Thursday, July 27, 2017

Labour corrected themselves on childcare costs. But even the correction is wrong.

Jeremy Corbyn issued the following tweet today: “As school holidays start today, many will struggle to meet childcare costs, which have doubled under @conservatives.”

By -25 JUL 2017

But data released from his own party this morning contradicted that. According to their press office, “Labour analysis shows that, across Britain as a whole, the average weekly cost of childcare has risen by over 50 per cent from 2010 to 2017.”

Obviously, Corbyn’s use of the word “doubled” implies a rise of 100 per cent, not the “over 50 per cent” claimed by Labour’s press team.

FactCheck contacted the party to ask why there was a discrepancy between the two figures, and whether Mr Corbyn was basing his claim on a separate data source.

We later spoke to a representative from Mr Corbyn’s team, who admitted that the original tweet was a mistake and had been deleted after our initial enquiry.

Mr Corbyn has since tweeted: “The @conservatives are failing to support working parents, whose holiday childcare costs have shot up by 50% as their wages have fallen.”

But we don’t think even that claim passes the FactCheck test.

Has the cost of holiday childcare gone up by 50 per cent under the Tories?

Labour’s claim relates to the cost of holiday childcare, which is typically more expensive than term time care. Labour points to two Family and Childcare Trust (FCT) Surveys on holiday childcare: one from 2010 and one from 2017.

The party says that childcare costs rose from £82.40 in 2010 to £124.23 per week in 2017 (i.e., by 51 per cent).

But the two figures are not directly comparable.
The 2010 figure represents the average cost of childcare provided by local authorities, whereas the 2017 figure is a “weighted average” that takes into account the cost of private sector childcare as well.

In other words, Labour’s claim that childcare costs have gone up by 50 per cent since 2010 is not based on like-for-like comparison.

So what happens when we do compare like-for-like figures?

The gross cost of local authority child care is up 28 per cent.

FCT figures show that in 2010, the average cost of local authority-provided childcare was £82.80 per week. By 2017, that rose to £105.45. In cash terms, that’s an extra £23.05 a week. In percentage terms, that’s a 28 per cent rise (that’s a gross figure – i.e. not accounting for inflation).
The gross cost of private child care is up 24 per cent.

FCT data shows that the average cost of private childcare was £103.55 a week in 2010. That rose to £128.70 in 2017. A cash rise of £25.15 a week, and a 24 per cent rise (again, not adjusted for inflation).

What about the weighted average?

Labour cited the weighted average that the FCT use in their 2017 report on holiday childcare costs in order to demonstrate a 50 per cent rise in costs. However, the FCT didn’t calculate a weighted average in 2010, so we can’t compare figures for this over time.

What about  inflation?

And there’s another problem: Labour haven’t accounted for inflation.

We get a more accurate picture of how prices really change when we adjust for inflation. In fact, that’s what Labour do elsewhere in their press release, when they talk about how wages have only risen slightly in real terms since 2010.

There are various ways to adjust for inflation over time. We used the Bank of England’s calculator and compared prices between 2010 and 2016 to reach our estimates, which are set out in the table below.

Accounting for inflation, we estimate that the cost of local authority childcare has gone up by 8.8 per cent since 2010, and the cost of private childcare has gone up by 5.6 per cent.

These figures are significantly lower than those put forward by Labour today.

FactCheck verdict

Jeremy Corbyn had a minor mistweet this morning. He said that holiday childcare costs had doubled under the Tories, but his own party said that they had gone up by 50 per cent. Labour retracted the tweet when they realised their mistake.

However, we’ve found that the 50 per cent figure doesn’t stack up either, because it’s not comparing like-for-like data.

When we look at directly-comparable statistics, and account for inflation, we can see that holiday childcare costs have actually risen by between 5.6 per cent and 8.8 per cent in real terms since 2010.