David Morrow is a Policy Analyst, Chartered Accountant, and Dad from Belfast. He previously worked in policy at Stormont, and is writing in a personal capacity.
The NI Executive has the money to fund affordable childcare. It spends it elsewhere
NI has an affordable childcare crisis – bills for parents are close to £1,000 per month on average, over half of parents go into savings or debt to pay for childcare, and many parents (usually mothers) feel obliged to cut their hours or drop out of employment altogether to look after their kids.
In February 2024 MLAs unanimously declared the delivery of affordable childcare an urgent priority. NI has for years been the only part of the UK without a dedicated affordable childcare scheme.
The Education Minister, whose department would have responsibility for delivering such a scheme, estimated the cost of a fully funded scheme at up to £400m annually. In Stormont terms, that’s a lot of money. The question is where should that money come.
Show Me the Money
To answer this question, it’s important to understand how the NI Executive is funded. It gets a pot of money from the UK Government in Westminster, which it can spend how it chooses. It can top up that pot with locally collected rates bills, but the vast majority of the available money is from Westminster. How it should work is that if NI’s population is approximately 3% of England’s, then for every £100 spent by the UK Government in England, the NI Executive gets £3 to spend in NI.
Usually the NI Executive takes it money and spends it in NI on much the same things as the UK government spends on in England. Most of them are services we take for granted – health, education, policing etc, also known as core public services.
There are a few additional services that the NI Executive chooses to spend its money on that are not provided or paid for in England. They are listed below alongside their costs in the year 2021 (they’ll have gone up a bit since then). We’ll call them “additional services” for now.
Source: The Fiscal Council
On the other hand, there is one major service that England spends on but that NI doesn’t. You guessed it, affordable childcare.
It’s plain to see that if the NI Executive wanted to find £400m to fund affordable childcare, it could at the very least get most of the way there by not spending on some of the listed additional services. The introduction of water charges alone would free up most of the funding required for affordable childcare (in addition to the other benefits of a properly funded water and sewerage system, but that’s another matter).
MLAs have thus far been loath to cut the funding of any of the additional services listed above – to do so could be politically costly if voters that currently benefit from the provision of those services turned against politicians that cut them. However, if politicians aren’t willing to make tough political choices to fund affordable childcare, how can they credibly claim to be urgently prioritising it?
Isn’t There Another Way?
Politicians will of course search for a politically pain-free way to find the £400m for affordable childcare that doesn’t involve cuts to any other services. The nicest solution would be if the UK Government gave the NI Executive more money. One of the only other areas in which MLAs all agree is that the current pot of money NI receives from the UK Government is insufficient to properly fund public services in NI. If our politicians can get the UK Government to agree with this and thus to increase the pot received in NI from the UK Government, that additional money could be spent on an affordable childcare scheme.
If it sounds too good to be true it’s because it probably is. Even if Westminster increases the size of the pot for NI, it’s unlikely to be sufficient to simultaneously properly fund core public services, fund all the existing additional services that aren’t available in England, and fund new services in NI like affordable childcare too. The political jargon for increasing NI’s pot from the UK Government to meet its needs is the “Fiscal Floor”. In this instance, politicians are seeking to use it more as a Fiscal Shield, to protect themselves from the prospect of having to make tough choices on spending priorities.
Parents should also beware of other supposed politically-pain-free solutions for funding affordable childcare. It would be nice if affordable childcare could be funded from savings made by delivering existing public service more efficiently e.g. by transforming the health service, or by de-segregating our society and thus making savings in areas such as policing and education. Such savings, if ever achieved (and very little if any progress has been made in the history of the NI Executive), aren’t going to fund £400m for affordable childcare any time soon.
Money Where Your Mouth Is
They say that money talks. It is fair to judge what the NI Executive is actually prioritising by where it is spending its money rather than based on what is said in Stormont. Based on the NI Executive’s current spending decisions, the likes of free transport for 60-65 year olds and no water charges are of greater priority than affordable childcare.
Struggling parents and the campaigners that have worked hard to push the lack of affordable childcare to the top of the political agenda can wait indefinitely for more money to become available for a scheme. But why should they? Instead, they should press politicians that claim to be prioritising affordable childcare for detailed and specific proposals of how they would fund that £400m in the near future.
Passing motions in the NI Assembly and producing strategy papers is cheap – if our local politicians are genuinely to prioritise affordable childcare and come to the assistance of struggling parents, they’re going to have to work out how to fund the £400m. That’s likely to involve spending less in other areas.
That’s what prioritising is – by definition you cannot prioritise everything.
This is a guest slot to give a platform for new writers either as a one off, or a prelude to becoming part of the regular Slugger team.
Discover more from Slugger O’Toole
Subscribe to get the latest posts sent to your email.
