Nurseries should be able to apply for academy status and opt out of local authority control, says the think tank CentreForum.
The report ‘Affordable quality: new approaches to childcare’ recommends that nurseries and children's centres should be allowed to attain academy status, as schools are currently able to.
This would mean money currently allocated to local authorities would go direct to academy nurseries.
Conservative MP, Elizabeth Truss, who wrote the report, believes Britain should also adopt the Dutch structure, where childminder or ‘host parent’ agencies operate locally, training and monitoring registered childminders, while parents pay a monthly fee for childminding.
The agencies would take responsibility for inspection and training and would be regulated by Ofsted, rather than the individual childminders.
Ms Truss claims that simplifying the provision so children of all parents using subsidised childcare go to a nursery or an approved agency would enable a single childcare support to be paid to the parents combining the existing childcare element of working tax credits, employer vouchers and early years entitlements.
She said: “The coalition government has a great opportunity to simplify the provision of childcare and get better value for money for parents. Reform could lead to an increase in availability of flexible childcare and an end to spiralling costs.”
Purnima Tanuku chief executive of the National Day Nurseries Association (NDNA) would like to see the issue of childcare affordability being addressed, but believes deregulation is not the answer.
She said: “NDNA believes that childcare affordability is an important issue that needs to be addressed, however, deregulation is not the answer. Regulation means parents are safe in the knowledge that their children get the same level of protection, whatever type of childcare they use – nursery, preschool playgroup or childminder.
She added: “Childminders are an important part of the childcare sector and we shouldn’t create a two-tier system which could mean childcare with little regulation for some children, in contrast to a robust national system of inspection under Ofsted for others.
“Research evidence shows that high-quality childcare and early education makes the biggest difference to how children do in future, particularly the most disadvantaged children.
"Well-qualified staff, in the right numbers, are vital to ensure children get the best learning experience, whether this is at a nursery or at a childminders. We would not advocate changes to the recommended ratios unless the impact this would have upon children has been researched thoroughly.
“Evidence gathered by NDNA from nurseries is that VAT, Business Rates and shortfalls in free nursery education funding are the factors driving up childcare costs. NDNA would recommend ring fencing of the free nursery education funding to make sure the cost of funded places is covered to avoid nurseries having to make up the shortfall by pushing up fees. We would advocate reducing or exempting private and voluntary nurseries from Business rates and VAT to reduce costs.”
The report reveals that the British government spends more on pre-school support than the governments of Germany, France and the Netherlands, and yet childcare costs for British families are amongst the highest in Europe.
Ms Truss suggests raising the ratios for childminders to 5.1 for the under fives to make the service more affordable.
British child-adult ratios are currently some of the lowest in Europe, with a 3:1 ratio for childminders looking after under fives. In the Netherlands, Germany and Ireland that ratio is 5:1. In Finland the ratio is 4:1.
The report also recommends relaxing restrictions on informal care so if parents wish to pay neighbours or friends using their own money they should not be barred from doing so as they are at present (if they are not Ofsted registered).
However, to ensure the child's safety anyone being paid to look after children should have a Criminal Records Bureau check.
Image: Elizabeth Truss - credit Conservative Party