is clarity and simplicity over departmental responsibility. Compare this to the UK, where support for childcare comes from different funding streams in different departments.

It is unlikely that any one model from abroad will provide the answer for the reform of childcare in the UK, but international examples offer a starting point. Real reform not increased spending is needed. Without improving value for money and performance, costs may just be driven up further without benefiting families.

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