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Flaws found in Scottish Government’s flagship child care plans

A report has found that the child care plans would cost £500m more than the Governments estimate.
A report has found that the child care plans would cost £500m more than the Governments estimate.

The Scottish Government has admitted it has no costed timescale for how its flagship child care policy would work.

Proposals outlined in the white paper on independence suggest that raising free nursery provision from 600 to 1,140 hours a year would deliver a 6% rise in women in work, raising £700 million more in taxes.

However, a report by the Scottish Parliament’s Information Centre (SPICe) said the plans would cost around £1.2 billion £500 million more than the Government’s estimate.

It added that 104,000 women would be needed to make the numbers work but there are currently only 64,000 mothers in Scotland who fit that category.

That means even if Dundee United, Dundee and St Johnstone’s football grounds were all filled to capacity with new mums, it would still be fewer than the number required to make the sums add up, according to SPICe’s figures.

The report said: “Scottish Government analysis suggests that, over the long term, increasing the labour market participation rate of women by six percentage points could increase economic output by £2.2 billion and increase tax revenues by £700 million.

“The Scottish Government analysis does not consider whether the proposed changes in childcare policy would lead to such a change, rather it seeks to estimate what might happen if such a change in female participation took place.

“The increased output and tax revenues suggested by this analysis rely on up to 104,000 women moving from economic inactivity into activity. At present, there are only 64,000 mothers of one to five-year-olds who are economically inactive.”

It also pointed to a UK survey, which found “that around 30% of parents of pre-school children would be very likely or likely to start work or increase their hours if the Government covered the extra costs of childcare”.

Although the white paper talks of 35,000 new jobs being created by the policy, a Scottish Government spokesman referenced Sweden’s model multiple times during a briefing with journalists, which projects an extra 104,000 positions.

He said: “We believe that by delivering this policy, alongside others, we will be able to achieve a significant increase in labour market participation.”

When asked how long it would take to achieve Swedish levels, the spokesman said: “The Government hasn’t modelled that. We have a policy and we think we can point to strong evidence that it will increase labour market participation by women.

“We modelled the impact, based upon international examples.”