There was a lot to unpick in Jeremy Hunt’s Spring Budget today ( 15 March 2023), not least new measures that could have a significant impact on gender equality in the workplace.

One of the key measures is the expansion of free childcare for working parents in England to cover one and two-year-olds.

Working parents

Currently, working parents with three and four-year-olds are eligible for 30 hours of free childcare per week. However, the rising cost of childcare has been a major barrier for some parents, particularly mothers, to return to work or work full-time. With the extension of free childcare to cover younger children, the Government hopes to encourage more parents to enter or re-enter the workforce.

This move has been welcomed by the business group the CBI, which believes that it could raise up to £10bn in further revenue by increasing the number of parents able to work. However, the Early Years Alliance, which represents around 14,000 childcare providers in England, has expressed concerns about the safety and quality of care if staff-to-child ratios are relaxed to accommodate the expansion.

Gender pay gap

The gender pay gap in the UK remains a significant issue, with women earning, on average, 15.5% less than men. While there are many factors contributing to this gap, including occupational segregation and unconscious bias, the cost of childcare is a major barrier for women in the workforce.

By expanding free childcare, the Government is taking a positive step towards reducing this barrier and promoting greater gender equality in the workplace. It is hoped that this will enable more women to enter or re-enter the workforce and progress in their careers, ultimately leading to a more diverse and inclusive workforce.

However, it is important to note that the devil is in the detail, and the Government must ensure that funding meets the sharply rising costs of delivering places. In addition, further measures may be needed to address other factors contributing to the gender pay gap, such as the lack of flexible working options and the under-representation of women in senior positions.

Better gender equality in the workplace

The expansion of free childcare in the UK budget is a positive step towards promoting gender equality in the workplace. It is now up to the Government to ensure that this measure is implemented effectively and that further steps are taken to address the many other barriers facing women in work.

DiversityQ spoke with several business leaders focused on delivering gender equality in the workplace. This is what they had to say.

Hannah Copeland, HR Business Partner at employment law and HR consultancy firm, WorkNest, said: “Free childcare hours for young children is a massive positive for working parents and will bring about so much more flexibility and working options for mothers and fathers who are keen to work and raise a family in tandem.

“With parents having the financial support to return to work sooner, this inevitably means more women in the workplace and less pressure on women, especially in senior roles, who don’t want to have gaps in their careers.

“This can only positively contribute to the retention of skills and the extension of a really positive work-life balance for parents of even younger children. This shows that the Government supports a hybrid lifestyle, which goes even further towards allowing working parents to avoid making the difficult choice between their careers or their family.”

Returning parents

There is an increasing trend towards offering returning parents “return to work bonuses” after maternity or shared parental leave to encourage early return and contribute towards childcare. 

Copeland added: “This Government initiative really does take the pressure off businesses that are currently footing the financial bill themselves. It shows a real commitment to enabling career continuation and progression, especially for women.”

Abi Adamson, founder and DE&I Director of The Diversity Partnership, said: “Finally, the Government has woken up to the dire impact the childcare crisis is having on working families in the UK.

“There’s no doubt this is a significant financial commitment that will prevent many working parents – particularly working mums who still carry the burden of childcare – from needing to sacrifice their careers. However, the Government must ensure they do not cause more problems than they’re trying to solve by bolstering supply to meet the new demand.

“The UK workforce is haemorrhaging women as sky-high childcare costs are forcing many to choose between a career and parenting. The UK’s childcare has only exacerbated the deeply embedded inequalities that exist in our workplaces and our societies. No doubt, the sacrifice many working mums have needed to make because of this broken system will have a catastrophic consequence on equality.”

It’s no secret that the childcare system in the UK is pricing many families out of work, particularly working mothers who are still bearing the weight of childcare, says Ali Hanan, founder and CEO of Creative Equals.

She added: “We’re pleased to see the Government is taking this issue seriously and hope this is a turning point. Ensuring working parents can continue to manage their careers is vital to the collective mission to build more diverse, equitable and inclusive workplaces. What’s crucial now is to ensure supply increases to meet the new demand, so this commitment does not fall flat.”

Striving for growth

One of the aims of the Government in this budget is for growth, with the removal of barriers to working being one element of that. “The increase in free childcare provision will assist with this, along with the changes to those on Universal Credit, where childcare costs will now be paid upfront, rather than parents having to reclaim,” says Angela Carter, Legal Director of England and Wales at WorkNest.

“It will provide working parents with more flexibility and, hopefully, enable those parents who have to this point been unable to work because of prohibitive childcare costs to work, which in turn will assist employers to overcome recruitment challenges that are affecting many sectors.”

Sheila Flavell, CBE, COO of FDM Group, comments: “Rising childcare costs place a huge strain on working parents, forcing many women to choose between pausing their careers or paying out every penny of their net income to nannies and nursery fees. These proposals will empower women to continue and develop their careers alongside juggling family
commitments, reducing the gender pay gap and driving economic growth.”