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Nick’s nursery-school economics

By Angela Harbutt
February 19th, 2015 at 2:50 pm | 1 Comment | Posted in Uncategorized

The new Family and Childcare Trust report , out today, is receiving wide coverage. Dramatic headlines proclaim that “The cost of childcare so high that it does not pay UK families to work” (Guardian headline). The price of a part-time nursery place for a child under two has gone up, the report states, by almost a third in the last five years with parents now being forced to pay more than £6,000 a year.

The cost of childcare is undoubtedly an area that political parties are likely to squabble over as the general election approaches. Indeed Nick Clegg has already come out of the traps promising more for “hard working families”.

At present, parents of three and four-year-olds, and some two-year-olds, are offered 15 free hours’ childcare per week in termtime. Nick has pledged today to extend this to give away 15 hours a week “free” for all two-year-olds and for those children of working parents aged between nine months and two years “saving families thousands of pounds”. He also said Liberal Democrats aimed to increase free provision to 20 hours in the longer term.

Good for the kids, great for the parents, fantastic for society. Maybe….

But let us consider for a moment why childcare is so expensive and indeed why costs have risen so dramatically and look set to rise further.

Let’s start with the basics. Childcare is labour intensive. The law says (last time I looked) that one nursery worker can look after no more than three children under two, where children are over two the ratio is 1:4 and for over-threes it is 1:8. National Insurance, pensions and salaries for workers account for 77% of a nursery’s costs – that’s a healthy slug of the cost. Added to that, nurseries are also now expected to have more qualified staff, adding to the costs. And lest we forget, nurseries’ staff costs are set to increase in 2015 with pension auto-enrolment responsibilities coming in for many small and medium size businesses.

Government giveth with one hand and taketh away with another.

And if nurseries are forced to pay all staff the Living Wage, as many Councils appear to be considering, this would push up costs further (by an estimated 13%).

Then there are the additional costs facing a typical nursery. Insurance is very expensive (and rising every year it seems). Add in rent, heating and lighting, cleaning, food, maintenance etc most of which have risen dramatically in one way or another over the past few years. Then consider business rates and VAT (up from 17.5% to 20% in 2011) pushing up the cost of childcare. The average annual business rate paid by nurseries is almost £16,000. Most nurseries are not able to benefit from small business rate relief, as their rateable value at an average £30,000 is well above the threshold. And let us not forget that compliance with the never-ending list of Government rules and regulations has also added to costs (providers of childcare are subject to Ofsted inspection in the same way as schools for older children).

This can explain part of the rising cost in childcare fees, but by no means all of it. The biggest cause of the rising costs of childcare is the “free” Government subsidy.

Nurseries have to provide 15 hours of free childcare for children over the age of three. Although the Government (i.e. the taxpayer) pays for this, according to the National Day Nurseries Association, (NDNA) they only get paid £3.80 an hour per child from the Government to provide the care. This payment does not cover the cost of care, it argues, leaving a shortfall per child per year. Underfunding has been reported by NDNA in six successive nursery surveys over four years.

So how do nurseries make up the shortfall? By effectively increasing the costs to parents who pay for care above and beyond the 15 hours and those with children under 2 years old.

Simple economics!

The more hours nurseries are expected to provide at a loss to their business, the more they will pass the cost on to parents paying for additional hours of childcare beyond the free 15 hours, or for children below the entitlement age.

Don’t take my word for it. The NDNA says

“The money that childcare providers currently receive to deliver free hours falls short by an average of £800 per child per year for each funded three to four-year-old place and £700 for each two-year-old place.

“Nurseries are being forced to increase their fees to parents who pay for additional hours, or for younger children not eligible for funded places, to make up the funding shortfall.

“For most nurseries, the average sum received of £3.80 per hour does not cover the cost of high-quality childcare, let alone make a surplus.”

“This is the biggest single reason that nursery fees are rising for some paying parents who end up subsidising the free places.”

The more governments tinker with the market, and meddle in matters best left to parents the more problems they cause.

So Nick please note, offering more “free” places is not the solution, nor is the planned extension to 20 hours. It’s most likely to exacerbate the problem, driving more nurseries out of business; limiting choices to parents and driving up costs still further for parents seeking more than the “free” entitlement. It may get you a few extra votes this May, but, voters wont thank you in the long term.

“Free” is not “free” it always costs somebody something – more when the Government get’s its sticky fingers involved.

Of course some will say that the simple solution is to pay nurseries more. That might reduce childcare costs in the wider sense – removing the subsidy effect.

But what will get cut to fund this act of largess to those who choose to have children? And is it fair? Nick appears to be penalising parents who elect for one parent to stay at home to nurture their children in pre-school years. Why are they excluded from this election gift to parents? Indeed why make it free for all? Much like the winter fuel allowance, why provide this those who don’t need it.

This is the worst kind of lib demmery. No wonder the party is the mire if this is typical of it’s offering.

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EVENT: Stop the Nonsense

By Angela Harbutt
February 16th, 2015 at 3:18 pm | Comments Off on EVENT: Stop the Nonsense | Posted in Uncategorized

STOPthenonsense_RSVP_webJust in case you have not heard about this elsewhere, here is an must-not-miss event scheduled for next week. Plain speaking on plain packaging.

Tuesday 24th February at the IOD in London. RSVP to or click here for more information on the event.

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Ill-judged sideshow has little public support

By Angela Harbutt
February 12th, 2015 at 2:33 pm | Comments Off on Ill-judged sideshow has little public support | Posted in Uncategorized

hoopsWith Parliament formally dissolving on March 30th, the outgoing parliament will not be able to complete all of its work, resulting inevitably in many Government plans falling by the wayside. Of course, some will say this is a good thing – the less Government does the better!

But what, do you think, voters believe the priorities of the Government should be in the remaining days?

No need to wonder. Forest has commissioned an exclusive poll asking voters this very question.

Respected research company Populus asked more than 2,000 members of the public, on a scale of 0 to 10 where 0 = not important at all and 10 = very important, the level of importance they attach to completing outstanding pieces of legislation facing the remainder of this parliament.

Those ranking highest included: “controlling the UK’s borders and reducing immigration”; “tougher counter-terrorism and security laws”; “stopping human trafficking”; “improving access to affordable housing”; “making it easier for employers to take on apprentices”.

“Introducing plain packaging for cigarettes” was the lowest of any of the variables tested, with a mean importance rating of just 3.51. The closest variable, “regulating the future of the fracking sector”, scored 6.10.

It does make you wonder no Davewhat on earth possessed the Government to determine in the dying days of parliament to force in a vote on plain packaging, particularly as evidence from Australia shows the policy hasn’t worked, with teen smoking rates increasing by 36% from 2010 to 2013?

Of course the answer is “politics dear boy”. As Simon Clark, Director of Forest says

“Plain packaging legislation is an ill-judged sideshow and a distraction from the real challenges the government faces before the end of this parliament.”

I have written to my local MP, Jane Ellison, again, asking her to vote no at the upcoming vote. But given that she is the minister who has forced this bill into parliament I am not terribly optimistic that she has any intention to listening tlast chance saloono me or any other voter in this constituency. Indeed, given that the Government’s 2012 “public” consultation on plain packaging delivered a resounding NO!  to the whole idea – what are the chances that she will listen now? Here is hoping that voters will show Ellison and her ilk the same contempt that they have quite clearly shown the public come May 7th, and that some elected politicians will think twice before voting “aye” to this cynical and ill-conceived piece of politics.

Want to find out more?

For survey results and more from Forest click here.

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Plain ludicrous

By Angela Harbutt
February 11th, 2015 at 2:25 pm | Comments Off on Plain ludicrous | Posted in Uncategorized

Since December 1st 2012, plain packaging of cigarettes has been an ever-present feature of the Australian landscape. Given the wealth of data available from Australia on the impact of the experiment, you would think that Tobacco Control would be focusing all efforts on interpreting the results from there right now. After all, the “problem” identified by UK Public Health in the past 3 or 4 years has been that there is “no real life data” to use. So, they argue, they have had to rely on artificial scenarios and often quite ludicrous experiments to make their case.

Why then, one has to wonder, is University of Exeter wasting cash on “experiments” on plain packaging here in the UK where plain packaging has yet to be introduced? The most likely conclusion is either that they have way too much money to fritter away on building the reputations and stroking the egos of the “academics” down in the South West, or the data coming out from Australia is not as helpful as desired. Cue more UK “research”.

Unfortunately for those concerned, the latest piece of UK research is “one of the funniest studies in favour of plain packaging ever!”.

In the experiment, smokers had to choose between pressing a key that might earn cigarettes or a key that might earn chocolate. Just before participants made each choice, they were presented with either a picture of a branded cigarette pack, a picture of a plain cigarette pack, or nothing.

Hold the front page …

whereas branded packs increased the probability of participants making the cigarette choice by 10% compared to when nothing was presented, the plain packs did not“. The implication, they say, is that “plain packs are less effective at prompting smokers to purchase cigarettes compared to branded packs“. And so the conclusion… “These findings provide experimental* support for the idea* that introducing plain packaging might* reduce tobacco purchasing or consumption.” (*my emphasis)

Come on Exeter, this is lame even by Tobacco Control poor standards. What exactly did you predict would happen prior to the “experiment”? Surely the implication from this ham-fisted piece of research is that a dodgy looking can of cola consumers have never seen before and know nothing about, is less effective at prompting cola drinkers to purchase cola compared to a branded product with an established reputation such as Coca Cola. I call that commonsense and surprising that more people didn’t reject the dodgy looking packs of (unbranded) cigarettes more often.

Even the authors appear somewhat embarrassed by their latest experiment. Buried beneath the headlines of the “study”, is this telling statement “In the natural environment, smoking may be governed by a whole range of factors…” erm yes … “It is not clear to what extent plain packaging will reduce smoking when these other factors are at play.”

Well, it is an apology of sorts I suppose, although I still wonder if it never occurred to them that when offered up a rather alien-looking pack of cigarettes never seen in these fair aisles, a significant proportion of participants might (correctly) just decline the offer.

You really can’t spend years whinging about the lack of “real data” that is available, then, when you have it in abundance, continue to dream up ever-more ridiculous experiments here in the UK and expect to be taken seriously.

Want to find out more?

For more information on the authors of this desperate piece of “research”, read Dick Puddlecote’s entertaining post here.

You can read the author’s summary of their experiment here.

For a summary of how exactly that plain packaging experiment is going in Australia, read Christoper Snowdon’s post here.

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Why the 11th hour ASA u-turn?

By Angela Harbutt
July 30th, 2014 at 4:24 pm | 4 Comments | Posted in Quango

For those of you that don’t know, the Advertising Standards Authority (ASA) is a quasi-judicial authority, tasked with providing independent scrutiny of the marketing communications industry; specifically ensuring that advertising is not misleading, harmful or offensive.

The Chairman of the ASA is appointed by Advertising Standards Board of Finance (ASBOF) – who then appoints 12 Council members to preside over various cases put before them (frequently by members of the public complaining about advertisements they see). Council members are supposedly selected by the Chairman to reflect a diversity of background and experience. This of course only works if the Chairman does indeed appoint Council members who (a) genuinely reflect a wide range of views and experiences and (b) are completely impartial. The current Chairman is the beleaguered Lord Smith of Finsbury (out-going Chairman of the Environment Agency and former Labour Minister).

So what happens when the advertiser under investigation by the ASA is the Government, and too many of those on the ASA Council have various vested interests in keeping on side with government? Can the ASA realistically be relied upon to be blind status of the advertiser?

Perhaps not…

Back in January 2013 I submitted a complaint to the ASA regarding a Government “quit smoking” advert. The advert stated:

When you smoke the chemicals you inhale cause mutations in your body and mutations are how cancer starts. Every 15 cigarettes you smoke will cause a mutation.

I challenged the categorical statement that “every 15 cigarettes you smoke will cause a mutation”. The statement was based on an exploratory research paper which estimated that every 15 cigarettes smoked caused a mutation. It was based on a sample of one patient (yes one) whose smoking record was unknown and the paper did not take into account other factors that are known to affect mutation rates (e.g. ethnicity, age, environmental (background level of mutagenic chemicals) or lifestyle factors etc). No criticism of the study, it was fascinating insight into where genome research is heading. But the study did not provide evidence to back up the study. Nor did any other study. At best one other study (with a sample size of 21 patients – not much more than the average focus group) showed a range of estimated mutation rates, again with a long list of limitations attached to the estimates in this tiny sample.

Over the past 18 months the ASA has investigated the complaint thoroughly. As reported elsewhere, unsurprisingly, the ASA found on three separate occasions that the government advert was misleading and lacked substantiation. After the Department of Health had challenged the first two findings, the ASA brought in a cancer research expert to impartially review the evidence. Post review, it concluded, for a third time, that the advert was misleading and lacked substantiation. This recommendation was put to the ASA Council.

The ASA Council adjudication today however, overrules the findings of its own 18 month investigation, stating that the complaint is not upheld.  Given the consistency of the ASA rulings during the course of this investigation, why the dramatic last minute u-turn?

I can see only three possible reasons for the ASA Council adjudication.

Firstly the ASA Council were simply bamboozled by the science and talk of “peer-reviewed studies” (do people really not understand what that actually means?), lacking sufficient experience/ knowledge to differentiate between tiny incomplete exploratory studies producing estimates, and definitive studies providing robust evidence

Understandable perhaps, although you might have thought that if Council lacked the required experience it would have deferred to it’s own exhaustive investigation rather than overrule it.

Secondly, this quasi-judicial panel could not bring themselves to rule that government had misled the people, with all the ramifications for the long term future of the ASA (and/or themselves) that such a high-profile ruling might bring.

Or maybe it was ideological, and their views on smoking had a part to play. Perhaps they thought that no matter how unsubstantiated the government claim, the end justifies the means. To admit the government had lied on smoking (which it clearly did) would set back the cause for many years.

May be it was a bit of all of the above.

I do not know the ASA Council views on smoking, nor do I know if they actually had the competence to deal with the research data put before them, but I have do know something on the interests of some of the Council members.

Ray Gallagher, (according to the ASA website) has been advising the government “since 2006” as “broadcasting Specialist Adviser to the House of Commons Culture, Media and Sport Committee”.

Martin Narey is, according to his twitter account, also an advisor to Government, an appointment he is very pleased to have had recently renewed “I’m very pleased to be asked by Nicky Morgan to advise her on Adoption, Social Work Education and DCS support”. (You may also be interested to read his 2009 report on Social Mobility here – Page 68 states “Smokers in lower socio-economic groups consume more cigarettes than more affluent smokers and are more addicted. The strength of the addiction makes it harder for poorer people to quit…”).

Yet another Government advisor seated on the ASA Council is John Mayhead. The ASA website reports “Since 1999 he has been a non-exec at the Department for Transport and also chaired the Government Strategic Marketing Advisory Board which was responsible for the oversight of all Government marketing activity.”

You may be pleased to know that Hamish Pringle is not a Government advisor directly. Unfortunately he is Strategic Advisor at advertising agency 23Red. And guess which organisations feature prominently on 23Red’s client list … “Change for Life”, “Smokefree”, “Public Health England” and … “the Department of Health” (yes really).

He is not the only one whose clients include Government.

ASA Council member Anthony Earle Wilkes is the Managing Director of CETC Ltd, a specialist equal opportunity consultancy. His website states that he provides equality and training to organisations including regulatory authorities, local authorities and Government department & agencies. One wonders just how much the state accounts for his business income. Quite a bit one assumes given the nature of his business.

I could go on, but am waiting for the ASA to send me the “ASA Council Declaration of Interests” (curiously not on the ASA website) – and anyway I think you get the point.

I suppose it is possible that none of those listed above attended or, if they did attend, voted to over-rule the ASA executive on this Government advert – that information is not available to us. It is a regulatory body shrouded in mystery after all. We do not know who voted for and who against? We don’t know if it was a majority decision or unanimous? Or whether anyone abstained due to conflict of interest? All questions that cannot be answered.

And here is the problem, one that Arch Bishop Cranmer stated so well :

It is a question of impartiality, which matters profoundly in political processes where force and influence compete with manipulation and facts: if an organisation with quasi-judicial authority professes to be objective in its investigations, then its senior staff and officers must not only be impartial, they must also be seen to be impartial. There cannot be even the merest hint of a political agenda subverting that professed neutrality or corrupting the overriding commitment to fairness and justice.

Given the many Governmental connections past and present of those seated on the ASA Council, for Council to overrule the recommendations of its own investigation, with no explanation as to why, brings into question the very impartiality of the organisation – and therefore the whole process itself. Can people with such close links to Government really be relied upon to consider complaints against Government fairly? I think not.

At the very least you might expect the ASA adjudication to list members past and present links to Government at the end of the adjudication – for transparency sake at least.

An appeal on the ASA Council adjudication has been lodged with the ASA Independent Reviewer – Sir Hayden Phillips – who may decide to look at it and write a review. But even then his role appears to be only advisory – he can politely ask Council to reconsider its ruling – but it appears that this quasi-regulatory organisation cannot be forced to change its opinion, no matter how compelling the evidence: Given that Council members clearly believe they know better than their own staff, one assumes that they will also consider their views likewise superior to the Independent Reviewer.

This case has ramifications for us all. If the Government is not sanctioned for misleading the public in such a clear cut case, what else might it be allowed to say without fear of sanction? It does not bear thinking about. In the meantime we will wait to see what an appeal brings us – but what’s the betting it will this time next year before any decision is made?

DISCLAIMER: Across 2012 and 2013 Angela worked on the Forest campaign Handsoffourpacks opposing the introduction plain packaging of tobacco. She submitted the complaint to the ASA whilst working on that campaign.

READ ALSO: “At last, the ASA verdict on Forest complaint about DH “mutation” ad

UPDATE: For more information read “Spot the Difference: How the Advertising Standards Authority changed its tune

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