The political debate over childcare in the UK has increased in intensity and in urgency in recent years. This is hardly surprising given the central role that childcare provision plays both in improving life chances for children themselves and in enabling workplace participation for parents.

The provision of childcare has increased dramatically over the last two decades. As late as 1990, there were just 59,000 nursery places in England and Wales, compared with over 1.8 million places today. But the time is now ripe for innovation that could address problems such as high prices for parents, very low profit margins for providers, gaps in provision and a lack of flexibility in delivery.

Today’s report launched by Nesta in partnership with the Family and Childcare Trust details a number of innovations, both from the UK and globally, that show potential to address the key issue of flexibility, accessibility and affordability of high quality childcare.

Affordability

Affordability of childcare is a key issue for parents and with around 77 per cent of childcare provision being associated with staff costs, there is significant potential for co-produced childcare with volunteers and parents playing an active part in the provision of childcare. Our report highlights the childcare system in Canada, which has a large parent co-produced nursery sector, with most of these settings run as co-operatives. In Ontario alone there are over 50 parent nursery co-operatives. This strong sector has grown over nearly 50 years and has been catalysed by leadership from federal government.

The report also explores opportunities for childcare providers to collaborate in order to share premises, facilities and back-office staff to reduce these costs. Our report suggests that greater business collaboration could result in a cost reduction of £50 per child. This will make little difference to nursery prices charged to parents, but could have a significant impact on margins for providers.

Accessibility

It is clear that the uneven distribution of provision represents a major barrier to accessing childcare in certain parts of the country. These gaps in provision are almost always most acute in deprived areas. In deprived areas parents are less able to pay for childcare, or purchase extra hours on top of their allocation of free early education. Existing providers, in turn, may find it harder to break even or expand provision and new providers may be deterred from entering the market. It is difficult to see how the free market alone will respond to this need – it certainly hasn’t as yet.

The non-profit London Early Years Foundation offers a great example of countering this problem in London by developing a business model where fees from provision in wealthier areas and better-off parents cross-subsidise costs for other settings/parents. However, it stands alone somewhat – and it’s worth noting that many of the large national chains have little or no presence in the less prosperous parts of the UK. New forms of financing for addressing this problem are much needed, bringing in new social investors and perhaps looking more deliberately at the outcomes of increased provision of quality, affordable childcare – particularly for low-income or disadvantaged families.

Flexibility

Flexibility is key to childcare provision, with school holidays and parents with a working life that extends beyond 9-5 being particular pinch points. Both employment outside normal office hours and irregular patterns of work can make the arrangement for formal childcare very difficult. Thirty five per cent of parents share childcare between them while they work or rely on grandparents or other forms of informal care. Our report makes the evidence clear that the most successful innovations targeted at improving the flexibility of care - particularly for families with atypical work patterns or in need of occasional emergency childcare - will need to be focused on improving access to informal care. That might be through the use of new services - that do not yet exist in the UK - to enable reciprocal informal care and possibly through the use of time-credits to incentivise promotion of informal childcare.

The list of innovations in this report are not exhaustive, neither do we propose that any one solution will solve such a large problem. However, it is entirely clear that current models of provision do not meet the need for childcare, particularly in poorer areas of the country. Taking successful, well evidenced alternative models of childcare provision and supporting them to grow where they are most needed, would seem a logical next step.