Tories make free childcare and apprentices priority to boost jobs

The Conservative government's decision to make free childcare and apprenticeships a priority in this parliament reflects its determination to push Britain's employment rate to fresh highs during its second term.

The Tories see Britain's "jobs miracle" as one of their biggest successes and they want to repeat the feat by creating another 2m jobs by 2020, which would increase the employment rate from a record 73.4 per cent to 76.6 per cent, the highest in the G7 group of rich countries.

It is an ambitious aim: the Office for Budget Responsibility, the official fiscal watchdog, forecasts employment will rise just half as fast as the Tories hope. Economists say they would be surprised if the Tories succeeded - although they admit they were confounded by the jobs boom of the past five years too.

Vicky Redwood, an economist at Capital Economics, said the government's £350m plan to double free childcare for 3- and 4-year olds to 30 hours a week should help boost employment rates by enabling more parents - especially women - return to work.

The female employment rate has been rising for decades in the UK and at 67.2 per cent it is already higher than in the US and Japan. But it is still lower than in Germany, Canada and the Nordic countries, suggesting there is room for further growth.

"Fifteen hours is probably not really enough for someone to do even a decent part-time job, whereas 30 hours is, so it could have a disproportionate effect in supporting women who want to go back to work," Ms Redwood said.

Industry groups and charities said the new policy would not fix all the problems associated with childcare, such as a lack of availability. Indeed, the Pre-school Learning Alliance, which represents 14,000 childcare providers, warned it could make matters worse.

Neil Leitch, the PLA's chief executive, said the current 15 hours of free childcare were "grossly underfunded to the sum of around £206m" which meant 50 per cent of providers either broke even or made a loss.

"What's going to happen if you then move at the same pace and attach an additional 15 hours? It's just going to exacerbate the problem," he said. A Number 10 spokesman said the government would work with providers to make sure they were given adequate support.

The CBI business lobby group said increasing free childcare was "important" for employers, but added that it would like to see 15 free hours for one- and two-year-olds, to close the gap that exists between the end of maternity leave and the start of free childcare for three- and four-year-olds.

The Conservatives have also promised to create 3m more apprenticeships in the next five years to try to address the UK's skills gaps. One of their challenges will be to change the way they are funded to put more responsibility in the hands of employers. The CBI said it was "right to set ambitious targets" but warned employers required more control and the government should co-ordinate with them better to "ensure apprenticeships are routes to good careers."

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