Stay-at-home mothers on benefits should be given 20 hours of free childcare a week to ensure that their children receive the best start in life and are ready for school by the time that they turn five, a controversial report will recommend today.

The study by CentreForum, a liberal think-tank, claims that existing childcare subsidies, which are available only to working parents, result in nonworking families receiving less financial support than more prosperous households.

It recommends the introduction of a new childcare benefit of £60 a week, 38 weeks a year, for children aged three to five whose parents are out of work.

Julian Astle, the author, said: “The Government’s obsession with using childcare subsidies to boost employment, rather than to promote child development, has resulted in children from nonworking families being given less financial support than all other families, including the wealthiest families who can take advantage of the £2,400 annual tax saving on childcare costs.

“The result is that access to childcare remains a key issue for the very group of children who most need — and would most benefit from — a high-quality preschool education,” he said.

The report, entitled The Surest Route, said that the growing body of evidence from around the world indicated that a preschool education could help to boost a child’s intellectual development and social skills, provided that staff were well-trained and that children were not left in it for very long periods.

Findings from a government study titled Effective Provision of Preschool Education also suggested that children from the most disadvantaged backgrounds benefited the most from childcare in terms of cognitive and social development.

Although all children are guaranteed 12½ hours a week of free nursery education once they turn three, the report disputes claims by the Government that the vast majority of children are taking up this enti-tlement. In much of the country, childcare providers cannot afford to deliver nursery care at rates covered by government subsidies, leaving parents to make up the difference. Nonworking parents cannot afford to do this, the report claims.

Among the recommendations are that existing means-tested subsidies for working parents, worth up to £140 a week, should remain. It is also proposed that the cost of the reforms, estimated to be £530 million a year, could be met by reducing the subsidies on student loans for the highest-earning students. For a graduate earning £45,000 a year, this would increase the student loan repayment period from 13 to 14 years.

The reforms would have to be accompanied by investment in training for nursery staff.

Mr Astle said that in addition to the personal gains to children and parents from nonworking households, such investment would reap economic gains for the nation in the long term. Evidence from preschool education programmes in the US show that providing good preschool childcare can lead to economic advantages — in terms of higher wages and lower welfare costs for participants — of between four to seven times the cost.

Mr Astle denied that the report suggested that the poorest families were the least able to look after their children properly. “We know that good preschool education leads to huge gains for all children. What I’m saying is that the poorest families are discriminated against because they are the only ones unable to access it,” he said.

Chris Keats, general secretary of the National Association of Schoolmasters and Union of Women Teachers, was sceptical.

“This seems to suggest that the way to aid the development of young children from workless families is to remove them from their parents. But it’s not necessarily childcare that these children need,” she said. “Parents who aren’t working can be isolated and need extra support. This can be provided by parent and baby or parent and toddler groups, where they can get help and advice.”

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