The Lure of the Designer

Or; Why we broke childcare and how to fix it

In 1802, a philosopher at Christ’s College in Cambridge, William Paley, advanced the argument that the complexity of the natural world necessitates the existence of a designer. If one found a watch in a field, he argued, one would have no choice but to conclude that such a complex device had not appeared by chance, but was the work of some conscious and skilled watchmaker. If so with a watch, how much more so with such complexity as is found in the natural world - animals, plants, the human eye and the complex interlocking array of physical laws. Such things could only have come about by means of a skilled designer - in otherwords, God.

Fifty-seven years later, an alumnus of that same college, Charles Darwin, would publish the ultimate rebuke to that argument, in his landmark book, On the Origin of Species by Means of Natural Selection. For the first time, there was a credible mechanism whereby the diversity of life on earth could have come about without a designer¹. Over the last hundred and fifty years, the theory has been expanded and elaborated upon, but held firm, as new discoveries such as genetics, mitochondrial DNA and more have come to light.

But here’s the thing. As someone² once said, prior to Darwin, accepting Paley’s argument wasn’t the irrational approach, but the rational one. Without any plausible natural mechanism to explain the diverse complexity of life, the Watchmaker argument was better than most of the alternatives.

Nowadays, we have found the (many) missing links between reptiles and birds, fish and amphibians, and weird hyena-ish things³ and whales, as well as filling in much of our own family tree. The curious can see speciation in the fossil record, with their own eyes, at the Sedgwick Museum⁴, or read popular descriptions of how it works in umpteen different books, including Dawkins’ classics, The Selfish Gene, The Blind Watchmaker⁵, and others.

We all now know how the eye evolved⁶. But complexity is a powerful drug. Biology can always take you deeper. One friend of mine, on their journey towards Christianity, talked of how they would look at the complexity in a human cell, or things such as the molecular pathway of photosynthesis, and wonder how such things could have arisen by chance alone?

The lure of the designer remains strong.

Molecular pathway of C3 Photosynthesis, ResearchGate

“Who is in charge of the food supply for London?”

An oft-repeated tale tells of a Soviet official coming to London and asking, with amazement, who is reponsible for ensuring its inhabitants receive food.

The incident is, sadly, almost certainly apocryphal. I was told it on an economics course over two decades ago, using the wording above. I’ve since seen it attributed to ‘a top Gorbachev aide’, by various people, including Yuval Noah Harari in his book Homo Deus, where he gives the precise words as “Why does London have no queues for bread?Back in Moscow, our finest minds are working on the bread supply system, and yet there are such long queues in every bakery and grocery store. Please take me to meet the person in charge of supplying bread to London. I must learn his secret.” The US economist Thomas Sowell attributes it to Gorbachev himself⁷, asking Thatcher, "How do you manage to get people to have food?"

Though this incident may be fictional, it may be based upon something that is much better attested: Boris Yeltzin’s visit to a grocery store in Clear Lake, Texas in 1989. This is well documented, and it is reported that he marvelled at the choice available, saying, "Even the Politburo doesn't have this choice. Not even Mr. Gorbachev," - and even speculating it was a Potemkin store set up just to show him around. In his own autobiography he wrote:

"When I saw those shelves crammed with hundreds, thousands of cans, cartons and goods of every possible sort, for the first time I felt quite frankly sick with despair for the Soviet people. That such a potentially super-rich country as ours has been brought to a state of such poverty! It is terrible to think of it."

In his obituary, the New York Times cited Leon Aron, a biographer of Yeltzin, who wrote:

“For a long time, on the plane to Miami, he sat motionless, his head in his hands. ‘What have they done to our poor people?’ he said after a long silence.” He added, “On his return to Moscow, Yeltsin would confess the pain he had felt after the Houston excursion: the ‘pain for all of us, for our country so rich, so talented and so exhausted by incessant experiments.’ ”

He wrote that Mr. Yeltsin added, “I think we have committed a crime against our people by making their standard of living so incomparably lower than that of the Americans.” An aide, Lev Sukhanov was reported to have said that it was at that moment that “the last vestige of Bolshevism collapsed” inside his boss.

New York Times, 2007

In the planned economy of the USSR - and the other communist nations of the Warsaw Pact - someone was responsible for the food supply. Centralised planners were responsible for setting prices, quotas and targets; determining who grew what and how much could be sold, when, and at what price.

The result was empty shelves, queues and shortages. The grain dole may have worked for Rome, but a modern, high-tech economy is simply too complex to run effectively on central planning - even with the best and most pure-hearted planners imaginable, which the Soviet planners were not⁸.

One can understand the temptation. Food is so important, after all. How can something so vital for life be left to the vagaries of the market? Yet in the words that Sowell attributes to Margaret Thatcher, “The prices took care of that. The British people were better fed than the Soviet Union, despite the fact that the British had not produced enough food to survive for more than a century. The prices brought them food from other countries.”

Or, as Adam Smith put it, “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest.”

And yet, the lure of the designer is strong.

Why we broke childcare - and how to fix it

Around thirty years ago, Government began to take a greater interest in childcare. There were a number of good reasons for this. More women were entering the workplace, meaning more families needed childcare. In turn, many of those women - and some men - believed that more affordable childcare would help other women return to the workplace and progress, reducing sex-disparities in pay and seniority. The appalling Victoria Climbie abuse scandal ushered in widespread changes to child protection, many of which impacted childcare. And with a concern from both parties on educational gaps, it was recognised that, for some children from disadvantaged backgrounds, pre-school childcare could be a key tool in closing those gaps.

So the eyes of the state turned their attention upon it. The lure of the designer is strong.

One of the first initiatives was John Major’s childcare vouchers, announced in 1996. Under New Labour we received tax-free childcare allowances, and later expanded by the Coalition into ‘15 hours of free childcare’, and then expanded further to 30 hours for 3-4 year olds, and down the age range to provide 15 hours for 9 months to 2 year olds. As of this year, it is forecast that the state will be paying for 80% of pre-school childcare provision in England.

Since 2000, a large number of safeguarding rules were imposed, many broadly sensible but some less so⁹. Tight ratios were introduced, setting out how many children could be looked after by each adult. And to ensure those educational gaps closed, an extensive curriculum was extended and imposed upon not just nurseries, but childminders, with Ofsted mandated to inspect them - with childcare providers responsible for all of the paperwork and record-keeping that goes with it. Long gone are the days when you could simply drop your child off with a childminder you could trust.

Every step of this journey has been logical, well-intentioned, plausible and popular. But what has been the result?

Childcare has become less affordable and available than ever. Over the last decade, we've driven half of childminders out of business through increasingly onerous inspections and regulation. Only half of local authority areas say they have sufficient places for children under 2 who need them, and only 48% enough places for parents working full time, steady year-on-year reductions. Costs have consistently risen above inflation. The UK has the third most expensive childcare in the OECD - despite spending an above-average level of state subsidy upon it. Since 2010, childcare costs have increased by 80%, compared to overall inflation of just 50% - again, despite increasing subsidies.

The lure of the designer is strong.

And what of parents? Speak to almost any parent, read any newspaper - whether right- or left-leaning - and you will find dissatisfaction with the cost and availability of childcare. Articles such as this, and this, and this, from the BBC alone, proliferate.

Perhaps the gold-standard evidence comes from the Department for Education’s Childcare and Early Years Survey of parents. This found that:

• 64% of working mothers¹⁰ aged 0-4 wished they could afford to work fewer hours to spend more time with their children.

• This includes 35% of working mothers aged 0-4 who wished they could give up work entirely; BUT

• 54% of non-working mothers aged 0-4 would like to start work, if only they had affordable childcare.

The system isn’t delivering for either those who wish to work or those who wish to stay at home¹¹.

The free market may be a great deliverer. But when the state commissions and sets the price for 80% of a market - and tightly controls the conditions and content of 100% of it - one no longer has a functioning market.

One might have thought that a right-leaning Government would have recognised this.

One might have thought that a right-leaning Government, wishing to support parents and/or mothers, might have understood that it would be better to give those people money, trusting individuals to spend it as they felt best, rather than give them a voucher or entitlement that compelled them to spend it on a specific service.

And one might have thought that a right-leaning Government, supposing that it did wish to specifically support childcare to support a return to work and a growth in GDP¹², would have understood that it is best to trust to the market, and the free choices of parents, to determine the type and style of childcare that they wished, and to deliver quality, rather than mandating a standardised approach devised and enforced by the state¹³.

So one might might thought.

The lure of the designer is strong.

So how to fix it? How to unleash the power of the market, the blind watchmaker, to provide the childcare we need and want at the cost we desire it? How to provide genuine choice to families, rather than being forced into the straitjacket of what the Man¹⁴ from the Ministry thinks is best?

Cash benefits

Let’s imagine the Government wanted to support parents of under fives as much as it does now. The simplest solution would be to simply convert the whole system to a cash benefit.

Once the current childcare entitlement is fully rolled out, the Government expects to spend about £8bn a year on it. By comparison, there are 1.57 million children aged between 0 and 4 in England. By abolishing the childcare entitlement, the Government would be able to give every mother of an under 5 year-old a cash grant of just over £5,000, tax free, annually.

There would be numerous advantages to this. The most obvious is simplicity: minimal administration costs, no complexities of entitlement, no complex payment systems to providers.

The second is that it would genuinely support parental choice - rather than the current approach, which greatly privileges one, favoured, lifestyle in which both parents work. Under this system parents would be able to genuinely choose what they would prefer - whether that was using it to help with formal childcare, to support relatives delivering informal childcare, or to help fund staying going back to work later, or for fewer hours.

The third advantage, which may carry particular weight with my left-leaning readers, is that such a system would be massively more progressive than the current system. Under the current system, by design, all of the benefits go to dual-earning households who tend, for obvious reasons, to be higher earning. The Institute for Fiscal Studies found, with regards to the most recent expansion of childcare¹⁵ that “the poorest third of families will see almost no direct benefit from the new entitlements” and that the announcement would directly benefit “a fifth of families earning less than £20,000 a year and four-fifths of families with household incomes above £45,000.” In contrast, a direct cash transfer would benefit poor and rich alike. Just imagine the transformative effect of an additional £10,000 a year to a single mother to a 1 and 3 year old on minimum wage!

But the fourth, and perhaps the most important, benefit, is that - combined with the changes below - it would get the Government out of purchasing and setting the price for 80% of the childcare market - and allow it to function again. We’ve all heard the stories of nurseries which charge above the odds for extra hours to make up for the ‘free’ hours, or who only allow people to sign up for certain types of arrangements. Not to mention those who’ve been forced out of business entirely. Well, this will only get worse under the new system. There is much less ability to finesse matters when 80% of your hours have their prices set by the state. We all know how this story ends: with scarcity, shortages and rationing.

Strip back the regulation

This could be done as a complement to the above - or as a stand-alone measure, in the event that a government wished to stick with subsidising childcare places explicitly.

Alongside the control of prices, equally pernicious is the mass of regulation - that not only raises costs but forces some providers, particularly childminders, out of business. Governments have tinkered with it but to little avail, but the weight and requirements of it matters more than the details.

The solution, at least for childminders, is simple - strip it all away. Remove from them from the Early Years and Foundation Stage (EYFS) Framework, end Ofsted inspections, get rid of the lot. Keep DBS checks to make sure they’re not paedophiles - just as we do for scoutmasters or football club leaders - but end the rest of it. Let parents decide who they want to leave their children with.

For nurseries, I would suggest doing the same thing. Alternatively, one could allow them to, voluntarily, opt-in to Ofsted inspections and the EYFS, to provide a kite-mark of quality. One might expect that such nurseries would charge more, for those parents who wish it, just as private schools do, but that is those parent’s choice. As with childminders, core safe-guarding requirements such as DBS checks should be retained.

Relax ratios

The most sensitive topic here is staff:children ratios. The last Government made a small tweak to this - shifting England’s ratio for two year olds up by one, to become in line with Scotland. But much more is possible.

Of course, I get that we would all like small ratios, just like we’d all like our children in school to have class sizes of 20 or 22, like they do in private schools. But we can’t afford that, so class sizes in state schools are more like 28 kids. By contrast, in the early years setting, it’s as if we looked at the ideal in the independent sector, mandated it across the whole system - and then wondered why a quarter of kids couldn’t get school places because we’d run out of teachers.

England has some of the tightest ratios of staff:children ratios in Europe: 1:8 for 3 year olds, compared to 1:20 in Belgium, 1:25 in Spain and 1:26 in Italy. Some barbarous countries such as, um, Denmark, Italy¹⁶ and France¹⁷ don’t have ratios at all, simply relying on broader requirements that establishments be safe for children, and to trusting parent’s judgements not to leave their kids in a place swarming with uncontrolled toddlers. Govern outcomes, not inputs - and let parents choose.

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The lure of the designer is strong.

By steadily increasing state control, state prescription, state price control over the childcare market, we’ve driven out supply, driven up costs and priced out parents. By deciding that the state knew best what parents should spend their money on, we’ve failed to satisfy both working parents and those who would stay at home. All the major parties seem to currently have no solution other than to keep digging.

I’m strongly in favour of supporting parents with young children. The falling birthrate¹⁸ is a major concern, with big implications for the future viability of our society. The ‘baby gap’ stands at around 0.9 children, meaning women¹⁹ are having significantly fewer children than they want, which feels like something we should try to do something about. And more broadly, in a redistributive tax system, people paying more when they can, to support families when they are often facing their biggest income crunch - when they have children under 5 - is both good and fair.

But if we want to make a system that works, we need to stop thinking we can design and plan it top-down, any more than than we could manage the food supply to London. Top-down planning creates scarcity, high-prices and shortages - which is exactly what we see in the childcare sector²⁰.

Even if a Government isn’t going to go the whole-hog and switch childcare support to a cash benefit, it needs to get out of the system. Stop dictating the curriculum. Stop fixing ratios. Stop driving childminders out of the profession with paperwork and and Ofsted inspections. Provide vouchers rather than mandating a fixed price. Give whatever support you believe is justified to parents - but then just step back.

And then, perhaps, we can have a childcare system that provides the availability and affordability we need.

1. Various people - not least Darwin’s grandfather - had proposed that creatures evolved before, but Darwin was the first to provide a clear and credible mechanism by which that could happen, that actually matched the evidence.

2. I think it was Asimov, but it might have been Dawkins.

3. I always think they should look like pigs, but they never do.

4. Notably from sea urchins to starfish.

5. See what he did there?

6. Multiple times! In all kinds of different forms, from our mammalian eyes, to the clustered eyes of insects, to the ultra-weird trilobite eyes made up of dozens of layered calcite lenses.

7. Though hedges his bets, saying that he ‘is said to have asked…’

8. And nor will any government of humans ever be.

9. A particularly egregious example, now abolished, required childminders to register separately as a ‘food business’ with the local authorities.

10. The survey does not appear to ask this question of fathers.

11. As David Goodhart has written extensively, including in his latest book, The Care Dilemma, the discourse is dominated by high-earning, highly educated families - ‘Anywheres’ - in which both parents often have high-powered professional careers, and tend to prioritise returning to the workplace. The question of wanting to go back to work can look rather different if one does not have a career that one is passionate about, but rather a minimum wage job to pays the bills. Sadly those voices are rarely heard in the debate.

12. Growing the economy is, admittedly, a traditionally legitimate right-wing focus.

13. The fascinating thing is that precisely while the Government was busy removing academies from local authority control and giving them the freedom to set aside the National Curriculum and hire unqualified teachers, it was busy imposing the straitjacket of the Early Years and Foundation Stage curriculum upon childcare providers.

14. Or indeed woman.

15. The one anounced last year, that just came in, expanding the 15 hours entitlement to parents of 9 month, 1 year and 2 year olds.

16. For 0-2s.

17. For 3+

18. TFR now down to 1.44, from 1.49 last year, and showing no sign of slowing its descent.

19. Again, they never seem to ask men these questions.

20. It is also what we see in housing, the other major area where Government regulation in the form of planning law has comprehensively squashed supply and prevented the free market from functioning. Though at least there, as yet, there are no price controls.