Supporting parents and carers

Susan Himmelweit and Hilary Land

The Open University and University of Bristol

					       
 Equal Opportunities Commission 2007

First published Summer 2007

ISBN 978 1 84206 046 9 

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CONTENTS
TABLES AND FIGURES	ii
EXECUTIVE SUMMARY	iii

1	INTRODUCTION	1

2	THE WIDER CONTEXT	7
	2.1	The European context	7
	2.2	The British context	11

3	PARENTS AND CARERS	20
3.1	Unpaid carers	20
3.2	Employment and unpaid care	23
3.3	Time for parents and carers	25
3.4	Services	32
3.5	Cash	35
3.6	The paid childcare and social care workforce	38
3.7	Recruitment and retention	39
3.8	Training	41

4	CARE IN THE MARKETPLACE: KEY ISSUES	44
4.1	Productivity and the costs of care provision	44
4.2	Effects on standards of care provision across different sectors	44
4.3	Consumer choice and the market	46
4.4	Direct payments	50
4.5	The demand for subsidised care	52

5	POLICY IMPLICATIONS	57
5.1	Introduction	57
5.2	Labour market conditions for combining care with employment	58
5.3	The provision of care	59
5.4	The childcare and social care workforces	59
5.5	Public responsibility for care	60
5.6	Funding	61

REFERENCES	64

TABLES

1	Number of hours spent caring per week	21
2	Percentage of women and men in part-time and full-time
	employment who were also carers in 1965, 1980 and 2000	24
3 	Percentage of adults of working age spending at least 20 hours 
	per week caring by gender and employment status	24
4	Turnover among full daycare providers	46
5	Weekly cost of nursery place for a child under 2 in England compared
	with average earnings and NMW levels for years 2001-2006	55

FIGURES

1	Public expenditure on childcare and early education services, 
	per cent of GDP, 2003	6
2	UK gender pay gap for full and part-time employees	9
3 	Employment rate of women aged 50-59 and public support for
 	social care for those over 65	10
4	The gender pay gap in EU25, Romania, Bulgaria and Norway, 2002	28

EXECUTIVE SUMMARY

This study was commissioned by the Equal Opportunities Commission (EOC) as part of an ongoing debate to explore the idea that support and services for parents and carers should be part of a coherent whole, coordinated across government. Currently support is fragmented and there is no overall strategy to inform the development of services. The aims of this study were to: identify the underlying philosophy supporting national strategies for parents and carers; explore models from both the UK and Europe; and consider how a strategy to support parents and carers that also worked to reduce gender inequalities might look in the UK.

Interest in policies concerning the care of children, people with disabilities and older people is growing in most Western industrialised societies. This is of particular importance to women and to those wishing to reduce gender inequalities because, despite the growing involvement of men, women are still the majority of informal carers. Women are also the majority of those employed in each of the different parts of the formal care sector. 

Care provided by family and friends ('informal care') still far outweighs that provided by formal services. A key policy objective for governments therefore, is to sustain and support informal care, as well as to develop formal services. The reasons for the greater visibility of care and carers in the policy agenda include demographic trends resulting in population ageing, family and household changes, women’s increased labour market participation and the growing acceptance that the care of children is a public good in which society as a whole has an interest and responsibility. 

Background
The European context
Countries across Europe are having to consider how best to support caring. UK policy on care exists in a European framework and over the past thirty years there have been a number of EU Directives concerning equal treatment in social security, equal pay, the reconciliation of work and family life, the rights of part-time workers (disproportionately women) and working time. All have had an influence on the development of policy and practice on care, despite successive UK government’s resistance to their rigorous implementation. In addition there is an EU-wide commitment to raise economic activity rates, including for mothers and older men and women.

Variations between countries in the cost of care to the public purse cannot be explained simply by the demographic and social structure of a particular country; rather, they reflect political choices about where and how to draw the line between public and private responsibilities as well as the strength of a sense of solidarity between the generations. Thus the methods chosen to achieve these objectives differ according to family traditions, the balance between informal and formal care services and the role of the private for profit sector. Social care services throughout the EU are in general being reformed to give those needing care more choice of care providers and flexibility with respect to how and where care is provided. Direct Payment schemes have been introduced and in many EU countries they are used mainly to sustain informal care by paying carers, including co-resident relatives. There is growing concern that these payments may discourage carers of working age from staying in or returning to paid employment. In contrast, in the UK such payments are associated with the privatisation of services and the development of a market for care, and the choice to pay relatives for care is restricted. 

The British context
In Britain, childcare and social care services were marginal to the post-war welfare state. Care remained the responsibility of women as wives, mothers and daughters who were assumed to provide 'free' care to the family. Formal childcare and adult social care services were residual services only, provided by local authorities on the basis of an income test and the need for care where the family had failed. This treatment of care services contrasts with health and education which have been developed as comprehensive services available to all and free at the point of delivery.

Direct state support for informal carers is still perceived, at best, as unnecessary and a ‘deadweight’ cost and, at worst, undermining the willingness to care. Furthermore, HM Treasury's 'Golden Rule' forbids borrowing for human capital investment, using a distinction between current and capital spending which allocates contributions to care, health and education services to the current account. This means such expenditure is seen as a ‘cost’ which should be constrained, in contrast to expenditure on physical infrastructure which is seen as investment. This leads to an under-investment in human capital, including in caring services.

In the UK, the desire to contain public expenditure, as well as the aim of developing a market, favours tax credits for childcare rather than direct investment in publicly provided services. As a result of government policies, in less than twenty years, the private for profit sector has replaced local authorities as the main providers of nursery care, residential care and home care. Direct payments for older people and adults needing care are expected to sustain and expand these markets still further. Local authorities have become commissioners of care services subject to nationally determined priorities, targets and penalties.

The UK spends, as a percentage of GDP, just under the average of all OECD countries on childcare and social care but considerably less than many European countries with comparable per capita incomes. In the UK, the justification for public spending on care is more in terms of other policy objectives, such as increasing lone mothers’ economic activity rates, reducing child poverty and improving the life chances of children living in the most deprived areas, rather than directly improving the provision of care. Direct public provision of childcare services is targeted on poorer families and is not accepted as the right of all children, in contrast to pre-school education which is expanding. Only parents in paid employment are eligible for the childcare tax credit (CCTC). A key objective of social care policy is to reduce expenditure on expensive residential or health services and in England, home care services are targeted on low income households with the most dependent adults and those without informal carers. 

The extent of caring in Britain
There is growing evidence that families and friends are caring more than in the past and that the volume of unpaid care far exceeds that provided in the formal sector.

•	The Household Satellite Account estimated the monetary value of childcare and adult care in 2000 to be £231 billion, or a third of total household production and equal to more than one quarter of GDP in that year. This dwarfs the annual value of formal childcare (£5.2 billion in 2005) and adult social care services (£10 billion in 2005).
•	In 2000 the number of informal carers (5.8 million) had changed little since 1985. However a higher proportion (27 per cent) than in 1985 (22 per cent) were providing at least 20 hours of care per week. Nearly a fifth of those providing more intensive care were friends (GHS, 1986 and 2001).
•	The decline in intensive filial care resulting from the reduction in co-residence of elderly parents with adult children is counterbalanced by the increase in spousal care arising from the narrowing of the age and longevity gap between husbands and wives, as well as the increase in longevity overall.
•	Economic activity rates among women in their fifties have increased steadily over the past 30 years. Nevertheless, one in four is a carer. A third of working mothers in 2005 relied at least in part on grandparents’ (mainly grandmothers’) childcare. 

These figures do not reveal the complexity of relationships between families, markets and state policies. Too often the importance of family relationships and exchanges beyond the household and between three and even four generations are ignored, underestimated or taken for granted. Formal and informal care are not interchangeable in a simple way and most families do not wish to cease caring altogether. The recent Scottish experience of offering ‘free’ personal care suggests that when formal services are made available, carers may choose to care differently, but not less overall. 

Policy implications
A caring strategy for the twenty-first century cannot be gender blind. Rather it requires the development of policies which will reduce and remove existing gender discrimination. This involves:

•	valuing care and those who give it, whether paid or unpaid, more highly;
•	removing the economic disadvantages suffered by those to whom current gender norms allocate greater caring responsibilities;
•	challenging those gender norms to share caring responsibilities more equally between men and women;
•	movement towards a society based on a model of worker/carer citizens, in which nearly all adult members of society are expected to contribute to both caring and paid employment; 
•	mainstreaming ‘care’ in public policies, including transport and planning, so that the autonomy of children and adults needing care is increased and  those with caring responsibilities are able to lead fulfilling and well-balanced lives.

A strategy would need to address issues across a number of key policy areas. These are summarised below.

Labour market conditions
Facilitating caring fatherhood and enabling men to be carers will require reform of the labour market. In particular, workers need to be able to work hours that are compatible with sharing caring responsibilities. Men need to be encouraged to take the same amount of leave as women. Making employment hours more compatible with caring responsibilities requires challenging the UK’s ‘long hours’ culture. 

Improved rights to statutory leave and flexible working would help women progress in the labour market. Extending discrimination legislation to cover discrimination against those who have taken time out on statutory leave or made requests for flexible working would help entrench these rights, and should both encourage men to take on caring responsibilities and ensure that neither sex suffers disadvantages as a result of so doing. This needs to take place in the context of stronger  rights for a-typical workers.

The provision of care
The quality of care is based on a relationship which requires time to establish and sustain. In general, therefore, 'value for money' in care cannot be achieved by increasing productivity, that is by reducing labour time, because this inevitably compromises quality. There is therefore less scope for market forces to improve quality in care than for other commodities. Indeed competition is likely to result in declining labour and care standards in the private care industry, while public sector provision will appear inefficient. Policies which support the development of a private sector in care through subsidies and the application of competition law, are unlikely to lead to sustainable high quality care. 

The childcare and social care workforces
Both the childcare and social care workforces are currently badly paid and poorly qualified. The government is investing more in training, but mainly in the childcare sector. Private sector providers are reluctant to invest in training where turnover rates are high and where qualified staff then tend to seek the better employment conditions of the public sector. While pay is low and there is little career progression in either the domiciliary or residential care sector, care workers cannot be expected to invest in their own training. To improve standards, public funds are needed for training in the longer term. 

Migrants are likely to be an increasingly significant minority in the paid care workforces. Policies should not discriminate against them in relation to access to benefits, freedom to change employers and support in acquiring further qualifications. Otherwise the increasing reliance on migrant workers may not only be exploitative of them, but also become an alternative to developing an appropriately rewarded, well-qualified and skilled childcare and social care workforce.

Without improvements in the childcare and social care workforces, the care sector will remain a female ghetto characterised by poor conditions both for the carers and those for whom they care. The government has begun to regulate the employment of childcare workers in private homes and as Direct Payments are used more extensively, similar regulation of the working conditions of personal care assistants will also be needed. Experience from elsewhere in the EU shows this can successfully be done in ways that safeguard and improve the conditions of carers while also enhancing the autonomy of those for whom they care.

Public responsibility for care 
When care is accepted as a public good of benefit to society in its own right, then policy has a role in addressing the current problems facing carers and in promoting good care. If the customers of care have to pay the full cost of that care, then care will in general be underprovided or of lower quality than is socially desirable. Government then becomes an essential partner in providing the necessary resources to ensure that everyone who needs care is well provided for, as it does in the provision of primary and secondary education and medical care. This is one reason why in most European countries, care is at least part-funded by the state.

This approach is different from that in Britain, which more often uses public policy on care as a means to achieving something else, such as higher employment rates for mothers or lower health costs. Current policies often overlook or take for granted the care that older people provide to each other or for their grandchildren, because it is not seen as a cost to society. But such care is not free, it is paid for by the carer (and other members of the family). It is unwise to rely on such care expanding sufficiently to fulfil rising care needs, especially since it may become less available as retirement ages are set to rise. Sustainable policies based on a sense of social solidarity are needed which appreciate and assist the flow of care between generations, within families and within wider society.

Funding
The government has begun to spend more on childcare services but has yet to find the resources needed for services for the growing number of disabled and frail elderly people. As a public good, it is neither efficient nor fair for individuals to be expected to fund their own or their children’s care in full. Public expenditure on care will have to rise just to maintain current standards, let alone to address staff shortages and raise standards of care. The policy question is how in the future, funding for and the provision of care is to be shared between the state, employers and individuals and their families.

Many other countries include universal entitlement to some care provision covered by their welfare state. Some are insurance based and others are tax based. There are a number of different options for raising taxation that could be fairer than the present system which impacts harshly on those needing long-term care. However, these would require changes to the Treasury's rules on public expenditure so that investment on caring services is recognised as a form of investment in human capital.

It is just as unrealistic for the government to expect families to do more and more, as it is for families to assume more care can be provided without cost. A new pact between families and the state is needed which recognises the partnership between paid and unpaid care, enabling individuals to take on a caring role and sustaining them in that role. In moving towards a society where most adults are expected to contribute both to caring and paid employment, and to improve the lives of those needing care, a good range of accessible and affordable high quality care services should be available to all who need them. 

1		INTRODUCTION

The Equal Opportunities Commission (EOC) commissioned this study to explore the idea that support and services for parents and carers should be part of a coherent whole, coordinated across government. Currently, support is fragmented and there is no overall strategy to inform the development of services. The aims of this study were to identify the underlying philosophy supporting national strategies for parents and carers, explore models from both the UK and Europe, and consider how a strategy to support parents and carers that worked to reduce gender inequalities might look in the UK.

By the end of the twentieth century, governments in most western industrialised countries were taking a growing interest in policies concerning the care of children and of older or disabled adults. In 1999 the Organisation for Economic Co-operation and Development (OECD) published a report called: A caring world: the new social policy agenda. Its authors concluded that social programmes would have to be developed further in order to respond to changing family structures as well as in recognition of:

…the key importance of the family unit in nurturing, caring and supporting members of society. Social programmes play a valuable role to assist the family in carrying out its many purposes as well as intervening, as appropriate, when family structures dissolve or act in destructive ways. Women play a special role as formal and informal caregivers predominantly in family settings, as well as being recipients of care, and social policy needs to respond to their specific situation.
(p.145, emphasis added)

Support is needed in the form of services as well as in cash. Whereas services to provide care for children or frail elderly people without families were well established from the beginning of the last century if not earlier in most, if not all, OECD countries, the broadening of the focus of policies to encompass old and young members of ‘normal’ families is a more recent development. This growing interest among developed welfare states in the care of both the younger and the older generations is of particular importance to women and to those wishing to reduce gender inequalities.

There are a number of reasons for this growing interest. First, there are significant demographic trends. Declines in fertility rates, steadily increasing life expectancy not only at birth but also at more advanced ages, have resulted in population ageing. This means the population of working age (defined as aged 15 to 64 years) is falling as a proportion of the total. As this is accounted for not by larger numbers of children but of older people, this has consequences for health and social care services as well as for the viability of current pension systems. Some describe these trends as a ‘demographic time bomb’. Mortality at advanced ages has been reduced in most OECD countries, but this has increased the proportion in the population at risk of a frail health status. Modern medicine now often prevents illness or accident from being fatal, but does not necessarily reduce its incidence and consequent chronic incapacity. The data currently available do not give a clear picture of future trends but Wanless reported that increases in healthy life expectancy over the past twenty years have not kept pace with improvements in life expectancy. In other words “disability-free life expectancy as a proportion of total life expectancy has decreased” (Wanless, 2006 p.37). This means that, excluding the effects of migration, the proportion of the population needing care on grounds of disability can be expected to rise, even if the birth rate were to remain constant.

Second, there have been significant changes in family and household formation. The proportion of children in lone parent families has risen and in northern and western European countries they are much less likely to be living in a three generation household than was the case forty years ago. There has been an increase in single person households, and while this is still mainly accounted for by growing numbers of elderly people living alone, in some countries there has also been a significant increase in adults of working age, particularly men in cities, living alone. This is partly explained by later ages of marriage and increased rates of marital or partnership breakdown, leaving men living on their own because of the greater likelihood that children will continue living with their mothers. In future this may affect adult children’s willingness to look after their elderly fathers. On the other hand, the high marriage rates experienced in most of Europe in the 1950s and 1960s, combined with increasing longevity, means that currently older people are more likely to be living with a spouse than in previous generations. As the mortality differential between men and women narrows it is likely that in future there will be more couples surviving to advanced old age. Already, elderly men are more involved in care-giving than their fathers were and, on the basis of a recent study of twelve OECD countries, it is anticipated that “the role of spouses and other senior care givers may increase…” (Lundsgaard, 2005, p.30).

Third, women, especially mothers, have been joining or returning to the labour market in growing numbers. The extent to which this has been facilitated by improved access to childcare services, more flexible working arrangements to help mothers reconcile work with family responsibilities and improved maternity and parental benefits, varies between countries. However, by the end of the twentieth century there was a far greater commitment to developing formal childcare provision (see OECD, 2006). In some countries such as the USA and UK, a key purpose of such provision is to increase mothers’ labour market participation in order to reduce welfare dependency and child poverty in the context of falling real wages among unskilled and lower skilled men and more fragile marriages and partnerships. In others, such as France or Norway, childcare services have been seen as an investment in the wellbeing and development of all children as young citizens in their own right as much as a means to other ends. 

As more mothers have been drawn into paid work, albeit part-time in countries such as the Netherlands, UK and Germany, male breadwinner models, which to varying degrees informed social policies in many post-war European welfare states (Lewis, 1992; Sainsbury, 1996), are being replaced by variations of an individual citizen-worker model. Women as well as men have an obligation to be ‘active’ citizens and this means taking paid work. At the same time, in order to fund sustainable pension systems in the future, retirement ages are being raised to at least 67 years for women as well as men in many countries. 

However, policies and services to facilitate older women and men in combining employment with their caring responsibilities have received far less attention than childcare issues. This lack of attention to the carers of adults may be because they are generally older carers, less visible and less likely to be seen as having a future in the labour market. It may also be because the ‘social investment’ model that applies to childcare, that it is in itself an investment in the future prosperity of society, does not apply in the same way to the care of elderly people or to adults with the most severe disabilities. The case for social care services and support for those who no longer will or never could participate in the labour market has to be made on the basis of the social rights of citizenship and as an expression of social solidarity between the generations. This is used as a justification for collective support in many EU countries but ‘social solidarity’ is not a term found in current British policy documents. It is interesting to note that the OECD report (1999) on the future of social policy entitled in the English version A caring world is called Une monde solidaire in French (Ellingsæter and Leira, 2006).

Fourth, by the end of the last century informal care had become visible. It had been more thoroughly researched than ever before due to interest in this quintessentially 'women's work', initially inspired by the re-emergence of feminism in the late 1960s and early 1970s. Much more is now known about the care provided by family and friends. Time-use studies conducted across the EU, North America and Australia together with the development of household satellite accounts, provide a means of calculating a monetary value for informal care. It is now clear that policy makers have to consider informal care: 

The sheer size of informal care provision within families and local communities make it essential for all countries to consider how support for informal care can best be targeted and if alternatives such as non-financial support give more value for money for the persons receiving and giving care.
(Lundsgaard, 2005, p.39) 

Even in a country such as Sweden with extensive formal adult care services, it has been estimated that the volume of unpaid informal care is twice as large as the volume of formal care (idem).

Fifth, as policy makers have begun to listen more carefully to the voices of older people and people with disabilities, it has become clear that the vast majority want to be supported in their own homes. At the same time, concern to restrain health-care as well as social care budgets has made considering the use of alternatives to hospital and residential care more urgent. Providing more flexibility in terms of how and where to receive care has therefore become an important policy objective, on the assumption that the less expensive options will often be the most preferred. Arrangements to increase ‘choice’ and ‘flexibility’ in long term care services often involve supporting informal carers. 

The role of informal care is therefore important in its own right and is increasingly recognised by policy makers in OECD countries. Also, in a very direct way, the option to have a relative or friend as carer (and vice versa to provide care for a relative or friend) can be seen as a central element of choice and flexibility in long term care-provided that both parties consent.
(ibid., p.4)

Sixth, in the light of these demographic, social and political trends, pressures on childcare and social care budgets are growing. Increased budgets look unavoidable, including in those countries with comparatively generous provision. These increases are significant. It has been estimated that even countries currently spending between 2.5-3 per cent of GDP on social care provision, this percentage will have to double by 2050 just to maintain current service standards (ibid., p.39). In many OECD countries, including the UK, where the proportion of GDP spent on social care is closer to 1 per cent, there is widespread dissatisfaction with current standards. Better quality care cannot be achieved and sustained with current staffing levels and training standards. For example, research by the OECD Health Project found that staff shortages and staff qualifications were "the number one concern of long-term care policy makers in OECD countries" (OECD, 2005, p.13). An emerging related issue concerns how far and on what terms, reliance on a migrant workforce to provide childcare and social care services, both within the home and in the formal sector, could and should increase. This in turn raises questions about the ways in which this growing international labour market care is spread across regions and nations and who bears the cost of such a system (Ehrenreich and Hochschild, 2003).

Figure 1 shows how public expenditure on childcare and early education services varies as a percentage of GDP across OECD countries, where the UK spends just under the average of all OECD countries. This is considerably less, particularly on childcare, than spending by most European countries of comparable level of per capita income, though somewhat more than spending by other English speaking countries. Similar variations are found with respect to expenditure on social care for adults, with the UK again close to the average for the countries studied. A study based on 19 OECD countries in 2000 found public expenditure on home care and residential care as a percentage of GDP averaged 0.99 per cent across 14 of the 19 countries in the study with Sweden at 2.74 per cent, Norway 1.85 per cent, Austria and the Netherlands 1.31 per cent. The UK’s level was 0.89 per cent, slightly less than Canada and Germany (OECD, 2005, p.26 Figure 1.1).

The large variations in the cost of care to the public purse do not reflect demographic or social structures in a simple way. These variations also reflect political choices about where and how to draw the line between public and private responsibility. The demise of the male breadwinner model means women have joined men in increasing numbers to share in the responsibility of maintaining themselves and their children financially. However there is less agreement about whether policy strategies are also needed to alter the division between men and women of the responsibility for the care of younger and older generations, as well as for each other.

Figure 1	Public expenditure on childcare and early education services, per cent of GDP, 2003

Source: OECD Family Database (2007), Chart PF10.1.  Available at: http://www.oecd.org/dataoecd/45/27/37864512.pdf

2		THE WIDER CONTEXT
2.1		The European context
UK policy exists in a European framework, which needs to be considered as part of the background to current developments in policies on care. The UK has signed up to a number of EU Directives and policy objectives. Earlier EU Directives concerning equal treatment in social security, equal pay, the reconciliation of work and family life, and working time have all had an influence on the development of policy and practice on care in the UK. The New Labour government signed up to the Maastricht treaty’s social chapter, unlike the previous Conservative administration, but has tended to implement these aspects of the European Social Model in a lukewarm fashion, attempting wherever possible to lessen their regulatory impact. Despite the most recent extensions of paid maternity leave and the introduction of additional paid paternity leave in the Families and Work Act 2006, which are discussed in more detail below (p.29), the scheme as a whole still lacks flexibility. The level of replacement pay, although higher than before, is still low and therefore unlikely to be taken up in full by many parents and particularly not by fathers. The implementation of additional paternity leave has been delayed, and any parental leave taken after the maternity period remains unpaid and therefore has a particularly low-take up rate by fathers.

Similarly for European regulations on part-time and in ‘non-standard’ employment where women form the majority of workers across the EU25. In 2005, over a third of women were employed part-time compared with 7 per cent of men (Commission of the European Communities, 2006, p.7). In the UK, where 40 per cent of employed women work part-time, the government has implemented the Part Time Workers’ Directive in such a way that the vast majority (five million of the approximately six million part-time employees), who do not have a direct full-time comparator, are excluded from most of its provisions. The 2004 Directive to give temporary agency workers the same rights as ‘regular’ workers in a ‘user enterprise’ has remained controversial not only in the UK, but across the EU. In December 2006 the Commission published a Green Paper to stimulate a debate about how to combine more flexible forms of work with minimum social rights for all workers. (Commission of the European Communities, 2006) This debate has both strong gender and intergenerational dimensions:

…since women, older and also younger workers engaged on non-standard contracts have fewer chances to improve their position in the labour market.
(ibid., p.8)

Also significant from the point of view of this report, the UK government has negotiated and insisted on retaining an individual opt-out from the EU Working Time Directive (WTD). The opt-out renders the WTD ineffective in protecting the employment choices and work-life balance of partners of those with caring responsibilities who ‘choose’ to work long hours, and means that the ‘long hours’ culture in many workplaces in the UK continues unchallenged. However, as inequalities grow in the workplace, those who do not conform to the norm of commitment to long full-time hours pay heavily (Manning and Petrongolo, 2005). The gender gap for part-time workers in the UK has remained large and remarkably resistant to change and, as Figure 2 shows, is the highest in the EU. 

EU countries have accepted a policy objective to raise economic activity rates among men and women of working-age. The purpose is to increase economic growth rates and, along with raising pension ages, help remedy the increasing costs of pensions brought about by the ‘demographic time bomb’ described above. The European Employment Strategy (EES) agreed by the European Council meeting in Lisbon in 2000, has target employment rates of 70 per cent in 2010 for the population of working age of all member countries. Groups currently less likely to be in the labour force have specific targets. The 2010 target for women is 60 per cent and for older workers aged 55 years and over is 50 per cent (European Commission, 2005). It is not chance that these specifically targeted groups are those that are most likely to have caring responsibilities. The EES, if it is successful, will therefore have a marked effect on care, since many of those currently devoting time to care in the unpaid domestic sector will have less time to do so. In order to meet these targets, alternative forms of care will have to be found in other sectors, as will jobs that are flexible enough to be compatible with the ways in which carers and parents, choose to fulfil their caring responsibilities.

At the Barcelona European Council meeting in 2002, member states were urged to provide childcare services for at least 90 per cent of children between the ages of three and mandatory school age and for at least 33 per cent of all children by the end of 2010. There have yet to be any agreed targets for social care services despite the evidence that the countries with high economic activity rates among older women also have the most extensive domiciliary and residential care services for elderly people (OECD, 2005). As Figure 3 shows, the three countries that have the highest proportion of older women in employment all have a considerably higher proportion of people aged over 65 in publicly funded social care than in the UK.

Figure 2		UK gender pay gap for full and part-time employees 
Source: NES pay data up to 1996, then ASHE data 1997-2005, used in Grimshaw (2007).

Figure 3		Employment rate of women aged 50-59 and public support for 	social care for those over 65

Source: OECD (2005).

Another important development is that European Competition law is extending its coverage to include services. In early 2006 the European parliament decided to exempt public services including health, social care and environmental services from the proposed new open market in services. National governments who espouse the European Social Model can resist the erosion of public service provision by competition law by arguing that such provision is in the ‘general interest’ and is an expression of ‘social solidarity’. Public providers of health and social services are therefore not ‘undertakings’ in the meaning of competition law. On the whole, the European Courts have been sympathetic to this approach. However, the bigger the role of the private sector in delivering health or social care services, the harder it is to sustain this argument. Further, the General Agreement on Trade in Services (GATS), part of the World Trade Organisation's package of legally binding rules on global trade, could in the future force the opening up of social care service provision to foreign companies. Even under existing law, some aspects of public sector health service provision have already been challenged. The UK 1998 Competition Act has been used successfully to challenge direct public provision of residential care in North Belfast (Land, 2004).
The final factor affecting the terms of the debates about care in the EU is that across the EU, social care policies are being reformed in order to allow those needing care more choice among care providers and flexibility with respect to how and where care is provided. The methods chosen to achieve these objectives differ according to family traditions, the balance between informal and formal care services and public policy priorities. In some countries, policies that promote choice in care provision have been advocated by Conservative parties keen to support traditional family structures. For them 'choice' is enhanced by giving parents and individuals needing care the option of direct financial support from the state for parents or other family members to do the caring instead of making use of publicly provided services (Ellingsæter and Leira, 2006). In these and many EU countries direct payments to care receivers are used mainly to pay informal carers, including co-resident relatives (Lundsgaard, 2005). However, a recent study of social care provision in 12 OECD countries concluded that “improving flexibility of care through choice does not necessarily imply privatisation of funding” (ibid., p.12). There are other ways in which choice can be promoted, for example in Scotland, where personal care is provided free by the state, carers can make a choice about how much and in what manner they care. 

The question of how far payments made to informal carers act as a disincentive to carers of working age to taking up paid employment is already an issue in many EU countries although it is only just surfacing in the UK (Wanless 2006). This is leading to the development of strategies for carers of working age to enable them to combine paid work with care, for example by providing more services as well as rights to leave. In contrast older, retired carers, who are most likely to be looking after a spouse, are deemed to need respite rather than continuous access to care services (Lundsgaard, 2005; Wanless, 2006).

2.2	The British context
(a) Divisions between care, education and health
Throughout the twentieth century in the UK, as in some other European countries, there was a split between childcare and education services as well as between health and adult social care services. In the post-war welfare state, education and health services were universal services provided free at the point of use. In contrast, childcare and adult social care services were residual services provided by local authorities on the basis of an income test as well as on an assessment of the need for care. Thus not everyone needing care was eligible. Until the late 1980s, the social security system picked up the cost of residential and domiciliary care for elderly people with low incomes and in receipt of means tested benefits. Local authorities did not have a duty to provide day nurseries for children and some chose not to do so. The Childcare Act 2006 for the first time placed a duty on local authorities to improve the well-being of all children aged five and under. Most childcare and social care for elderly people was allocated to those without families to care for them, or at least without ‘normal’ families (Hunt, 1970; Land and Parker, 1977). The long historical association of these public services with poverty or family failure can still make their use shameful - a feeling reported by some in areas with a Sure Start Programme (WBG, 2005) - and therefore something to be avoided. It is interesting to note that the use of free and universal nursery education is higher than for formal childcare. This is particularly noticeable among Asian families (Daycare Trust, 2006).

The marginal relationship of childcare and social care services to the core of the British welfare state is in part explained by the centrality of the male breadwinner-female housewife model to the British tax, social security and wage systems for most of the twentieth century. Fundamental to this model was a very clear division of responsibilities: men had a duty to take paid employment in order to maintain their wife and children and women had a responsibility to care for their husbands, children and other dependent relatives. In the labour market men used this model to justify their need for a higher ‘family’ wage while married women were seen as housewives first and workers second. The state, by giving all married men an additional tax allowance and dependants’ benefits in the social security system, indirectly supported married carers. This crude and inefficient system was costly. In the mid 1980s the cost of the married man’s allowance (MMA) in foregone revenue was over £4 billion. This was comparable to the total cost of social security benefits for children at that time.

This history has left a number of unfortunate legacies. First, the state is still reluctant directly to support unpaid carers in the home, in other words, to share the care of adults and children with their families. This is based partly on a wish to avoid the ‘deadweight’ cost to the state of financing those who it is believed would, or indeed should, care anyway without direct support. It is also based on a fear that care provided by the state would substitute for, rather than augment, such unpaid care. Evidence from Scotland where free personal care was introduced in 2002, shows this fear to be unfounded (Bell and Bowes, 2006).

Second, the consequences of abandoning the male breadwinner model following the introduction of independent taxation in 1990 and the demise of the ‘family’ wage (even the level of a minimum wage is now based on a single person whereas Beveridge argued for a minimum based on a couple plus one child) have not been fully recognised. The MMA was only gradually phased out and ten years later (except for men aged 65 in 1990 who kept the allowance) was replaced by the Children’s Tax Credit which has now been incorporated into the current Child Tax Credit. In effect this re-distributed the state subsidy from all married men, who might (or might not) be supporting carers of either adults or children, to mid- to low-income parents alone. Those caring for adults, however, are not compensated within the tax credit system. The growing pressure on both members of childless older couples, who are in increasing numbers providing essential childcare for their grandchildren (as discussed below, p.20) as well as care for elderly or disabled adults, and the partners of those with a chronic illness or disability to return to paid employment comes not only from government employment policies, but also from these changed tax and minimum wage levels which are no longer based on the male breadwinner model.

Third, because tax allowances have not traditionally been seen as part of the welfare state and have not counted as part of public expenditure in the public accounts, it is easy for politicians to believe that in the past families provided ‘free’ care and childcare, so that social care services were indeed marginal to the welfare state. This view towards childcare provision is changing as it is increasingly acknowledged as being central to other key policy objectives. The closer it moves to education, the more it is seen as a public good. This change in perception has yet to happen with social care. As the 2006 White Paper on health and social care stated, social care, in contrast to health care; 

…is something that we generally provide for ourselves and each other and therefore it is only when family and friends cannot cope that public resources get to those who need the most help and who cannot afford to pay for that extra support themselves. 
(DH, 2006, para. 4.4)

More recent official statements emphasising the need to be "clear about the responsibilities of the state, the individual and the family", suggest a conviction that the division of these responsibilities of families need to be re-emphasised rather than lightened. 

This longstanding view that the care of children and adults needing care is primarily a private matter and not the responsibility of the state, may also help to explain another unusual feature of the care debate in the UK: the lack of any discussion of the birth rate or of whether policies to help mothers reconcile work and family life should be seen as ways of encouraging a higher birth rate. Unlike in many other European and other developed capitalist countries, pro-natalism has rarely been an issue in Britain. Indeed, over the past twenty five years child benefits and the tax credit system have developed in favour of small and young families. Partly this may be to do with a less dramatic fall in the birth rate, which has been below replacement level in the UK for some time, but is about average for the EU15 (Eurostat, 2007, Table 1). But it may also be due to a stricter separation between public and private, and a view that governments do not have a right to develop polices to influence how many children people have, even if policies designed for other purposes will in practice do so. Whether this view continues to hold if the government’s other policies make no impact on the 'pension crisis' remains to be seen. If not, it is possible that some other effects of this stricter separation between public and private, for example the unwillingness to support relatives in caring roles, may diminish too.

Childcare policies in the UK have two main objectives. The first is to increase mothers’, particularly lone mothers’, economic activity rates. The second is to improve the life chances of the poorest children by investing in their early education and care, thus breaking the cycle of poverty and inequality that begins in early childhood. ‘Social inclusion’ is the goal but the context in which this is discussed is more narrowly defined than in many other countries. There is less emphasis on the desirability of reducing the social exclusion of immigrant children and their families, for example (OECD, 2006).

Public spending on childcare is targeted in two ways. The Sure Start programme of integrated Children’s Centres is currently concentrated on children living in the 10 per cent most deprived areas. The 2007 Budget confirmed that Children’s Centres are set to be rolled out to other areas starting with those in the 30 per cent most deprived areas, so that by 2010 there will be 3,500 Children’s Centres, three times as many as in 2006 (HM Treasury, 2007). Consistent with its belief that the private-for profit and voluntary sectors offer more choice and value for money than the public sector, the government has used the tax credit system (discussed in detail below pp.52-53) to subsidise the use of the formal childcare services by lower paid working parents. Parents pay 71 per cent of the cost of childcare overall, which is double the contribution made by parents in many other EU countries (OECD, 2006). 

Similarly, within adult care, the provision of domiciliary care services is targeted on low income households (defined as having an income less than 125 per cent of pension credit) and is justified by an economic motive, that of keeping adults needing care out of expensive hospital beds, rather than as an entitlement by those adults to the care that best meets their needs. In England these services are increasingly ‘targeted‘ on the most dependent adults and those without carers. As a result, although the total number of contact hours increased substantially as the average per household rose from 3 to over 10 hours between 1990 and 2005, the numbers of households receiving such care fell in the same period by a quarter to 395,000 (Commission for the Social Care Inspectorate (CSCI), 2007 p.20). There is a complex system of charging which varies between local authorities (LAs) and, unlike the WTC, assets (over £20,500 in 2006) are taken into account in setting the level of the fee charged. Wanless estimated that 40 per cent of the cost of social care comes directly out of people’s own pockets (Wanless, 2006, p.114). 

The historical split between childcare and education services as well as between health and social care means there are long standing and substantial differences in pay and career structures between these services. These have to be overcome if the care and education of young children are to be fully integrated. Education and health have the more developed training and careers structures, with the training requirements for childcare workers remaining much lower than in many European countries. The expansion of the right to half time free nursery education to all four year olds and more recently to all three year olds is significant, but such educational provision will not necessarily be located in the same place as childcare services, so education and care staff will not always work alongside each other. The development of Early Years degree programmes and the requirement that every day nursery has a qualified Early Years teacher are important steps. However, because of pay differences and an unwillingness to increase budgets, when this requirement is met the ratio of children to staff can be increased from 8 to 13 for three and four year olds.
(b) Control over local authority policies
Another British feature with relevance to policy on care is the government’s practice of implementing policy through setting measurable targets. Policy on childcare is designed to contribute to the government’s own target to end child poverty by 2020, an ambitious aim beyond the more narrowly economic targets to which policy on care is usually subject. This target is to be achieved in part by increasing the employment rate of mothers and in particular by supporting lone mothers in moving from dependence on means-tested benefits into paid employment. The Childcare Act 2006 requires local authorities to ensure there are sufficient childcare places for working parents. Local authorities must also meet targets for social care, but these depend on health service policies over which they have little direct control. In order to reduce ‘bed-blocking’, local authorities are fined if they do not provide the necessary social care services to enable elderly patients from being discharged. As the budgets for Primary Care Trusts have become tighter, it is tempting to redraw the boundary between health and social care so that more responsibility rests on local authorities. This is not a good way of encouraging integrated services and co-operative working, especially as local authorities also have over-stretched budgets (as will be discussed below, p.34) and money for social care is not ring-fenced.
Compared with many other EU countries, the UK has a highly centralised government structure and much reduced scope for local government to raise revenue. A tendency to control local government budgets and activities ever more tightly has taken the form of shifting the role of local government from being direct providers to commissioners of services, considerably reducing LAs’ autonomy to that of finding best value for money under heavily specified central government rules that include substantial use of the private sector. 

One justification for that control of local authorities is to give 'consumers' of services more of a voice. New Labour governments have been keen to consult on a wide variety of its proposals. However in doing so it may end up listening to the louder ‘users’ voices, and those who have better advocates or more access to the media. This is a serious problem for older, frailer care recipients who are among those who have least voice unless they have friends and family to speak up for them.

On one hand establishing national targets, which LA’s must meet, could be a way of reducing the ‘post-code lottery’ which results from substantial variations in local provision and charging policies for childcare, domiciliary and residential care (Wanless, 2006, Chapter 6). But to do this effectively would require supply-side rather than demand-side initiatives (Daycare Trust, 2006, p.25). Childcare tax credits and direct payments may not give parents and those needing care sufficient purchasing power to ensure the market delivers the services they need when and where they need them (Bryson et al., 2006; CSCI, 2007; Wanless, 2006).

This tendency to impose new accountability requirements on LAs applies also to the professions and trade unions. These changes taken together leave less scope for local democracy, professional autonomy and collective negotiations of working conditions. The creation of devolved administrations in Scotland and Wales has, to some extent, counteracted this centralising tendency, particularly in Scotland. In Scotland, and to a lesser extent in Wales, local authorities have retained more of their role as direct providers of caring services. 
(c) Taxation and expenditure
The government has two fiscal rules, against which it wants the sustainability of fiscal policy to be judged (HM Treasury, no date: 9). The first, known as the 'Golden Rule' is that on average over the economic cycle, the government will borrow only to invest and not to fund current spending. However, to apply this rule the government uses a distinction between current and capital spending, based on its interpretation of international accounting standards, that does not correspond well to the distinction between spending that benefits future or current citizens, the rationale for not allowing current spending to add to the national debt (Emmerson et al., 2006). Rather than seeing them as possible investment in human capital, all contributions to care, health and education services are allocated to the current account and therefore seen as 'costs', which should implicitly be saved whenever possible. This is unlike expenditure on physical infrastructure which is counted as 'investment' and thus forms part of the capital account. This results in a distortion of public spending: an underinvestment in human capital and an over investment in the physical capital. This has direct gender effects, improving men’s and worsening women’s employment prospects in a gender segregated labour market, and increasing women’s unpaid work load, because women are the ones more likely to provide substitute services unpaid to their families. 

This rule has significant effects. For example, cost-benefit analysis carried out by the accountants PricewaterhouseCoopers (2003) found that the provision of universal childcare in the UK on a Scandinavian model would bring a net benefit to the economy, due to both the increase in women’s employment (an increase that would be higher if women were able fully to utilise their skills as a consequence of wider employment options through more comprehensive childcare provision) and the increase in the productivity of children (estimated on the basis of their higher future earnings) arising from greater care provision. However, their proposals would lead to a net deficit in the government’s current account of about £2.7 billion, because the current interpretation of investment would mean that spending on childcare would have to come out of the current account. This means that to meet the deficit by borrowing, although it should be justifiable as an investment in human capital, would break the Golden Rule as currently applied, since it would be borrowing to fund current account spending. This restriction only compounds the problem that capital markets do not work efficiently in this respect for private finance of childcare either; there is no culture of borrowing to finance child care fees to be paid back from the increased lifetime earnings that result from a mother staying in employment or from a child benefiting from better care. Just like parents, the government can borrow money to finance bricks and mortar but not for investment in childcare.

Investment spending is constrained by another rule, the 'sustainable investment rule', that over the economic cycle, the ratio of net public sector debt to GDP will be set at a 'stable and prudent' level, currently defined as no more than 40 per cent. The government has produced no justification for this figure of a 40 per cent limit on net public sector debt, which works out as considerably lower that the 60 per cent of GDP allowed for gross public debt by the Stability and Growth pact of the Eurozone countries. This rule has no current effect on spending on care, since currently care is never counted as investment, but if the Golden Rule were reformed to include spending on human capital as investment, it would make sense to raise the level of the sustainable investment rule to take account of the portion of spending on care that would then count as investment, and therefore be subject to the sustainable investment rule.

The government has also been keen not to be seen as a high spender, especially not on the current account. That is one reason tax expenditures, such as tax credits that do not appear in conventional public expenditure accounts, are favoured over welfare benefits that are counted directly as public expenditure. The government is also keen to preside over a public sector reduced in size. This favours private over public provision of caring services, even where these are ultimately financed by the state, as well as transferring capital funds to the private sector to develop social infrastructure, announcing in the 2001 budget: 

We will support the expansion in childcare provision focusing on the most deprived areas where the childcare market faces barriers to development. This will be achieved by targeting new funds on helping childcare providers – in both the private and voluntary sectors to set up in these areas.
(HM Treasury, 2001, p.40)
(d) Privatisation
There have been successive waves in which private-for-profit provision has taken root: first in residential care for elderly people in the 1980s, followed by residential care for children and other adults, together with domiciliary care in the early 1990s and childcare, since the late 1990s. Now, private-for-profit provision dominates all three sectors. In 2006, it accounted for 80 per cent of the nursery market, which was worth £3.5 billion. The rest of the market was equally divided between the voluntary and public sectors (Nursery and Childcare Market News, 2007, March p.175). In the case of residential and domiciliary care, providers are also found mainly in the private sector, accounting for over 80 per cent of places in the former and nearly 70 per cent of contact hours in the latter. This has implications for the childcare and social care workforce and for issues of accountability to the users of these services.

In addition, some now argue that the UK government’s policies of introducing more competition into the supply of health services may leave them subject to EU competition rules, despite the recent decision to exclude public services from their application (Timmins, 2007). In addition, it may mean procurement laws have to be followed that could be used by the private sector to challenge the government’s interest in developing new forms of ‘social enterprise’ as providers within the health services (Financial Times, 2007). Large corporations, many of whom are North American in origin, are moving into the health, social care and to a lesser extent the childcare sectors. These important players have a vested interest in encouraging the UK to continue its support of private sector development of care provision and move closer to a US residual welfare state model.

Childcare tax credits, direct payments and personal budgets are seen primarily as a means of stimulating the market which will, through competition, deliver value for money. Meanwhile considerable restrictions are placed on using direct payments to pay relatives, a choice that would not develop a market, but rather be a dead weight cost for which government would otherwise not need to pay (since relatives are assumed to be willing and able to care without payment). For the same reasons, childcare tax credits are only available for offsetting against the cost of formal childcare, thus excluding relatives unless they are registered childminders. Although the budget for Children’s Centres is to be increased by £340 million over the next three years, the funding per child will be at a much reduced level (£250 compared with £1,300) on the grounds that in more affluent areas less public provision will be needed or should be made.

The growing emphasis on defining people as consumers operating in a market rather than as citizens, risks decreasing their willingness to consider their demands on the welfare state in the context of others’ needs. In other words, both social solidarity and a sense of collective responsibility for others’ well-being may be diminished (Rosen et al., 2005).

3 		PARENTS AND CARERS
3.1		Unpaid carers
It is family and friends, of course, who still take on most of the caring responsibilities. This support is given willingly but must not be taken for granted.
(Prime Minister, Green Paper on Health and Social Care, Preface, 2005) 

There is little evidence that families are caring less than they did in the past (Joshi, 1995; Walker, 1995; Grundy, 1999). Despite the recent growth in the formal childcare and social care workforce, unpaid carers outnumber paid carers by three to one. In contrast to earlier gloomy predictions (Moroney, 1976), over the past quarter of a century women’s increasing economic activity rates have not resulted in a reduction in family care. Irrespective of whether or not they are in paid employment most carers do not want to stop caring altogether. There is no simple trade-off between care provided in the family and public care services. Many carers need services to support them in what they are doing.

On the contrary, there is evidence that families are caring more and that the ‘dual earner family’ is still dependent upon those traditional family systems in which women of all generations take responsibility for either the management or direct provision of care, or both. Research on childcare arrangements within families in other countries in the EU as well as in the UK reveals very complex patterns of cross-cutting shifts between paid and unpaid work between the generations. (Glucksmann, 2000; Tobio, 2004; Wheelock et al., 2003) However, these systems may not be able to survive unaided indefinitely if the European Employment Strategy (EES) goals for more women and more older people of working age to be in employment are achieved.

It is not new for grandmothers to help with childcare in working class families (Nixon, 1979; Roberts, 1984; Martin and Roberts, 1984). However, far more grandmothers are involved in childcare now than 25 years ago, when employment rates among mothers of young children and grandmothers were significantly lower. (In 1980 only 31 per cent of mothers with a pre-school child were in employment, compared with 56 per cent in 2005.) The latest national study found a third of employed mothers depended at least in part on regular childcare from grandparents, mainly grandmothers (Bryson et al., 2006). 

However, as a result of the very young ages of marriage and childbearing in the 1960s, the current generation of grandparents are much younger than previous or future cohorts, with half of grandmothers currently under 65 years old. Economic activity rates among women in their 50s have steadily increased from 61 per cent in 1980 to 69 per cent in 2006. Many grandmothers are in paid work themselves and some may have to change their hours or stop paid work altogether in order to help with the care of their grandchildren. 

The General Household Survey (GHS) for 2000 estimated that there were 6.8 million adult carers living in 5 million households (see Table 1). This is not very different from the first GHS survey of informal carers in 1985 and means that in 2000, a fifth (21 per cent) of households contained at least one person doing unpaid care work. However, there has been an increase in the numbers providing over 20 hours a week from 1.5 million in 1990 to 1.9 million in 2001 (H of L Deb. 7 Dec. 2006, Col. 1298). Altogether, 16 per cent of people aged 65 years and over are carers and they account for over half of those providing at least 20 hours care a week. This is not surprising given that the majority of those needing care are themselves aged over 65 years (Wanless, 2006).

Table 1	Number of hours spent caring per week

Number of hours caring
per week	Co-resident carers %	Extra-resident carers %	All carers %	
Under 20
20 to 49
50 or more	37
32
31	89
9
1	72
16
11	
Total	100	100	100 = 6.8 million	

Source: Maher and Green (2002) Table 4.3.

Women form the majority of carers. However, the numbers of men caring more than 20 hours a week is significant, particularly among older age groups (Maher and Green, 2002). On average, men die younger and marry younger women. Older men are therefore more likely to be still living with their spouse who may need care, than are women of the same age. Increasing longevity of men also means spouses are living together for longer in old age caring for each other in their own household. The shift from filial care to spousal care in old age also results from more adult children moving away from home before their parents become frail. The decline in co-residence between adult children and their elderly parent(s) does not necessarily mean that families care less for the older generation than they used to. Many older people do not want to become completely dependent on their families and friends because then they feel a ‘burden’ in a way which undermines their dignity. If the younger generation are caring in different ways from the past this may be more a result of the expectations and wishes of the older generation than a sign of weaker family obligations among the young. This is a consistent finding across a number of European countries (Daatland and Herlofson, 2003). Living alone should not necessarily be equated with loneliness or lack of support, especially for women. There is little evidence that old people are lonelier than 50 years ago (Victor et al., 2005). 

A more sophisticated analysis of the changing demand for and supply of unpaid care is required that takes gender differences seriously in the context of restructured welfare states and socio-economic changes. For example, women are much more likely than men to receive help from family members living outside the household because they have invested more in family life at an earlier age. Moreover, this investment usually continues beyond marriage or partnership breakdown. For men the picture may be different in future if they do not have a spouse and the willingness or availability of younger relatives to provide assistance decreases.

Time-use studies provide useful data at the aggregate level for measuring time spent on care. The development of Household Satellite Accounts has made it possible to estimate the value of household production at the macro level (Murgatroyd and Neuberger, 1997; National Statistics, 2002). In Britain in 2000, the annual value of childcare and the social care of adults, elderly sick or disabled was estimated to be £231 billion. This represented a third of total household production £693 billion and was more than a quarter of GDP calculated on an equivalent basis in the same year (ibid.). It far exceeds the annual cost of formal childcare (£5.2 billion) and adult care services (£10 billion) in 2005.

These studies, however, do not reveal the complexity of the relationship between families, markets and state policies, neither do they tell us how these complexities are managed, or by whom within the family. Too often the importance of family relationships and exchanges beyond the household are ignored, underestimated or taken for granted in policy debates. For example, the government’s Ten Year Childcare Strategy (DfES and HMT, 2004) only considered that trends in the economic activity rates of men and women up to the age of 54 years were relevant to the future of childcare provision, thus ignoring changes in many grandparents’ availability.

Broader economic and social changes have made some forms of care more necessary. Journey to work times have increased, adding to the length of the working day outside the home. Over the same time children’s mobility has become more constrained, both by increased traffic and by parental fears about safety, as indeed is the mobility of frail elderly people. However, social and institutional arrangements have not necessarily adapted to changed conditions. The OECD report A Caring World, mentioned earlier, noted that:

social arrangements ... often continue to take for granted the flexibility and availability of a mother's time (e.g. the time schedule of schools, the offer of childcare services, the opening hours of shops, public offices etc.).
(OECD, 1999, p.16)

The report is not unusual in remaining silent on the need to change these social arrangements so that they are more easily synchronised with the actual lives of mothers and other carers. 'Mainstreaming care' would mean breaking that silence and ensuring that policies in transport, education, health and other public services are thought through and adjusted to ensure that services are accessible to people with caring responsibilities as well as to children, people with disabilities and frail elderly people themselves.

This has important gender implications. In so far as it is difficult to reconcile caring with employment and other opportunities in society, women who have historically been allocated the sole responsibility for caring in their families are the ones who are more likely to put caring needs before their employment prospects, so that the latter suffer as result. This, as we have seen, can carry across generations with grandmothers currently more likely to adjust or give up employment to care for grandchildren than grandfathers. As retirement ages rise, this will become a more important issue for more families. 
3.2		Employment and unpaid care
There is evidence that more women today will remain childless than their mothers or grandmothers. (Only 10 per cent of women born in the mid 1940s had no children, compared with over a quarter of those born in 1960.) However, the proportion of women who are carers of adults over the last forty years has increased, and there is some evidence that this is true also of economically active women who combine being a carer with employment. The Department of Health (DH, 1999) estimated that 2.7 million carers were combining employment with care for another adult. The 2001 Census found that 1.6 million full-time employees were providing unpaid care to another adult. It should be noted that the figures in Table 2 are not exactly comparable over the years because the wording of the questions in the 1965 and 1980 studies drawn on were different from those in the 2000 General Household Survey. 

Table 2	Percentage of women and men in part-time and full-time employment who were also carers in 1965, 1980 and 2000

Economic activity status	All adults	  Women	Men	
		1965	1980	2000	2000	
Working full-time
Working part-time
Unemployed
Economically inactive
All aged 16 to 64	13
17
15
21
16	7
15
na
na
11	11
16
na
na
13	15
18
16
23
18	12
14
15
17
13	

Source: Maher and Green (2002) Table 2.4, Hunt (1968), and Martin and Roberts (1984) p.113.

The targets in the EES, accepted by the UK government, show that the earlier concern about the impact of women's employment on their ability and willingness to care is diminishing. The 2001 census found that in England and Wales, 60 per cent of non-carers were in employment but, as Table 3 shows, adults, particularly women, providing at least 20 hours care a week have lower employment rates. Problems in combining unpaid care with employment particularly affect older employees. The probability of being a carer increases from 8 per cent when aged 16-29 years to 20 per cent aged 50-59 years. Among all but the very old, women are more likely to be carers, with 25 per cent of women in their fifties being carers compared with 18 per cent of men of that age group.

Table 3	Percentage of adults of working age spending at least 20 hours per week caring by gender and employment status*

	Men carers %	Women carers %	All adult carers %	
Employed full-time
Employed part-time	47
7	16
26	26
19	
All in employment
Not in employment	54
46	42
58	46
54	

Note: *Adults aged 16 to 64 living in private households. 
Source: Maher and Green (2002) Table 4.7.

Arber and Ginn's analysis of the British Household Panel Surveys for 1991 and 1995 found that people doing a substantial amount of caring were less likely than others to be in paid employment before beginning care-giving (Hutton, 2000). It is difficult to know whether they became carers because they were not in employment and therefore more 'available' than other members of the family (Finch, 1995). Most people did not change their employment status when starting to care: the impact of caring becomes more noticeable a year later. 

As Table 3 shows, women find it more difficult to reconcile caring with employment. Women have historically been allocated the primary responsibility for caring in their families, putting caring needs before their employment prospects, so that the latter suffer as result. This, as we have seen, can carry across generations with grandmothers currently more likely to adjust or give up employment to care for grandchildren than grandfathers. To rectify this inequality requires that policies are implemented to reduce the strains in combining caring responsibilities with employment and other forms of engagement in society. This will help those women who take on caring responsibilities to stay attached to the labour market. At the same time, by reducing the difficulties for men of combining paid employment with unpaid care, it will help redress the imbalance between women’s and men’s contribution to caring. 

This is an urgent question. If the difficulties of combining employment with caring responsibilities do not diminish, the EES objectives will not be met, in which case pension arrangements may be unsustainable. On the other hand, if the EES objectives are to be met and particularly if retirement ages are also raised, the supply of older women prepared to give up or adjust their employment to care for children and adults needing care will necessarily diminish. Current caring arrangements that rely excessively on unpaid caring by both younger and older women are unsustainable. 

Policies that can contribute to the objectives of achieving sustainability and reducing gender inequalities include finding ways in which society can support those caring for family members by sharing that care with them, enabling family members, including men, to have more time to care, and providing high quality alternatives to family care, so that people are not trapped doing more unpaid care than they want by a lack of acceptable alternatives. In other words parents and carers need time, cash and services, and the first of these involves employers as well as the wider society.

3.3	Time for parents and carers
a) Working hours and flexible working
The UK labour market does not produce general conditions of employment or working hours that are compatible with full-time workers making a substantial contribution to the care of children and adults or with men and women sharing caring responsibilities. The UK’s full-time working hours, for both men and women, were the longest of the EU12 in 2003 and male employees working full-time in the UK in 2006 worked the longest usual weekly hours of those in the EU25. (Figures from the latest Labour Force Survey show that in the UK, the proportion of employees working more than 45 hours a week fell from 26.2% in the last quarter of 1996 to 20.4% in the last quarter of 2006. This fall of 5.8 percentage points is due mainly to 943,000 fewer men working these hours. The proportion of women working long hours has shown little change over the same decade, falling just 0.6 of a percentage point from 10.3% to 9.7%. However, this is an increase of 65,000 women, because of the rising employment rate of women over that period.) 

These hours provide one of the main stumbling blocks to promoting equality between fathers and mothers in both caring responsibilities and labour market opportunities. Many women are restricted to low paid part-time employment because long hours of full-time employment are incompatible with the long hours that their partners work. This restricts both the father’s ability to take part in caring for their child and the mother’s available time for employment and her ability to take up labour market opportunities. The same applies to those with caring responsibilities for older people: fulfilling or even sharing these is difficult for those working long hours. It is interesting to note that research on the impact of the 35 hour working week on French families suggests that it has encouraged a new pattern of sharing paid and unpaid work between the parents of young children, as fathers are spending more time with their children (Fagnani and Letablier, 2005 p.139).

Working hours are regulated by the European Working Time Directive (WTD). However the UK government has allowed individuals to opt-out from the WTD and favours them retaining that right. It points to the wider dispersion of working hours in the UK labour market as evidence of its flexibility compared to that of other EU countries. However the gender division inherent in that wide spread of hours, with women bunched at the lower end and men at the top end, could be seen as evidence, not so much of individual freedom to choose working hours, but of constraints provided by family finances and gendered caring responsibilities. This is because decisions about the care of children and adults are not individual ones. Giving individuals who share caring responsibilities the choice about their working hours restricts the choices of their partners. Leaving aside the issue of whether all individuals who opt to work longer hours are really choosing to do so, it is important to recognise that, despite recent small improvements, this remains a right exercised by men at the expense of women’s labour market opportunities. Implementing the Working Time Directive without the individual opt-out would give children the opportunity to be cared for by both parents, and adults needing care the opportunity to be looked after by friends and family members of both sexes. It would be one step in promoting more gender equality in both caring responsibilities and labour market opportunities, where the UK lags behind other European countries with the worst gender pay gap in the EU, as Figure 4 shows (Plantenga and Remery, 2005). 

In order to enable workers with caring responsibilities to work flexibly the government has given parents of children with disabilities and young children under the age of six the right to request a change in working hours. The implementation of the Family and Work Act 2006 will extend this right to request to work flexibly to those caring for close adult relatives (including step and half relatives as well as in-laws) or co-resident friends. On the one hand, the new legislation is inclusive of many carers because ‘care’ is being broadly defined and not confined to the heavy care which meets the eligibility criteria of the Disability Living Allowance or Attendance Allowance. On the other, this right is currently not available to the many carers providing care on an ongoing basis to neighbours and friends, who account for one in five of carers providing at least 20 hours per week, nor to grandparents looking after grandchildren. Such artificial distinctions among carers can be a cause of resentment and may be reducing the take-up of the right to request among those that are eligible. 

Current regulations that surround the right to request flexible working are themselves too inflexible to meet the needs of some parents and, in particular, many carers of adults. The requirement that the request to work flexibly can only be considered after the employee has been with an employer for 6 months or only at intervals of 12 months will exclude some carers at a very critical time. Caring needs, particularly of adults, can be unpredictable and arise at any time. 

Under current regulations, changes in working hours through a right to request flexible working are permanent. Already parents and carers can become trapped on reduced hours, with negative effects on life-time earnings and opportunities (Francesconi and Gosling, 2005; Manning and Petrongolo, 2005) and pension entitlements (Evandrou and Glaser, 2003). The current rules on the right to request flexible working reinforce this trap. This is particularly important to resolve for carers of adults for whom future demands on their time are unpredictable in their onset and severity. Nearly 40 per cent of carers of adults in 2000 had only started to care in the previous 12 months and over 40 per cent of those who are carers in one year have ceased to be carers by the end of the following year (Arksey et al., 2005). Requiring carers who may need more flexible arrangements, perhaps for just a few months, to make a permanent change will entrench any labour market disadvantage.

Figure 4 	The gender pay gap in EU25, Romania, Bulgaria and Norway, 2002

Source: Eurostat (2005), Table 4.
Notes: AT Austria, BE Belgium, BG Bulgaria, CZ Czech Republic, DK Denmark, DE Germany, EE Estonia, EL Greece, ES Spain, FR France, IE Ireland, IT Italy, CY Cyprus, LV Latvia, LT Lithuania, LU Luxembourg, HU Hungary, NL Netherlands, NO Norway, PL Poland, PT Portugal, RO Romania, SI Slovenia, SK Slovakia, FI Finland, SE Sweden, UK United Kingdom.

If the right to (request) flexible working were eventually extended to all workers, not only would all carers and parents of older children be covered, but all employers would have to develop the capacity to respond to requests to work flexibly and benefit from the better workplace culture that would result. This might in practice be more workable than the current need to make a special provision for only some employees. Further, this might help rectify the labour market disadvantage experienced by parents and carers by ensuring that were in the same labour market position as other employees. This should remove any potential workplace resentment from other employees about 'special privileges', and guard parents and carers against having to pay for those privileges in inferior pay or working conditions in other respects. 

Whether parents and carers take up the right to request flexible working also depends on whether they can afford any cut in pay if the flexible arrangements include reduced hours. It is recognised that parents may find a requirement to work full-time difficult to combine with their caring responsibilities, so parents need only work at least 16 hours per week instead of the 30 hours required of those without children to qualify for Working Tax Credit (WTC). Adults with disabilities can similarly qualify by working 16 hours. However this concession is not available for carers looking after a disabled or elderly adult, nor for people other than parents looking after children, in particularly not for grandparents looking after grandchildren. Both groups of carers are predominantly older women who are even more likely than younger women to drop out of the labour market, often permanently, if they have difficulties combining work and care. Enabling them to qualify for WTC once they are working 16 rather than 30 hours might enable them to combine caring with employment, helping the UK to reach the EES employment targets for older workers.

The UK’s long working hours and the right to request flexible working are connected. Unless the political and workplace culture is seen to be supportive, carers will not take advantage of the right to request flexible working and the policy will not achieve its aims. The greater the difference in hours between those in full-time employment and those working ‘flexibly’, the more likely the latter will be penalised in terms of pay, career development and promotion. Retention of the individual opt-out to the EU Working Time Directive is perpetuating these penalties and making the right to request flexible working less effective in overcoming the labour market disadvantage of parents and carers than it otherwise would be.
b) Paid leave for parents and carers
One of the main aims of the Work and Family Act 2006 is “to improve entitlements for employees with caring responsibilities” (Work and Family Act, 2006, Explanatory Notes, p.1). When fully implemented, paid maternity leave will be extended from 26 to 52 weeks and there will be statutory additional paternity leave for those fathers whose partners give up part of their maternity leave. Fathers already have two weeks paid paternity leave at the time of their child’s birth.

There is a wealth of experience of maternity, paternity and parental leaves in Scandinavia (Sweden, Norway, Denmark, Iceland, and Finland), going back at least 30 years (Boje, 2006). Each country developed its leave at different times and at a different pace with different priorities, but there are some general lessons to be drawn from the implementation of their policies and the extent to which they have succeeded, particularly with respect to achieving gender equality. For this, the most important issue is how far leave policies enable men to become more caring parents.

•	Paid leave which falls well short of earnings will not be taken, particularly not by fathers. Adequate replacement levels are essential.
•	Fathers need plenty of encouragement to take parental leave. Taking part of a mother’s leave is not popular. Even where parental leave has a non-gendered name and is the right of the couple, and thus either parent can take it, most couples are likely to conform to current gender norms so that the mother takes most of the leave. Economic pressures, where there is unequal pay, reinforce this tendency. Even in Sweden where it was first introduced, fathers only take 17 per cent of total parental leave. Some countries have publicised high profile fathers taking their leave in order to encourage others to do so.
•	The uptake of 'Daddy leave', an individual quota of paid parental leave that cannot be transferred to the mother, has been more successful in encouraging father’s involvement in caring for babies. In all the countries that have introduced such leave the majority of fathers now take it.
•	In workplaces with a flatter salary structure parents are more likely to take leave than in those with a more unequal structure. This is possibly because there are less long term penalties for taking time away from work. Workplace culture is important too. Where taking parental leave is common practice so that workplaces develop practices to cover for those on leave, and the workplace culture supports it, parental leave is more likely to be taken in full. 
•	Women and men in the public sector are more likely to take parental leave than those in the private sector. This may, in part, be because there is a more favourable workplace culture and less fear of career penalties from doing so. In all countries, as in the UK, women are found in greater numbers in the public sector.

Some of these lessons for gender equality have not been taken into account in the provision of this new Act. First, an increase in 'maternity leave', even if some of it can be transferred to the father, must set back the cause of equal opportunities by encouraging gender stereotypes and reinforcing gender inequalities both in the home and in employment. While in the short-run this would probably be the case even if the extra leave was 'parental leave', and fathers were equally eligible as mothers, there is more scope for changing gender norms if fathers were encouraged to take such leave and to see themselves as having equal rights and duties with respect to their children. An individual, rather than a transferred, right to such leave would make it much more effective in promoting men’s involvement in caring and gender equality in the long-run.

The level at which leave is paid will remain well below earnings replacement level making leave for the father unaffordable in most couples where the man is the higher earner. Not all fathers take even the two weeks paternity leave to which they are entitled; instead they sacrifice annual leave, which is better paid. An important step in promoting equal opportunities would be to improve the rate of pay for all forms of leave in the first year of a child’s life.

The evidence cited above suggests that the most effective change would be for all leave to be earnings related as it is in many other countries (to a ceiling above which employers are encouraged to make up the difference). In these countries such payments are not seen as unfair because they are part of National Insurance schemes, to which all employees, and their employers, pay into on an earnings related basis. They are, therefore, a way in which the costs of a parent taking time out from employment to look after a child are spread among all workers and employers according to income. This is in contrast to the UK, where the costs of taking parental leave, above the minimal current level of paid leave, are borne by parents themselves. National Insurance could be used in the UK in such a way too, paid for by an increase in the Upper Earnings Limit (UEL), whose level has not kept up with average earnings (although it has been increased in the 2007 Budget). 

The current level of maternity and paternity pay is not even that of a full-time employee on minimum wage. The first year of a child’s life is one in which caring demands and expenses are high. Although tax credits cushion the blow for some families, many more see an appreciable drop in income during that year. 

3.4	Services
a) Childcare 
The government brought in its National Childcare Strategy because it recognised that without available and affordable childcare mothers will not take up paid employment. By September 2006 there had been a net increase of 644,000 registered childcare places since 1997, providing one registered place for every three children under eight years old compared with one in nine in 1997. Half of non-working parents say that they would work if good quality and affordable childcare was available. However, the latest DfES funded national survey found that four in ten parents think there are insufficient places in their area. Parents of children with disabilities or special educational needs found suitable childcare both scarce and expensive (Bryson et al., 2006).

The same survey found that higher income families were more likely than low income families to use formal childcare, while children of lower earners are more likely to be looked after by their own mothers or other informal carers (Bryson et al., 2006). This suggests that cost remains an important limitation to the use of formal childcare. While the expansion of free part-time nursery education has reduced the average cost of childcare for three and four year olds, the cost of childcare for those under three is high and rising, for reasons which are discussed below (p.55).

Moreover, there is a lack of flexibility and fragmentation between care and education which can be problematic for parents. The current entitlement of 12.5 hours free nursery education for all 3 or 4 year-olds must be used over five half-days. Local authorities have an additional £82 million/year for 2006/07 and 2007/08 for extending this free provision from 33 to 38 weeks At the same time the hours are being increased to 15 hours in twenty pilot areas, and in 2010 all three and four year olds will be entitled to 15 hours free nursery education that can be used more flexibly over three days. Currently, working parents may not be able to take full advantage of free nursery education unless either they have access to ‘wrap round care’ and someone to escort the child to a different location, or they can afford childcare in the private nursery sector, in which over half of these free places are located. Formal care does not replace informal care in a simple way.
b) Services for adult carers
The context within which the development of adult social care is taking place is very different from that for childcare, where a single government department and a Minister for Children is now responsible for both the formal education and the care for young children. Health care and social care responsibilities are in the Department of Health at central government level but at the local level these responsibilities and budgets are split between Primary Care Trusts (PCTs) and the new Local Authority (LA) adult social services departments. The Department of Communities and Local Government (DCLG) is responsible for LA finances. Social care budgets have not been ring-fenced and have to compete with other local services. This is in contrast to the significant expansion of free nursery education described above, which has not taken place at the expense of the development of childcare services, because education budgets have been protected.

Second, and perhaps most significantly, the need for carers to be able to rely on affordable and good quality services to replace or supplement the care they are giving has yet to be recognised to the extent to it is, both in principle and practice, for parents of young children. As argued above (p.8) this is partly because the consequences of older women’s increasing involvement in paid employment and its implications for their caring capacity, have not been faced. Legislation such as the Carers Recognition and Services Act 1995 and the more recent and comprehensive Carers (Equal Opportunities) Act 2004 acknowledge the importance of supporting carers. However, the numbers actually receiving information, advice or an actual service is very low at 10 per cent for carers of elderly people (Wanless, 2006, Annex 11, p.14). The Local Government Association (LGA) are warning that without more resources, carers’ needs will remain unmet. To meet them, far more than the extra £25 million for carers announced in the Budget 2007 is needed to provide more respite care, advice and other services.

Third, there is also opposition in principle to providing such care beyond the minimum needed to enable them to continue caring, the idea behind respite care. The premise seems to be that if the state does more, families will do less because their motivation to support or care will be diminished, if not destroyed, leaving the state with an ever expanding bill to pay. Without any supporting evidence, this premise has had a long-standing continuing impact on policy. For example, while the majority of the1999 Royal Commission on Long Term Care supported the proposal that personal care should be provided free at the point of use on the same basis as health care, a minority rejected this on the grounds that "universal welfare provision discourages thrift and self-reliance” (Royal Commission on Long Term Care, 1999, p.116), and warned that with respect to domiciliary care “the psychological effects of providing an entitlement to a free benefit should not be underestimated” (ibid., p.119). 

The government adopted the minority view, that the right to free personal care would be costly and resources would be better spent on supporting poorer elderly people and their carers. Scotland, however, used its devolved powers to introduce free personal care in 2002. The Welsh Assembly agreed in 2003 to introduce free domiciliary care, but its devolved powers are not as financially enabling as those in Scotland, and in 2006 it deferred a decision to do so. An evaluation of this policy change in Scotland is now available. The Scottish experience shows that there was no decline in informal caring. The £8 million, estimated on the basis of US research, allocated in the budget to cover the expected substitution of formal for informal care proved unnecessary. These early results suggest that:

…the increased demand for free personal care from those who have informal carers may represent a need for these informal carers to be supported to continue caring, rather than their withdrawal from care in favour of services outside the home.
(Bell and Bowes, 2006, p.35)

Indeed this finding is consistent with other studies which found that the supply of informal care has increased in recent years in Scotland (ibid., p.92) despite evidence that the numbers of formal care workers have also increased (Wanless, 2006).

The evaluation in Scotland also showed that the availability of support with personal care encouraged a more holistic approach, facilitating more joined up thinking between health and social services, which was particularly important for people with certain conditions, such as dementia. This latter finding is particularly important given the concern about the demands which the care of the projected rising numbers of elderly people with dementia will make on both informal and formal care services. Further, the researchers found that the intimate tasks involved in personal care could be problematic and stressful for some unpaid carers and possibly undermining of existing relationships. Having a non-related care worker to do these tasks enabled relatives to care in other ways. While there are some important differences between Scotland and England, in particular different rules applying to Attendance and Disability Living Allowances, and heavier reliance on the private for profit sector in the latter, these are important findings.

The Royal Commission on Long Term Care (1999) also recommended that all care assessments should be made on a ‘carer-blind’ basis, for this would allow both the giver and receiver of care some choice over the balance between formal and informal care. This was also rejected and as a result of inadequate funding from central government to meet increasing numbers of elderly people needing domiciliary care, social care is even more tightly rationed than 10 years ago (the LGA estimated a £1.8 billion shortfall, letter to the Chancellor, 17 Dec. 2006). In addition, the financial constraints facing many PCTs are having a knock-on effect on LA budgets. In a recent debate on adult social care in the House of Lords it was reported that 70 per cent of LA’s had been adversely affected by bed reductions or hospital closures. Baroness Andrews, speaking for the DCLG, acknowledged that some PCTs were "playing a game of pass the parcel" (H of L Deb. 7 Dec. 2006, col.1323). Increasing numbers of LAs are restricting domiciliary services to those in the highest band of need, that is, those who are the most dependent and those without carers. This has important implications for carers, who without any support may then be unable to take or continue in employment. Since many of these carers are women, it also has important implications for gender inequalities. The recent report of the Commission for the Social Care Inspectorate concluded that it is: “Carers, unpaid relatives and friends who are bearing the costs of ever-tighter eligibility criteria for services” (CSCI, 2007, p.24).

The consequences of not providing adequate services to support carers will be costly both in the short and long term. First, there is growing evidence that without support, carers’ health suffers (Lundsgaard, 2005). A review of the evidence for the Wanless committee concluded that: 

Those groups most likely to suffer ill-health as a result of their caring responsibilities receive least support, whereas those who are particularly at risk of a negative impact from long hours of care, that is those who care for the longest periods, are least likely to be able to access health care when needed.
(Wanless, 2006, Annex 11, p.38) 

The health of 72 per cent of carers over the age of 50 is adversely affected compared with 40 per cent of younger carers (ibid., p.37). Adequate support for informal carers can be regarded as a preventative health measure. 

Second, in the longer-term as larger cohorts age, demand for care, both formal and informal will rise. Sustaining and supporting carers will therefore become more important. Otherwise the need for formal care will rise even faster. But formal care services can never replace all informal care, nor would many people find that desirable. Making the giving of informal care more attractive will make good sense for those needing care, those who might care for them and the public purse. Doing so also has important consequences for the achievement of gender equality. Men are less likely to be persuaded to care more if the penalties are too high.

3.5	Cash
a) Payments in the home to parents 
In some other European countries, such as Germany, there are state payments directly to parents who stay at home to look after children. In Norway, Finland and France, these are related to the fact that such parents are not making use of a publicly funded nursery place to which they are entitled, either because there is insufficient provision in a particular locality or because that it is their choice. The Daycare Trust are suggesting that the UK government give serious consideration to giving more support to mothers who stay at home until their youngest child is three. This would include access to some childcare, particularly while training or in education (Daycare Trust 2006, p.29). Although such policies appear to give parents more choice, they are resisted by the UK government because of their dead weight costs; they would involve giving payments to many who have made the choice already to bear that cost themselves. 

It also conflicts with their policy of encouraging employment, especially for lone parents. The economic activity rate for lone parents at 56 per cent in 2006, is still far short of the government’s target of 70 per cent. Policy with respect to lone parents, who are currently eligible for Income Support if they have children under 16 years old, is moving in the opposite direction, with attendance at work-focused interviews required for lone parents of ever younger children. In March 2007, the government welcomed the Freud report’s proposals that, in two or three years’ time, in the expectation of adequate and affordable childcare provision, including after-school services for school children, increased support in finding work should go with placing greater responsibilities on lone parents to look for work once their youngest child reached 12. The government indicated that this age would subsequently fall to 11 and suggested that greater compulsion in the form of benefit cuts would be applied. However, these may not be the parents for whom better childcare would be the most effective in helping them enter employment. As Chris Pond, Director of One Parent Families, commented: 

Most lone parents with older children are already working. About 70 per cent already have a job. Those who are not working very often have good reasons for not doing so.
(BBC News, Monday, 5 March 2007)

Further, the opportunity cost of staying at home to care for others has increased as real wages have risen (see p.53 below). If payments to carers were to provide a real choice, they would have to rise in line with real wages, and would therefore be increasingly expensive compared with supporting paid and unpaid care in some other ways. And such payments in themselves would cope with only the immediate loss of income from taking time out of the labour market, and not with the long-term disadvantages that employment gaps bring in today’s labour market. Policies that address these disadvantages would be needed if enabling parents to leave employment to look after their children were not to create longer-term problems that intensify gender inequalities. Until there is greater labour market equality, and people can take time out the labour market without suffering disproportionate penalties, the need for parents and carers to have time out of employment to care for children and adults is better addressed through leave from employment, rather than payments that encourage severing all links with the labour market.

Paying allowances for parents to care for their children at home would also do little to reduce the class differences in the cost of being a mother and the experience of gender inequality. Currently, highly skilled women who do not interrupt their careers to have children spend more on childcare fees than women who are less well educated. Less well educated women take more time out of the labour market, because the cost of childcare would make a bigger dent in their incomes. They may also live in a culture in which non-familial childcare is either less accepted or formal childcare services are insufficiently sensitive to their needs. The latter is often the case for some minority ethnic groups (Daycare Trust, 2006). However, the latter trajectory has a higher life-time cost in terms of future employment prospects and earnings (Rake et al., 2000). An option to be paid to look after their own children would be taken up more by mothers who earned less, since their immediate opportunity cost of giving up employment would be lower. But this would lead to greater labour market disadvantage for mothers of lower earning capacity, widening inequalities between more and less educated women, as well as between women and men among lower earners, because the life-time cost of being a mother is much lower for those who stay in employment (Joshi and Davies, 2000). The mothers who pay the highest costs for having children are low earners who give up employment to look after their children. Paying parents to do so would reinforce this as well as existing tendencies for children of different classes and ethnicities to be looked after in different ways and therefore not to mix with each other, entrenching divisions in society from a very young age.
b) Payments for carers in the home

Informal caring is a term which hides a rich variety of human relationships: between spouses; between parents and children: between kith and kin, friends and neighbours. Most care without giving thought to the financial cost of caring, it somehow demeans them to reduce their dedication to cash amounts. 
(Royal Commission on Long Term Care, 1999, p.133) 

The Carers Allowance (CA) was the first cash benefit paid directly to the carer to be introduced in the UK. Significantly it was paid to those who did not conform to the male breadwinner/dependant housewife model: single women (Beveridge’s ‘domestic spinsters’) and men who had given up paid employment in order to care full-time. Married and cohabiting women were not eligible for CA until the UK was challenged in the European court in 1986. This is an illustration of the impact of an early European Community Directive on Equal Treatment on social security policy in the UK. Along with the Dependent Living Allowance (DLA) and Attendance Allowance (AA) (see next paragraph), the purpose of CA is to support and increase care in the community. It is paid directly to a carer, not necessarily a relative or co-resident, who is providing at least 35 hours care a week to someone in receipt of DLA or AA. Carers Allowance, worth about £46 weekly, is supposed to compensate for not being in employment, and therefore is not paid to anyone earning at or above the lower NI earnings limit, £84/week (2006/7 rates). This is now one of the lowest benefits in the social security system (well below the level of the basic pension a married woman can claim on the basis of her husband’s contributions, to which it was originally equated). Nevertheless it costs over £1billion annually, for it is claimed by over 300,000 carers of working age and just over 22,000 carers over working age.

A system of allowances paid to people with disabilities and chronic illness was also introduced in the 1970s. These are Dependent Living Allowance (DLA) for children and adults of working age and Attendance Allowance (AA) for people over retirement age. They are not means tested and there are no restrictions on how the recipient spends the money for it is "compensation for disability rather than a payment to cover the costs of services" (Wanless, 2006, p.92). Small research studies show that the AA and DLA are used in various ways including to pay family carers (Ungerson, 1999). The individual sums involved are not large, ranging from £41.65 to £62.17 weekly, according to the level of incapacity and the need for personal care. However the numbers claiming are significant, with 1.65 million claiming AA and 2.8 million claiming DLA in May 2006. As the Wanless committee pointed out, hinting that these perhaps could be better spent on improving local services, too little is known about how the £3.7 billion (2005 figures excluding the mobility component of AA), which these allowances now cost in total, are spent (Wanless, 2006, p.91).

A strong commitment to care for family members does not mean that the transfer of money either to or within the family to the carer is either rare or unnecessary. Currently, a quarter of working mothers ‘pay’ grandmothers for childcare, although it is rarely regarded as a ‘wage’ but is more in recognition of expenses incurred, wages foregone or symbolic of appreciation (Land, 2002). It is significant that it is the poorer mothers who pay, continuing a long-standing tradition in which payment for informal care is a way of re-distributing resources within extended families from those with earnings to those without. Small research studies show that the AA and DLA are used in various ways including to pay family carers (Ungerson, 1999). 
3.6		The paid childcare and social care workforce

Care is only as good as the people providing it.
(Introduction to the Green Paper on Health and Social Care, 2005)
The provision of acceptable alternatives to unpaid care requires a skilled, properly trained and remunerated paid care workforce to provide high quality and sustainable care services. There are about a million workers in the childcare and social care workforce providing ‘hands on’ care (Skills for Care, 2004, p.26). They represent about 5 per cent of the UK labour market and their numbers will rise as more unpaid carers enter employment.

Reliable and comprehensive information about the care workforce, broadly defined, as well as about the providers in every sector which employs them is important in developing and monitoring policy. First, ignorance is currently limiting effective planning and monitoring of services. Second, local authorities play a large part in commissioning care services and large sums of public money are involved so there are issues of accountability. Third, the collection of standardised employment data from the private as well as the public sector is required in order to monitor discrimination on the grounds of gender, ethnicity and disability and to evaluate progress in reducing these inequalities. In other countries (Australia, Canada and the USA for example) the collection of employment data is mandatory for this purpose. The new National Minimum Data Set for Social Care is just beginning to address this issue.
3.7	Recruitment and retention
The CSCI in their first report on social care identified the recruitment and retention of staff to be a major problem. The supply is diminishing because, as Simon and Owen point out:

Firstly, the numbers of women with lower levels of education, from whom care workers have traditionally been recruited, is diminishing. Secondly, alternative employment opportunities for this group in the service sector are growing. 
(Simon and Owen, 2005, p.201) 

The pay of those providing 'hands-on' care is comparable to that of supermarket check-out and retail sector cashiers (used by the CSCI as the comparators), with half earning less than the highest paid cashiers. The workforce has an age and ethnic distribution skewed in favour of young white women in the case of child care, and older women of all ethnicities in the case of adult care (ibid.). The former source of recruitment may dry up as young women are increasingly encouraged to pursue qualified work with a career structure.

Care workers’ pay and qualifications are low. In 2005, the average hourly pay of women in the UK was £9.43 and a starting salary for teachers was equivalent to £10.53 per hour. But the average pay per hour in the childcare sector was £6.40 and that of a full day care nursery manager only £8.80 an hour (Daycare Trust, 2006, p.15). However, many in the sector are earning even less. Unqualified nursery assistants are paid less than unqualified domestic staff and administrators in this sector. In 2004, the consultants Laing and Buisson found that 20 per cent of nurseries were paying unqualified staff less than the national minimum wage (NMW) by using the 'development rate' for 18 to 21 year olds of £3.80. Students and trainees are usually paid below the NMW (CSCI, 2005, p.61). Pay rates in the voluntary and LA sector were 22 per cent higher. A survey by Her Majesty’s Inland Revenue and Customs in 2006 found one in ten providers were illegally paying below the minimum wage.

The available evidence suggests that pay rates in the adult care sector are lower than the average in the childcare sector and there are significant regional differences (Wanless, 2006, p.121). The most recent CSCI study of the home care sector used 2003 data and found pay rates at around the minimum wage level (CSCI, 2007 p.29). In the residential care sector, employers offering accommodation do not have to pay the minimum wage. 

Turnover rates crucially affect the quality of care, which depends on continuity in the relationship between care givers and receivers. On the basis of the available evidence, turnover rates appear high among domiciliary and residential care workers and across the whole social care sector, but (on the basis of inadequate data), appear to be twice as high (30 per cent) in the private sector than in the public and voluntary sector. This is not surprising given the private sector’s poorer pay and conditions. Staff turnover rates appear to be lower in childcare, though still high at 17 per cent in full-day care services and 21 per cent for out-of-school clubs (Daycare Trust, 2006, p.14).

Vacancy rates are higher in the social care sector both absolutely and relatively, compared not only with the childcare sector, but with the rest of the economy (Wanless, p.129). Recruitment is a problem and in some parts of the country, particularly in London, there is heavy reliance on migrant labour. Wanless reported that: 

…the UK is now one of the largest importers of professional health care workers in the world, with a large proportion of these staff working in the long term care sector.
(ibid., p.130)

While the CSCI recognise that the recruitment of migrant labour is an important interim measure, they argue that “this is not a sustainable means of meeting the long-term needs of the sector” (CSCI, 2005, p.69). Instead, they argue for a coherent workforce strategy that will require higher costs of recruitment, induction and training, with a clear approach to migrant workers and investment in raising the quality of social care jobs. However the UK government appears reluctant to sign up to the Temporary and Agency Workers Directives that would protect the rights of migrant workers. Arguably the most effective way to promote gender equality in qualifications overall would be better training for care workers.

In older people's residential homes, recruitment difficulties are growing and in 40 per cent of local authority areas they were worse in 2005 than in 2003 (CSCI, 2007, p.63). Overall the CSCI (p.117) concluded:

There are serious concerns for all adult services, in both residential and domiciliary care around standards ensuring the safety of people using services...Poor management of recruitment is also raising the risk that people using services will be exploited or abused by staff.

Their first inspection of home care agencies conducted in 2006 found that 39 per cent of home care agencies were not complying with national standards with respect to recruitment and selection. This includes failure to check with the Criminal Records Bureau. Under these conditions the quality of care may be very poor and in some cases dangerous.

Working conditions are also likely to be poor. It is of particular concern that the UK Home Care Association's 2004 survey found that in the independent domiciliary care sector: 

There is no fixed number of workers needed and the concept of a 'vacancy' is largely meaningless. Providers recruit on a continuous basis to get as many workers as possible, drawing on a pool of workers who work more or fewer hours as demand dictates.
(Skills for Care, 2004, p.46) 

This is 'flexible' working which requires all the flexibility to come from the workforce, and is not in the interests of either care workers or those needing care. 
3.8	Training
Training requires having sufficient staff to cover for staff while they are studying at college and to provide adequate supervision for trainees from experienced staff. However, it is entirely rational for individual private-sector providers not to invest in training staff:

…particularly in the context of a labour shortage, as they often find that staff in whom they have invested time and training then move away to other, better paid jobs.
(CSCI, 2005, p.187) 
Over a third of providers in the nursery sector reported that in 2005 they had lost employees to higher paid nurseries in the public sector. While this is less than the previous year, they still regarded the planned expansion of children’s centres from the current 400 to 3,000 as a ‘threat’ to their long term sustainability (Nursery and Childcare Market News, February 2006). Wanless noted that the reluctance of social care staff to invest in their own training is also rational because current pay levels do not reflect qualifications attained.

Public funds for training have been allocated to meet the (modest) target of having 50 per cent of all childcare and social care staff with at least an NVQ level 2 qualification. This is a lower level of qualification than their equivalents are required to have in many other European countries The Children’s Workforce Development has recently published plans to ensure 70 per cent of the early years workforce be qualified to NVQ3 level by 2010 (Nursery and Childcare Market News, Nov. 2006 p.108). However, by 2004, 79 per cent had a level 2 and 38 per cent had a level 3 qualification (Daycare Trust, 2006, p.14). The Transformation Fund, announced in February 2006, will provide £250 million over two years to enable nurseries in the public and private sectors to employ at least one graduate nursery teacher or graduate early years’ worker. It is planned to have every Children’s Centre professionally led. There is £50 million to pay for university fees and to provide cover while staff are being trained. However, this is only short term funding, despite there being no reason to suppose, given turnover rates, that the training of staff is a one-off problem. 

The social care workforce has not yet achieved the government’s target. The information needed to estimate the training needs of this sector is very inadequate, but it has been estimated that less than a third of care assistants and home carers in 2003 had some level of NVQ or SVQ (Wanless, 2006, p.127). As the Wanless committee (ibid., p.122) concluded:

It is clear that the sector will need to act in a more competitive manner to attract staff in the future. This then needs to be combined with appropriate and cost-effective training to ensure the outcomes received are of a high quality. 

It is not surprising that the CSCI has expressed concern about the state of social care. Inevitably in this context their inspections have to focus on ensuring minimum standards are achieved rather than on improvements (CSCI, 2005, p.81). Wanless also advocated quality measures focussed less on inputs and processes and more on outcomes. The childcare sector is much further on in developing measures of quality of care as well as looking at the relationship between quality of staff and measures of children’s well-being and development. What is clear is that if standards of care are to be improved in the formal care sectors, staff must be better trained, developed and rewarded. This will demand public investment because, as we have seen, individual employers do not have the incentive to provide training, nor individual workers the resources to fund their own training. This is a classic case of market failure in the provision of a public good. Parents and families have no way of signalling the value that they would put on having a better-trained more stable child and social care workforce. Left to the market, this public good will be underprovided.

4	CARE IN THE MARKETPLACE: KEY ISSUES

4.1	Productivity and the costs of care provision
The most appealing solution to the shortage of care workers would be to raise the productivity of paid care. Such a process could raise the pay and conditions of care workers at the same time as making childcare more easily affordable for families and reducing the amount that adult care would cost. Government subsidies to both could be reduced or could be used to finance improved quality. However, it is hard to raise the productivity of care, because the need to develop a relationship with clients or children sets a limit on how many people one carer can care for at the same time. After a certain point, spreading care over more people becomes synonymous with reducing quality. In care, as in education, the measure of high productivity, a high client or child to carer ratio, is specifically taken as an index of low quality.

This means that unless standards in caring are allowed to fall, for a population of given composition in terms of care needs, roughly a constant proportion of total (paid and unpaid) labour time will need to be devoted to care. This proportion would have to rise if increasing numbers need care or standards of care provision rise. If more unpaid carers enter employment the amount of paid care will need to increase. Consequently, so will the proportion of GDP spent on care activities (since only paid work is counted in GDP).

Wage costs are inversely related to productivity. So the wage bill in social and child care will rise faster than in industries where productivity is rising and wage costs per unit produced are consequently falling. The forces of innovation and competition that have limited effect on productivity in caring but tend to increase productivity in other industries will, therefore, result in a rise in the real cost of care. This is not caused by inefficiency in care provision, nor by rising standards or increasing numbers of people needing care, but is inherent in the relational nature of care. 

4.2	Effects on standards of care provision across different sectors
Rising costs of care produce pressures to reduce standards of provision. Private-for-profit providers may not be able to pass on rising wage costs to customers who are themselves income constrained, unless subsidies to those customers and thresholds for the receipt of subsidies rise in line with rising care costs (and were sufficient to start with). The only other way for such providers to stay profitable is to lower wage costs. But, as we have seen, employers cannot recruit or retain workers if they pay wages that increasingly lag behind those available in other types of work. Moreover, the introduction of the national minimum wage and its subsequent annual increases, above the rate of increase in average earnings, have restrained the ability of employers in both the childcare and social care sectors to hold down or lower wages. Rising costs and labour shortages produces a tendency to employ untrained workers and recruit from groups such as immigrants, willing to work for low wages. That puts downward pressure on standards of care and training, unless specific and subsidised efforts are made to improve standards, as we have seen happening in the case of child care but not social care (see pp.41-43 above).

A two -tiered (or more) care market is likely to be the outcome. Those who can afford to devote an increasing proportion of their income to paying for care will be able to purchase a high standard of care. Whereas those for whom existing care costs are already a struggle, or rely on state subsidies that fall behind rising costs, will have to accept declining standards. And since achieving higher standards will require a better trained and paid workforce, a two-tier workforce in paid care is likely to result.

Rising costs also have an effect on public sector provision. In the public sector such cost increases tend to be seen as signs of inefficiency, rather than the consequences of an inherent characteristic of care. This has led to political pressure for privatisation to apply the discipline of the market. In response to such pressures, a determination to maintain quality may be taken as yet further evidence of inefficiency, yet without such a specific political commitment, standards of care and training are likely to fall. 

Some care is provided through the 'third', not-for-profit, sector. Here the effect of increasing wage costs is to create a continual and permanent need for greater funding. In practice, funding tends to lag behind costs, creating problems of insolvency and similar pressures on standards. In such circumstances, the expectation that providers given short-term funding should eventually become self-supporting is unlikely to be realised. In practice such short-term funding often just leads to churning, whereby existing providers cannot survive once funding ceases and new entrants on similar short-term funding are brought in to fill consequent gaps. This has been a long-standing problem in social care. Further, continuity of provision is important in care, especially in residential care, where an insolvent provider may mean a disorienting and even fatal change in both home environment and familiar carers. The pressures on quality in such circumstances are high.

This trend is characteristic of private sector nursery provision as a whole. As Table 4 indicates, in most years the number of full daycare providers closing was more than half the number of new ones starting up (although the figures exaggerate turnover to some extent since some of those may have been counted as closing down and opening when ownership or category of provision changed). 

Table 4	Turnover among full daycare providers

Full daycare providers	Opened	Closed	
2003/4	2,500	1,100	
2004/5	2,800	1,800	
2005/6	2,300	1,300	
March to Sept 2006	1,200	710	

Source: Ofsted, cited in Laing and Buisson, 2007, p.168.

Finally, some paid care is provided by carers employed directly by those they care for, or in the case of children, by their parents. There has been a long tradition of employing nannies by well-off families in the UK. As a sector they have been growing in recent years as increasing income inequality and increased employment rates among well-educated mothers has led to a growth of families in which both parents are high earners. Families and adults needing care also sometimes employ carers directly. The government now requires local authorities to offer to people with disabilities, including older people, direct payments to enable them to employ people directly or to purchase care from larger providers as they wish. The idea behind this (see below) is to enable market forces to improve client’s control and value for money. This, as we shall see, may be harder to achieve through the market for a commodity like care than others for which productivity can more easily be raised without diminishing quality.
4.3	Consumer choice and the market
Of the different forms of paid care provision that exist in the UK, the government currently favours private sector provision, whether by a firm employing carers or their direct employment as a means of giving care recipients the opportunity to exercise choice. However, as we have seen, recipients’ choices are also restricted as they are not allowed to spend direct payments on care by co-resident relatives, for example. But choice is not only supposed to be what care recipients want; through purchasers being able to choose where to allocate their custom, more efficient providers will prosper and less efficient ones fail raising the quality and value for money of provision. This is key to the government’s reform of public services because:

Giving people a choice about the service they can have and who provides it helps ensure that services are designed around their customers. An element of contestability between alternative suppliers can also drive 

up standards and empower customers locked into a poor service from their traditional suppliers.
(The Prime Minister’s Office of Public Services Reform, 2002 contents page, emphasis added)

However, for reasons to do with the nature of care itself, consumer choice may not be as effective a way to guarantee its quality as it is, at least in theory, for other commodities. First, many people needing care are unable or unwilling to act as well informed consumers who can 'shop around'. In practice then, the purchaser of care is often someone else, either a family member or a local authority, whose interests may not wholly coincide with that of the care recipient. For example, under the proposed legislation on social care, a person who qualifies for LA support can insist on being supported at home, but cannot choose to go into residential care sooner than their social worker decides it is necessary. While many studies demonstrate that most older people want to live at home as long as possible, the consultation exercise conducted by the Department of Health in preparation for the White Paper on Health and Social Care revealed some who would prefer residential care to living in increasing isolation and apprehension in their own homes, even if they could still ‘manage’ on their own (DH, 2006). Further, purchasers who are not direct consumers do not necessarily have the direct experience of the quality of care required to make informed choices. This is particularly true if the recipient has difficulty articulating their needs, as a child or some people with disabilities may have. 

Second, quality of care is hard to assess and monitor not only for third party care purchasers, but also for direct purchasers in trying to assess alternative providers. Care is a quintessentially 'soft' product whose essential characteristics are not easily measured. It is possible to monitor certain physical or developmental standards in care provision, such as, for example, the number of clients bathed by home helps, or developmental test scores for three year olds. Market driven provision, in its drive for efficiency, will tend to meet these measurable outputs and economise on the less tangible aspects of good care. But these are of the very essence of good care, which in nearly all cases needs to include the development of a warm relationship between producer and consumer; such things are hard to monitor and necessarily tend to fall by the wayside in the pursuit of market-led 'efficiency' (Gilbert, 2002; Stone, 2000). 

Third, providers in the private-for-profit sector will be failing in their duty to share holders if they do not take every opportunity to reduce costs. Lowering costs in ways that affect the quality of care provided but does not show up in current monitoring procedures will be one way to do so. Monitoring standards can be changed in an attempt to prevent this, but they will always run behind existing practice seeking for further ways to reduce costs (that, after all, is the argument for private provision being efficient). Unless all aspects of quality can be monitored, the logic of the market leads to quality reduction in those aspects of quality that cannot. But these, as we have seen, may constitute the very essence of good care. Providing better information to consumers and those who make decisions for consumers about the measurable aspects of care quality may only exacerbate this tendency. Similarly, good information about prices in the absence of reliable information about quality, can lead to a pursuit of 'value for money' that becomes a race to the bottom in terms of quality. 

Given the impossibility of monitoring the quality of all aspects of good care, the most reliable source of quality is for carers to have an intrinsic motivation to provide good care. In the right circumstances, such motivation can arise out of professional pride, notions of public service and/or emotional connection. These may be more difficult to harness for the private-for-profit sector than the not-for-profit and public sectors, with whose missions of public or charitable service, rather than maximising the profits of shareholders, carers might more easily identify.

However, even in these sectors, where there is too much pressure on workers or they feel controlled in such a way that they cannot use their own professional judgement, intrinsic motivation can easily be crowded out. This can also happen through too hierarchical an extrinsic reward structure, particularly one which appears to restrict rather than enhance the autonomy of carers (Ungerson, 2004 and Stone, 2000). For example, home carers’ ability to respond sensitively to their clients’ needs has been diminished through being given a prescribed list of tasks to be done and recorded and through reductions in some cases to as little as 15 minutes, in the time they can spend with a client (the care package). Home carers in the public sector have never been well paid in the UK but they could take pride in their work and most enjoyed a good relationship with their clients, knowing that what they did for them was needed and valued. Turnover rates were low and many did far more than they were paid to do (Hunt, 1968; Sinclair et al., 1990; Social Services Inspectorate, 2002). Knijn (2000) found a similar picture of reduced motivation among home carers in the Netherlands, following increasing dependence on the private-for-profit sector and the resulting ‘rationalisation’ or Taylorisation of working practices (i.e. breaking up a process into its component tasks). In pursuit of cost savings, by destroying the job satisfaction and generous professionalism of a group of workers that came from developing relationships with their clients, turnover rates may have increased, thus undermining those savings as well as the quality of care.

This is not inevitable. Some LA’s have insisted in the contracts they make with agencies supplying home care that clients are provided with a ‘holistic’ service which is responsive to clients’ varying needs. Others, however, specify practices that emphasise health and safety considerations which can be reduced to a ‘tick box’ of tasks (Glendinning, 2006). As more people, including those who would formerly have been treated during longer stays in hospital, are now being cared for in the community, the pressure on home carers to focus excessively on the delivery of medication can be very strong. 

Fourth, for consumer choice to promote high quality, consumers have to be able to change poor quality providers for higher quality ones. But change is not costless where continuity of care is important. There are some younger people with disabilities for whom continuity of care does not figure so strongly, as Ungerson’s study of Direct Payments found (Ungerson, 1999).They wanted an employer/employee relationship which had no history and could be cleanly terminated if it became unsatisfactory. However she found among older people that in many cases, a carer was chosen who was already known to the care receiver, and in a later study including other European countries, the carer was often a relative (Ungerson, 2004). Carers learn how to care for particular people (Waerness, 1987). This tacit knowledge takes time to acquire and cannot instantly be replaced by a carer offering better value for money. We need to understand better the circumstances in which a holistic approach can be encouraged and sustained. 

Finally, there is clear evidence that across all sectors of the care market larger providers are becoming more dominant. Large providers such as the Swiss company USI Group are consolidating their portfolio of nursing and residential care homes, while the 'highly acquisitive' Australian childcare giant ABC Learning Centre is now the second largest private nursery operator in the US, and beginning to get a toehold in the UK and Europe with its Busy Bees portfolio (Laing and Buisson, 2007, pp.165-6). 

A care market of fewer, larger providers presents a challenge to, or in some cases removes, the power councils have as the major purchaser in local residential care markets. This has largely positive implications for the market…but largely negative ones for choice.
(CSCI, 2005, p.80)

The Commission noted that this might explain why the fees paid by councils in many areas had increased sharply in recent years. Meanwhile, more elderly people who want to live in a local and/or smaller home have less choice, because in order to take advantage of some economies of scale most large providers run larger homes (ibid., p.184). It also means that those requiring specialist provision, for example, those with special disabilities needs, will have increasing difficulty in finding a home which suits them. These same trends were observed in the US private market in the 1980s (Walker, 1995).

There are, therefore, a number of reasons why provision of care by the private sector, if regulated only by the market, does not reliably guarantee choice, and in so far as it brings about 'value for money', savings may be at the expense of the essential characteristics of good care. In other words, there are inherent reasons why market provision is likely to deliver poor quality care. Gordon Brown recognised this when he questioned the desirability of treating health care provision as a commodity to be left to the market:

Not only is the consumer not sovereign but a free market in health care will not produce the most efficient price for its services or a fair deal for the community.
(Cited by Needham, 2003, p.30) 

The same applies a fortiori to an insufficiently regulated market in social care.
4.4	Direct payments
Giving care recipients direct payments of money to purchase their own care on the market, or individual budgets which they can choose how to spend (even if the local authority then administers that budget), are innovations that are supposed to overcome some of the problems of publicly provided services that are insensitive to individual needs, by giving care recipients choice and the market power to make their own decisions as to how and by whom their care should be provided.

In the UK, means-tested direct payments were introduced in 1997 in response to the Independent Living Movement and other pressure groups representing adults with disabilities who wanted to arrange and purchase the services they needed for themselves, rather than relying on what their local authority was willing and able to provide or commission. Direct payments were subsequently extended to older people and then to carers, to parents of disabled children and to 16 and 17 year olds with disabilities and are no longer confined to those with long term needs. Direct payments have been slow in developing in the UK, particularly among older people. In 2006, only 2 per cent of the 650,000 older people eligible for direct payments were receiving them. In common with experiences in other countries, it is the younger and adult disabled who are the most interested in, and willing to manage, their own care (Lundsgaard, 2005, p.32).

The government wants direct payments to be used more widely, so Local Authorities approached by those needing domiciliary care are now required to offer a direct payment before offering to arrange a service. The government particularly wants to encourage those needing support to purchase it in the market and only exceptionally can such payments be used to pay co-resident close relatives (White Paper on Health and Social Care, 2006). Individual budgets were also introduced in 2005 on a pilot basis. Covering a broader range of needs and allowing users to take them in the form of services or cash or a mix of both, they do not necessarily involve the same responsibilities as direct payments. 

Studies in the UK and in countries where they have been used more extensively over a longer period show that Direct Payments are being used successfully in many cases as a mechanism to enhance choice and to empower adults needing care (Lundsgaard, 2005; Glendinning, 2006). There is much that policy makers in the UK could learn from other countries’ experience of direct payments, especially in relation to the inclusion of informal carers, which is more usual elsewhere.

The advantages include:

•	Payments for informal care can be a way of curbing the growing costs of long-term care. For example in Germany in 2001, three-quarters of domiciliary care users took the option of a cash payment even though it was worth half the value of services in kind (Glendinning and Kemp, 2006, p.236). Typically, informal carers do considerably more than they are paid to do.
•	The inclusion of co-resident informal carers within direct payment schemes can be one of the main reasons for the popularity of such schemes.
•	Where there is a shortage of professional care workers, giving older people the ability to pay informal carers expands the available human resources.
•	Payment may be important in sustaining care (see p.38 above).

Disadvantages include:

•	Issues of quality control over the care provided, which can be addressed by training, advice etc. Nevertheless, how can a poorly performing relative be disciplined or even sacked?
•	The carer’s dependence on the discretion and good will of the care receiver - or vice versa - may complicate relationships which are already difficult and unequal. The dignity and autonomy of the carer may be eroded.
•	Widespread use of informal carers may substitute for the development and growth of formal social care services, as evidence suggests has happened in Austria (Glendinning and Kemp, 2006). This will reduce the choices of both the care givers and care receivers and may restrict the ability of carers to combine care with paid employment. 
•	Depending on their level and interaction with other benefits, direct payments may also act as a disincentive to carers taking up paid work in the formal labour market.
•	If working conditions for those employed by direct payments are only lightly regulated, the social rights of care workers and their ability to bargain for better conditions may be eroded.

In her comparative study of ‘cash-for-care’ schemes in five European countries including the UK, Ungerson found two major variants in the rules and regulatory framework which significantly determined the outcomes of cash-for-care schemes. One was whether or not the payment of relatives is permitted. The other was the framework for enforcing the social rights of care workers and regulating the type of worker that could be employed by the care user (Ungerson, 2004, p.210). 

The proposed expansion of the direct payment scheme in the UK appears to offer minimal regulation of the employment of personal carers. Responsibility for and the cost of criminal record checks, and the payment of minimum wages and national insurance contributions, are to be left to the individual receiving the direct payment. Ungerson’s study (ibid.) shows how this responsibility can be shared with the state in ways which reduce the opportunities for exploitation. While childcare workers such as nannies and childminders are being brought more firmly into the formal labour market by requirements to register, there is a danger that lighter regulation in the adult care sector is moving in the opposite direction. Experience in the US shows that little or no regulation may result in the state funded expansion of a ‘grey economy’ of care and domestic workers, with heavy dependence on immigrant workers (Gilbert, 2002).

4.5	The demand for subsidised care
In so far as consumers are not willing or able to pay the rising costs of care, state subsidies will increasingly be necessary. It is for this reason that the government recognises that many people may need subsidised care, both through direct payments for social care and through tax credits for low to middle income parents to help them with the cost of childcare. The need for subsidised care follows from the high levels of (uncorrelated) inequality in both care needs and in the financial resources to meet those needs. 

It was with these mothers in mind that the childcare element of the Working Tax Credit was introduced. The childcare element of WTC reduces the eligible cost of childcare by 80 per cent, up to a maximum level of £175 per week for one child and £300 per week for two or more children (with no more for a third or subsequent child). In December 2006, 396,000 families claiming WTC received the childcare element, a rise of 11 per cent on the previous year, but still less than half of all families receiving WTC. However, because WTC payments are means-tested, the current average award is £49.80 a week, which is only about a third of the average amount paid by parents for childcare. Not surprisingly, a third of parents not in employment conclude that childcare is not affordable (even if they are eligible for WTC). Moreover, particularly for lone parents and those living in locations where childcare costs are above average, the gains from moving into paid employment can be small if earnings are little more than the minimum wage.

However, the implications for future trends in costs have not been so well recognised. Unless there were to be a sustained decrease in inequality, the cost of those subsidies must grow alongside the rising costs of care, whether those subsidies are provided to parents, through WTC, or to providers. The government tends to propose one–off restructuring funds, such as its Challenge Fund for childcare, to deal with problems that are inherently long-standing issues that, as we have seen, will need continual subsidies that rise, not fall, in value. Similarly, the belief that in areas where care provision is inadequate, start-up grants can help providers to become self-sustaining is based on a mistaken premise. If provision previously would have been unprofitable, often because local incomes are not high enough to pay sufficient fees given current levels of parental subsidy, then there is no reason, without a decrease in income inequality, to believe that this will be rectified without continued subsidy. On present trends such a decrease in inequality looks unlikely.

Further, the demand for subsidised care is likely only to increase. Those caring for others unpaid will increasingly feel that they cannot afford to stay out of the workforce as the purchasing power of the wages they could earn rises, through productivity increases. Increasing numbers of unpaid carers will therefore seek to enter employment. However, as we have seen, the same process of rising productivity elsewhere in the economy will increase the costs of paid care. So while unpaid carers will become more aware of what they are losing through not being in employment, the full cost of their replacement care would take a similar proportion of any wages they could earn. Those that would have needed subsidised care to make employment affordable will continue to require it. 

That the level of subsidy has a direct effect on mothers’ employment rate was confirmed by the findings of a comparative study of child poverty: 

The greater the cost of childcare services relative to the mothers’ wage potential, the less likely it is that she will seek full-time employment. This is one explanation why employment rates among low skilled women vary strongly between industrialised nations, while the employment rate among high skilled women vary less and why the gap between both groups increases when they have to take care of young children. Therefore it is important to introduce or expand public (support for) children’s services, aimed at reducing the direct cost of these services, as well as subsidies, such as refundable childcare tax credits, which would (partially) compensate low-income families’ expenditure for this type of service. 
(Vleminckx and Smeeding, 1998, p.535)

The cost of being a mother, and the gender pay gap, therefore varies more by the level of education of the mother in the UK than in most other countries where childcare is more heavily subsidised. As we have seen, highly skilled women are less likely to interrupt their careers to have children than less well educated women who, because the cost of childcare leaves them with little net gain from employment, take more time out of the labour market (and relatedly, may live in a culture in which non-maternal childcare is less accepted). However, the later trajectory has a far higher life-time cost in terms of future employment prospects and earnings (Rake, 2000; Joshi and Davies, 2000).

This is why the UK government subsidies to childcare are targeted on lower income parents. However, providing these subsidies through the Working Tax Credit means the subsidy is means tested on household income, rather than on the wage with which the cost of childcare will be compared, in practice almost invariably the mother's. Although this encourages lone parents, and possibly mothers whose partners are not in employment, to seek employment, researchers from the Institute for Fiscal Studies have shown that the high marginal tax rate second earners face tends to discourage mothers with an employed partner from entering the labour force (Brewer at al., 2006).

Alternatively, providers of care can be subsidised directly for those on low wages. (Community childcare providers in Australia in the early ‘90s received such a subsidy dependent on the number of low-income families they served, and a version of this for after school places is now being proposed for the UK by the Daycare Trust (2006).) User fees can be subsidised, according to means, within a system of universal public or private provision for child and adult care. For example, all child care places in Sweden are subsidised with a maximum fee level set well below the actual cost of a place. This benefits parents and children in all income groups to some extent, attracting widespread support, and having the advantage of providing a similar standard of care to all, whatever their income and ability and allowing people of different backgrounds to mix. This stands in sharp contrast to a system in which the fees that parents pay determines the quality of the childcare their children receive, and which other children they meet.

As the latest DfES survey of childcare found (Bryson et al., 2006), the cost of childcare has remained an important issue for many parents, despite the existence of subsidies through WTC. The Daycare Trust’s 2006 survey found that the price of a typical full time nursery place for a two year old in England had increased by 27 per cent in 5 years (Daycare Trust, 2006, p.21). The average weekly cost of childcare for one child now represents a third of average full time earnings and two thirds of the earnings of a full time worker on the national minimum wage, which is what many mothers earn. As Table 5 shows, the cost of childcare has tracked that of the national minimum wage. This is because a high proportion of childcare workers earn the minimum wage, though this would change if training standards improve. This confirms the point made earlier (p.44) that the costs of childcare must rise in line with earnings, since productivity cannot be expected to increase without reducing quality.

Table 5	Weekly cost of nursery place for a child under 2 in England 			compared with average earnings and NMW levels for
		years 2001-2006

	Typical weekly nursery cost for child under 2 	Inflation (CPI) %	Average weekly earnings (£)	Cost of childcare/ average earnings (%)	National Minimum Wage October (£ per hour)	Hours to pay for weekly childcare at NMW pay	
2001	110	1.2	376	0.29	4.1	26.8	
2002	120	1.3	391	0.31	4.2	28.6	
2003	128	1.4	404	0.32	4.5	28.4	
2004	134	1.3	419	0.32	4.85	27.6	
2005	141	2.1	431	0.33	5.05	27.9	
2006	144	3	447	0.32	5.35	26.9	

Source: DaycareTrust, 2006. 

Looking at this from the point of view of the economy as a whole, unless standards in caring fall because less time overall (paid and unpaid) is devoted to care, the continued entry of mothers and unpaid carers into employment will, as we have seen, require the proportion of GDP spent on care activities to rise, and rise faster if standards are to improve or if the number of people needing care increases. But, as we have also seen, if policy is to work in encouraging into employment those who had previously found replacement care unaffordable, an increasing proportion of that total spending on care will need to be subsidised. 

This means that the total cost of subsidies to care, in whatever form, will rise faster than GDP. However, the same increased productivity elsewhere in the economy that raises real wages to make paid employment more attractive, thus fuelling the demand for subsidised care, also raises national income. While public expenditure and, therefore, tax rates would need to rise to fund increased spending on care, this would, in practice, be comparatively easily affordable since disposable incomes would still rise.

5	POLICY IMPLICATIONS
5.1	Introduction
There are gender differences in caring behaviour, ones which past policies have reinforced rather than diminished. A caring strategy for the twenty-first century cannot, therefore, be gender blind. Rather it involves the development of policies which will reduce and remove existing gender discrimination. This involves:

•	valuing care and those who give it, whether paid or unpaid, more highly;
•	removing the economic disadvantages suffered by those to whom current gender norms allocate greater caring responsibilities;
•	challenging those gender norms to share caring responsibilities more equally between men and women;
•	mainstreaming ‘care’ in public policies, including transport and planning, so that the autonomy of children and adults needing care is increased and carers assisted. 

Formal care will never completely replace, and for the vast majority not exceed, the care provided by family and friends. To ensure care of sufficient quantity and quality is forthcoming without unfairly disadvantaging carers and thus perpetuating current gender inequalities requires movement towards a society based on a model of worker/carer citizens, in which nearly all adult members of society are expected to contribute to both caring and paid employment, but no-one is forced to give care to particular people for lack of an acceptable alternative.

To do this will require policies that impact on men’s lives as much as, if not more than, women’s. In particular, with respect to children, policies are needed that not only facilitate and encourage working motherhood but are equally focused on facilitating and encouraging caring fatherhood. Men need help and encouragement to play an equal role with women in the care of adults, particularly before they reach retirement age.

For such strategies to be effective in reducing gender inequalities and in improving the lives of those needing care, there must also be a good range of affordable and accessible high quality care services available for all who need them. This requires, inter alia, that the status, training and remuneration of the paid care workforce be improved.

Since most paid carers (of both children and adults) are women and care workers form a substantial proportion of the female workforce, raising the status and pay of care work would be a highly significant contribution to closing the gender pay gap, which in the UK is the highest in Europe.
5.2	Labour market conditions for combining care with employment
Facilitating caring fatherhood and enabling men to be carers will require reform of the labour market. In particular, workers need to be able to work hours that are compatible with sharing caring responsibilities and men need to be encouraged to take the same amount of leave that women do. This would require proper implementation of maximum working hours, combined with statutory parental leave and caring leave available in a non-gendered form as an individual right, able to be taken flexibly, paid at a rate that does not discourage take-up. It would also require a change in workplace culture so that caring responsibilities become seen to be as important as those of employment. Men with a high public profile, such as politicians, could take a lead in endorsing this change in gender roles by, for example, taking all the paternity and parental leave to which they are entitled.

Making employment hours more compatible with caring responsibilities requires challenging the UK’s ‘long hours’ culture. Strengthening the right to flexible working in various ways can help do this, by tightening the conditions under which requests can be refused, ensuring that workers have a right to return to previous conditions of employment and enabling requests to be made whenever needed. These last two are particularly important for carers of adults for whom future needs are more unpredictable. If the right to flexible working were extended to all workers and employers were required to have systems in place to deal with such requests in flexible and imaginative ways, those needing to work flexibly because of caring responsibilities would not suffer labour market disadvantage as a result. Extending discrimination legislation to cover discrimination against those who have taken time out on statutory leave or made requests for flexible working would help entrench these rights, and should both encourage men to take on caring responsibilities and ensure that neither sex suffers disadvantages as a result of so doing.

Improved rights to statutory leave and flexible working would help women progress in the labour market. Without sufficient flexibility from employers, women may leave higher skilled jobs and sacrifice their careers to enable them to combine caring with poorly paid employment that is classified as 'unskilled', but whose main characteristic is that it is compatible with their caring responsibilities. Flexibility from employers, both their own and those of husbands and partners with whom they might share caring, would enable women to stay in better jobs, utilising their skills, benefiting themselves and contributing to their household income and to the economy.

Women often have lower pay than men, and so financial pressures on households reinforce gender norms to make women more likely than men to sacrifice their careers in this way. This is turn leads to women having poorer employment prospects than men, reinforcing inequalities within the family. In order to break this cycle, women need less frequently to be put in a position in which they have to choose between employment and a member of their family being well cared for. The provision of high quality care services which are both affordable and accessible is needed to reduce these dilemmas. 
5.3	The provision of care
An unregulated market, that for other commodities may ensure the most efficient supply of appropriate quality, will not be able to achieve this for care. This is because efficiency savings in care can only be achieved by reducing staff-client ratios or the pay of the workforce, yet the quality of care provided is directly related to the number and quality of care workers. Increased 'value for money' in care cannot in general be achieved without reducing its quality. With insufficient regulation, competition results in declining standards in the private sector and, if private sector providers are allowed to use competition law to challenge public sector subsidies, in the public sector too.

The current direction of policy supporting the development of a private sector in care by demand side subsidies and the application of competition law, is therefore unlikely to lead to sustainable high quality care overall. The private sector in adult care services has almost replaced the services which twenty years ago were provided directly by the public sector. A significant minority of social care providers are failing to meet some of the key minimum standards set by government. On many of the criteria used by CSCI to measure care standards, the not-for profit sector does better than either the private or the now depleted public sector. 

If local authorities were not required to purchase services from the private sector, public sector and not-for profit provision could have an important contribution to make in setting standards in the provision of high quality and sustainable public caring services which are more responsive to clients' needs and wishes. However, the mere existence of high quality public sector provision would not be effective in raising the quality of private sector provision unless all care recipients (and parents) had a right to opt for direct local authority provision.
5.4	The childcare and social care workforces
Both the childcare and social care workforces are currently badly paid and poorly qualified. Private sector providers are understandably reluctant to invest in staff training where turnover rates are high and particularly where, as in early years education, qualified staff tend to seek the better employment conditions of the public sector. In social care, providers argue that the fees which LAs pay on behalf of 70 per cent of their clients are too low to include more than minimal training. While pay is low and there is little career progression in either the domiciliary or residential care sector, care workers cannot be expected to invest in their own training. To improve standards, public training funds will need to be available in the longer term for training both the childcare and the social care workforce. The government is addressing this more vigorously in the case of the child care workforce, but sees it as a short term problem and so far has only committed funds for two years. 

Poor training and employment conditions in social care and in child care reflect the historical distinctions and divisions between health and social care workers and between education and childcare workers. Policies and practices are needed which reduce these distinctions if better standards in social care and in child care are to be achieved.

Migrants, both from within and beyond the EU, are likely to be an increasingly significant minority in the paid care workforces. Unless the skills such migrants bring with them are fully recognised and they are paid accordingly (and the conditions under which they are allowed to stay in the UK do not limit this), then the employment of migrants will undermine pay and conditions for all care workers. To avoid this, policies should not discriminate against migrants in relation to access to benefits, freedom to change employers and support in acquiring further qualifications. Otherwise the increasing reliance on migrant labour may become an alternative to developing an appropriately rewarded, well-qualified and skilled social care workforce.

Without these improvements in the childcare and social care workforces, the care sector will remain a female ghetto, characterised by poor conditions for both paid carers and those for whom they care. The planning and evaluation of policy, and the monitoring of progress in achieving goals, would be improved if all but the smallest private providers were required to produce annual returns on the state of their workforce. The government has begun to regulate the employment of childcare workers in private homes. As Direct Payments are used more extensively, similar regulation of the working conditions of personal care assistants will be needed to protect both employees and employers, since the latter will be subject to less public scrutiny, but also have greatly reduced bargaining power in the care market than large private or public sector employers. 
5.5	Public responsibility for care
When care is accepted as a public good of benefit to society in its own right, then policy has a role in addressing the current problems facing care (described by some as ‘crises’) and in promoting good care. Government then becomes an essential partner in providing the resources to ensure that everyone needing care is well looked after, just as it is in the provision of primary and secondary education and of medical care. This means seeing state provision as being more than a back-up when family resources or willingness to care fail. As a public good, care will in general be underprovided or of lower quality than is socially optimal if parents and those needing care have to pay the full costs of their own or their children’s care (since they will in general be willing to pay only for its private benefits). That is one reason why in most European countries care is, at least in part, funded by the state. 

Such an approach is different from that of the UK government, which often uses public policy on care as a means to achieving something else, such as higher employment levels or saving money on expensive health care. Current employment and social policies too often overlook or take for granted the care older people provide for their grandchildren as well as the care they provide for each other and the generation above them. This is because such unpaid care is not seen as a cost to society, if it does not impact on those other policy objectives. But such care is not free, rather it is paid for by the carer herself and may become less available as retirement ages are set to rise. Instead, policies based on a sense of social solidarity are needed which acknowledge and facilitate the care that flows up and down between three and even four generations, both within families and within the wider society.
5.6	Funding 
As Wanless stated; "funding remains at the heart of the problem". By spending only close to the OECD average, the UK spends a smaller proportion of GDP on public funding for childcare and for social care for adults than many other countries of comparable wealth. The government has begun to spend more on childcare services but has yet to find the resources needed for the growing number of disabled and frail elderly people. As a public good, it is neither efficient nor fair for individuals to be expected to fund their own or their children’s care in full. A new pact between families and the state is indeed needed, but it is just as unrealistic for the government to expect families to do more and more as it is for families to assume more care can be provided without cost. Public expenditure on care will have to rise just to maintain current standards. The policy question is how funding for and the provision of care is to be shared between the state, employers and individuals and their families in future.

Many other countries include universal entitlement to care provision based on need in the protection covered by their welfare state. Some are insurance based and others are tax based. The Wanless report in 2006 also advocated universal entitlements but required some contribution or ‘co-payments’ from those using the services. Insurance based schemes take time to mature so to meet the immediate need for domiciliary and residential care will require funding from taxation to produce ‘a framework that gives older people a level of security that is elusive in today’s funding jungle’ (Kelly, 2007, p.33).

There are a number of different options for raising taxation that could be fairer than present benefit rules that impact harshly on those needing long-term care. For example, home owners who need residential or other care may feel badly that their children will be deprived of their inheritance if they have to use up all the capital in their house, through no fault of their own, to fund that care. A reformed inheritance tax could be argued to be a fairer way to increase funding in order to provide free personal care, since contributions would be levied according to the size of an estate rather than just on those people unlucky enough to need long term care (Wilby, 2007).

In addition, local authorities could be allowed more control in raising their own revenues. In order for this not to produce resentment a fairer system of local taxation would be needed in which contributions were better related to ability to pay. Such local taxation would be additional to funding from central government which would still be required to balance out inequalities in care needs between areas, which are considerable and insufficiently recognised in the current allocation of resources.

Any of these ways of funding care would require adjustment to HM Treasury's ‘Golden Rule’, that over the economic cycle the government will borrow only to invest, to recognise that spending on caring services for children, like much of health and education expenditure, is a form of investment in human capital. Adjusting the Golden Rule to categorise more accurately spending that is investment for the benefit of future citizens, would help rectify the distortion that results in underinvestment in childcare.

If the aim of policy on care is to improve the lives of those needing care and enable men and women to share more equally in caring and employment opportunities, funding has to be sufficient for the care provided to be of a high quality. This will require pay and conditions of employment within paid care to improve. Because of recruitment and retention problems within the care workforce, such improvements may be necessary, though to a lesser extent, even if policy on care only has other aims, for example, to increase the employment rate of women and older carers for example. Raising standards of care would almost certainly require even greater increases in funding. Either way an increasing proportion of GDP will, therefore, have to be devoted to care. An even higher proportion will be needed if the numbers of people needing care increase.

To ensure care is provided for all who need it will require a combination of unpaid care and, as more unpaid carers enter employment, increasing amounts of paid care. Unless there is a reduction in inequality, an increasing proportion of that care will need to be subsidised, and its cost will rise more than proportionately because of rising care costs. This means that the cost of public subsidies for caring, in whatever form, will rise faster than GDP, an increasing proportion of which will have to be spent on care. However, because the same forces that lead to care costs rising (productivity increases elsewhere in the economy) raise national income, disposable incomes could still rise even though higher tax rates would inevitably need to be levied to fund increased spending on care.

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