Work Life Balance

Published in Bottomline in Autumn 2006 

Many people in Britain have difficulty balancing their work with other commitments and experience work-life conflict. This means that demands of work and non-work life roles are incompatible and the person can not participate in one role without being impeded from participating in another. For instance, Sally has a very hectic working week with many evening meetings on top of her normal working week. She has been working for her employer for three years and has recently returned from maternity leave. Sally experiences a lot of guilt that she is spending so much time away from her child and is finding it difficult to concentrate at work and is very tired. Sally is in danger of developing stress-related illnesses and health and safety issues at work have become a problem due to her tiredness, at home her baby is seeking a lot of attention at night. Sally has approached her employer about reducing her working hours and changing to a flexible work pattern.

The Government’s work-life balance campaign is intended to promote flexible working to all, emphasising improved productivity and better work place relations. Since 2003, employees have the right to request flexible working but employers can refuse the request on specific grounds relating to production and management of staff.

The Right of Parents to Request Flexible Working Arrangements (April 2003);

Parents with children under six or disabled children under 18 have the right to apply to work flexibly and employers have a statutory duty to consider these requests.

Eligibility criteria:
Continuous employment with employer for 26 weeks (this does not include agency workers or members of the armed forces)
Not to have made a request for flexible working in the previous 12 months

Flexible working patterns include:
Annualized hours, compressed hours, flexitime, job-sharing, shift working, unpaid leave during school holidays and staggered hours

Other policy objectives of the Government such as eliminating child poverty overlap with flexible working. Tax credits which aim to reduce child poverty also make it economically possible for many families to stay in work after having children. However without financial support and access to childcare, flexible working is not a viable option for many in-work families especially those with only one income. It is therefore of concern that the tax credit system primarily benefits medium to high income families and that the very poorest who most need the support to move into employment lose out.

National Childcare Strategy - Key Development

The Childcare Act 2006 – 11th July 2006

For all children under 5 high quality early learning and care and better access to early childhood services

For working parents a choice of a wide range of childcare where they can be confident that their children will thrive and be well cared for, enabling them to have greater choices about balancing work and family life

Local authorities will not be expected to provide childcare direct but will be expected to work with local private, voluntary and independent sector providers to meet local need.

The Government has shown a commitment to improving childcare with the Childcare Act (2006) which is the first Act of Parliament to deal solely with childcare. However, no mention of affordability is made in the Act; affordability is only addressed in that a commitment is made to ensure that childcare providers conform to the requirements of the childcare element of the working tax credit.

Childcare costs

The Daycare Trust, the national childcare charity which campaigns for accessible and affordable childcare, outlines the high cost of different types of childcare. Table 1 (page opens in a new window) shows the cost in 2005 of a full-time place for under 2s and over 2s firstly in a nursery and secondly with a childminder, and how this varies by region.

Nationally, the typical cost of a nursery place for a child under 2 is now £142 a week, or more than £7,384 a year whilst a childminder costs £132 for the same age group or £6,864 a year. The Daycare Trust calculated that this represents a 27% increase in childcare costs in five years which translates to 20% when adjusted for inflation. The table shows that the cost does vary by region, with a nursery place for a child under two costing £197 a week in inner London and the lowest cost of a nursery place for a under 2 year old in the West Midlands costing £121 a week or £6,292 a year.

• Omar and Jane have a combined income of £35,000 a year, are owner occupiers and are over 25 years old. They have one child under two and pay £130 per week in childcare. They would not be entitled to Working Tax Credit (WTC) but would qualify for £30.96 per week in Child Tax Credit (CTC). Without childcare costs they would receive £10.52 per week CTC so the childcare element is £20.44 payable weekly. Omar and Jane pay 18.5 % of their income including tax credits on childcare.
• George has an income of £22,000 a year and is an owner occupier over 25 years of age. He has one child over two and pays £136 per week in childcare. He would be entitled to WTC of £65.98 a week and CTC of £44.49 a week. Without childcare costs he would receive £10.52 CTC so the childcare element is £99.95 payable weekly. George pays 25.5% of his income including tax credits on childcare.
• Lucy is over 25 years old and is an owner-occupier. She has two children, one under two years and one over two. Her childcare fees would be £238 per week. She earns £13,085 a year. She would receive £228.81 WTC and £78.46 CTC. Without childcare costs she would receive £38.41 WTC and £78.46 CTC so the childcare element is £190.40. She pays 42.6% of her income including tax credits on childcare.
• Cecile is over 25 and pays £400.00 per month in rent. She earns £10,046 a year and pays childcare costs for her three year old of £136 per week. Her WTC would be £168.83, CTC would be £44.49 and her housing benefit would be £26.32 a week. Without childcare costs she would receive £60.03 WTC, £44.49 CTC and £8.36 housing benefit. The childcare element of her combined benefits and tax credits is therefore £126.76. She pays 31.4% of her income including tax credits on childcare.

From the examples above it is clear that low income households pay a far higher proportion of their household income on childcare because they still have to pay at least 20% of childcare costs. Cecile pays around a third of her income on childcare before housing and food. Lucy has nearly a third of her rent paid by housing benefit but still pays nearly a quarter of her income on childcare before the rest of her rent is paid and food is paid for. Furthermore, childcare vouchers which are available through employers mainly benefit medium to high income families.

Solutions

In addition to the National Childcare Strategy the government cites the money spent on tax credits to help parents for childcare. However, there are a number of problems with relying on this:

• Although from 6 April 2006, the childcare element of Working Tax Credit increased from 70% to 80% of qualifying childcare costs parents on the lowest earnings still have to find 20% of their childcare.
• Employer-provided benefits, such as childcare vouchers, benefit medium to high income families by allowing them to pay for childcare through their wages and avoid the higher tax rate.
• The current average award is only £53.30 a week, which is less than a third of the typical cost of a nursery place.
• Only 300,000 families get help with childcare costs through the childcare tax credit.

Impact on working lives

Due to the high costs of childcare, many families use informal childcare and it has also long been reported that couples with children develop a system of 'shift-parenting' to care for their children, with parents fitting their working hours around one another in order to look after their children.

Whereas the flexible working law theoretically enables families to combine work and family life, good quality, accessible and affordable childcare needs to be available to all children who need it if work-life balance is to be attainable.

The limitation with the Government's strategy for childcare is that it is focussed on families in employment rather than providing universal childcare which will enable families to make affordable decisions about training and further education as well as enabling them to enjoy time as a family.

Childcare campaigners have rightly urged the Government not to remain at arms-length but instead to invest in publicly funded, high quality and affordable childcare available to all families which would make flexible working a real option for all families in the UK.