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Could new HMRC childcare tax changes help teacher retention?

This week, the government has opened up their new Tax Free Childcare Choices (CFT) for working parents. By offering a monthly 20% tax refund (up to £2,000 tax relief per child per year), your childcare bill of up to £10,000 a year (that’s about £833 split monthly) is now tax-free for eligible workers.

The old childcare voucher scheme is still available but still limited to £243 monthly.

The move is helpful for many industries but few more so than education which employs a whopping 80% adult women and has a severe attrition problem. The new CFT would effectively reduce nursery fees by a fifth which could help to put mum-returner teachers back in schools.

For example, for parents working in the South, a typical full-time nursery place costs £900 – £1,200 a month per child, payable even in the holidays.  A typical teacher in their fifth year of work with, say, a subject leadership TLR is earning £33,070 so returning to teaching is currently a costly proposition. After tax and the incredibly high pension contributions that teachers pay, the take-home pay is around £1,800. Subtract the cost of a car (to haul that marking home now you have to get back before 6pm) and petrol and you’re left with around £300 pay monthly. A tight sum for a 60+ hour week.  Applying the new tax refund will at least give back £166 per month (assuming £2,000 split over 12 months).

I deliberately refer to ‘teacher’ here, not women, because it is just as reasonable to consider that a teacher/non-teacher couple may consider the father leaving his career.

If you’re lucky, you can access a childminder for slightly cheaper at around £800 a month with a term-time-only clause.

Let’s be clear about the issue here – we are desperately short of teachers in the UK. Contrary to the government’s obsession with training up new ones or recruiting from abroad, our problem is retention. Around 10% of teachers leave the profession every single year: some are retiring but nearly 8% are simply resigning. Former schools minister Nick Gibb stated that 7,200 of the 24,100 newly qualified teachers in 2010 had left teaching by 2015. That’s nearly a third. What position we would be in now if they had not?

If you have two children under 3-years-old, the £2,000 monthly bill renders most teachers completely unable to work unless they have significant free options. It’s just another reason teachers can’t return after maternity. If a woman has two consecutive children, she could be out of teaching for six years. So a rather glaring question must be asked – why is teacher childcare not heavily subsidised… or free?

Given the nature of schools’ community links, often physical proximity to local nurseries and the likes of sure start centres, is it really so farfetched a notion to arrange a sensible discount for childcare? Surely this could cost less than training up tens of thousands of new teachers every year. The government could seriously slash their attrition rate by addressing this childcare subsidy need.

Each year, roughly 6,000 women aged between 30 and 39 leave teaching. Very few caring for families return – yet our staffing strategy does not account for that loss.

There is some hope for teachers whose youngest child is soon to turn three: from September 2017, the government is extending care hours for three-year-olds from 15 hours per week in term time to 30 for working parents, which might open up teaching again for mum-returners.

Better flexible working options for mum returners

We are poorly equipped to offer part-time versions of teaching. Many schools now shy away from job shares for various reasons, not least the additional cost of funding a few hours crossover time and the additional effort of dealing with the effect of the inconsistency in the classroom. Yet in corporate industry, these factors are simply considered a realistic business need, to be budgeted for and planned for if highly trained talent is going to be attracted and retained. The truth is, schools budgets are so stripped back, there’s nothing left to give.

If schools want to stop haemorrhaging their expensively-trained assets, they all need to ask what needs to be present for them to stay. From childcare to mental health support, any change made will return its investment tenfold.

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To check your eligibility for the new Tax-Free Childcare or the Additional funded hours, allow plenty of time to work through www.childcarechoices.gov.uk.

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