Economic assessment of the childcare sector in Wales report

Alma Economics were commissioned in October 2016 by Welsh Government  to deliver an economic assessment of the childcare sector in Wales.

Welsh Government

The report from this piece of work has been published today and  the full report  along with a summary is available here. A brief note of the background and findings from the report are included below. The project was undertaken with two main aims:

  • to quantify the economic impact of the sector in Wales recognising that it supports a large number of businesses and workers across Wales and enables parents into work; and
  • to provide detailed breakdowns of the costs and charges required for childcare providers to operate efficiently and sustainably, and are associated with complying with regulatory requirements.

Findings: The total number of childcare places in Wales increased from 76,000 in 2012 to 84,000 in 2017. Full day care places and after-school care places are most frequently offered and used. Childcare enables a large number of parents to work, and these parents go on to collectively generate an estimated £1.2 billion in income per year, supporting economic growth and poverty reduction across Wales. Additionally, around 61,000 parents of dependent children in Wales (approximately 20% of all parents) stated they are prevented from working due to caring for their children – with 9 out of 10 being women, according to the Family Resources Survey.

It is estimated that there are around 17,300 childcare workers in Wales with further expansion expected in coming years. On the make up of the settings providing care, the Alma Economics Childcare Survey found the majority of childcare workers are employed by small businesses or are self-employed (childminders). Around 80 percent of workers are employed on a part-time basis, working fewer than 35 hours per week. The Alma Economics Childcare Survey found that employees in the sector are relatively low-paid, with around half of all workers earning between £7- £8 per hour in 2016-2017.

Of those who completed the Alma Economics Childcare Survey, only 12% of staff earn over £9.00 per hour gross, which suggests that that plans to increase the National Living Wage (NLW) to £9.00 by 2020 are likely to have a major impact on the sector. Additionally from the Alma Economic Childcare Survey an estimated total amount spent on staff costs in 2015 – 2016 was approximately £190 million on operating costs, including staffing costs, with full day care providers accounting for around two thirds of the total spend. In 2016-2017, approximately a quarter of the providers surveyed expected to operate at a loss, which is consistent with data from the previous two financial years. Sessional day cares and full day care settings were more likely to report losses.

Caution should be exercised when interpreting the results from the Alma Economic Childcare survey, and figures should be considered as indicative only and not used to make comparisons over time. Next steps: To better understand the childcare sector and its impact, further research is recommended into the following areas:

  • the impact of the National Living Wage;
  • the cost of regulations and how it may affect the behaviour of childcare providers;
  • the number of people prevented from working due to lack of sufficient access to childcare in Wales; and
  • specialist staff training requirements to care for children with  additional learning needs.

We will be considering  the recommendations for further areas of research suggested by Alma as we develop our priorities for the next few years.  As part of our ongoing #TalkChildcare campaign we will also be speaking with providers to understand what impact changes, such as the introduction of the National Living Wage, are having on their businesses. Our childcare, play and early years workforce plan, launched in December, sets out our ambitions for the sector and we want to work with all our partners closely to ensure that we continue to develop the childcare offer in a way which supports parents, providers and children If you have any queries on the report please email the talk childcare mailbox at [email protected]

Cafodd Alma Economics eu comisiynu ym mis Hydref 2016 gan  Lywodraeth Cymru i gynnal asesiad economaidd o’r secotr gofal plant yng Nghymru. Cyhoeddwyd yr adroddiad o’r gwaith yma heddiw, ac mae’r adroddiad llawn ynghyd â chrynodeb ar gael yma. Mae nodyn cefndir byr a chanfyddiadau’r adroddiad  yn cael eu cynnwys isod: Roedd dau brif amcan i’r prosiect:

  • i fesur effaith economaidd y sector yng Nghymru gan gydnabod ei fod yn cefnogi nifer fawr o fusnesau a gweithwyr ar draws Cymru ac yn galluogi rhieni i weithio; a
  • i roi manylion y costau a’r taliadau sy’n angenrheidiol i ddarparwyr gofal plant er mwyn eu galluogi i weithredu yn effeithiol ac yn gynaladwy, yn ogystal â sicrhau eu bod yn cydymffurfio gyda gofynion rheoliaethol.

Canfyddiadau: Cynyddodd cyfanswm nifer y lleoedd gofal plant yng Nghymru o 76,000 yn 2012 i 84,000 yn 2017. Lleoedd gofal dydd llawn a lleoedd gofal ar ôl ysgol a gynigir ac a ddefnyddir amlaf. Mae Gofal Plant yn galluogi nifer fawr o rieni i weithio, ac mae'r rhieni hyn yn mynd ymlaen i gynhyrchu ar y cyd tua £1.2 biliwn mewn incwm y flwyddyn, gan gefnogi twf economaidd a lleihau tlodi ar draws Cymru. Nododd tua 61,000 o rieni plant dibynnol yng Nghymru (tua 20% o'r holl rieni) eu bod yn cael eu rhwystro rhag gweithio oherwydd gofalu am eu plant - gyda 9 o bob 10 o’r rhain yn ferched, yn ôl Arolwg Adnoddau Teuluol.

Amcangyfrifir bod tua 17,300 o weithwyr gofal plant yng Nghymru, a disgwylir ehangu pellach yn y blynyddoedd i ddod. Mae'r rhan fwyaf o weithwyr gofal plant yn cael eu cyflogi gan fusnesau bach, neu maent yn hunangyflogedig (gwarchodwyr plant). Cyflogir tua 80 y cant o weithwyr ar sail ran-amser, yn gweithio llai na 35 awr yr wythnos. Canfu Arolwg Gofal Plant Alma Economics bod gweithwyr yn y sector yn derbyn cyflog cymharol isel, gyda thua hanner yr holl weithwyr yn ennill rhwng £7- £8 yr awr yn 2016-2017.

Dim ond 12% o'r staff a oedd yn ennill mwy na £9.00 yr awr gros, sy'n awgrymu bod y cynlluniau i gynyddu Cyflog Byw Cenedlaethol (CBC) i £9.00 erbyn 2020 yn debygol o gael effaith fawr ar y sector. Yn 2015-2016, gwariwyd tua £190 miliwn ar gostau gweithredu (gan gynnwys costau staffio, cyfleustodau, rhent, glanhau, hyfforddi, arlwyo ac offer) gan y sector gofal plant yng Nghymru. Roedd darparwyr gofal dydd llawn yn cyfrif am oddeutu dwy ran o dair o’r cyfanswm gwariant. Yn 2016-2017, roedd tua chwarter y darparwyr a arolygwyd yn disgwyl gweithredu ar golled, sy'n gyson â data o'r ddwy flynedd ariannol flaenorol. Roedd lleoliadau gofal dydd sesiynol a lleoliadau gofal dydd llawn yn fwy tebygol o adrodd colledion.

Dylid cymryd gofal wrth ddehngli canfyddiadu Arolwg Gofal Plant Alma Economics 2017 - dangosol yn unig yw’r ffigyrau ac ni ddylid eu defnyddio i wneud cymariaethau dros amser. Camau Nesaf: Er mwyn deall y sector gofal plant a'i effaith yn well, argymhellir ymchwil pellach yn y meysydd canlynol:

  • effaith y Cyflog Byw Cenedlaethol;
  • cost rheoliadau a sut y gall effeithio ar ymddygiad darparwyr gofal plant;
  • y nifer o bobl sy’n cael eu rhwystro rhag gweithio oherwydd diffyg mynediad digonol at ofal plant yng Nghymru; a
  • gofynion hyfforddiant staff arbenigol i ofalu am blant gydag anghenion dysgu ychwanegol.

Byddwn yn ystyried argymhellion Alma ar gyfer cynnal ymchwil pellach ar rai agweddau fel y byddwn yn datblygu ein blaenoriaethau ar gyfer y blynyddoedd nesaf. Fel rhan o’n hymgyrch #TrafodGofalPlant byddwn hefyd yn siarad gyda darparwyr er mwyn deall sut mae newidiadau megis y Cyflog Byw Cenedlaethol, yn ei gael ar eu busnes. Mae ein cynllun gweithlu gofal plant, chwarae a blynyddoedd cynnar, gafodd ei lawnsio ym mis Rhagfyr, yn gosod allan ein uchelgais ar gyfer y sector ac rydym am weithio yn agos gyda’n partneriaid er mwyn parhau i ddatblygu’r cynnig gofal plant mewn modd sy’n cefnogi rhieni, darparwyr a phlant. Os oes ganddoch unrhyw ymholiadau am yr adroddiad, gallwch e bostio [email protected] 

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