The Commission for Childcare Reform has said while this could cost more than £1.8 billion, depending on uptake, the Scottish Government and Westminster should work together to reform the system.
Jackie Brock, the chief executive of Children in Scotland, said the plans amounted to a “long term transformation” of childcare, claiming the current “piecemeal and incoherent” approach is making life more difficult for families.
Children in Scotland, together with the Scottish Council for Development and Industry (SCDI), led the Commission.
At the moment all three and four-year-olds - and some two-year-olds - are entitled to up to 600 hours a year of free early years education.
But in its report, the Commission said some working parents have to “pay part of the cost of what is supposed to be free” and it said a “fundamental review of the provision and payment for the 600 hours is required”.
Ms Brock said: “In Scotland in 2015 far too many families are finding that, instead of working for them, the childcare settlement is making their lives more difficult and less secure. The current mix of provision and support is incoherent and piecemeal, too often resulting in stress, financial problems and the hampering of progress in careers and education.”
She added: “The only realistic route to correcting this is for Holyrood and Westminster to collaborate, bringing forward the Commission’s calls and working together on policy and legislation to create the change families deserve.”
The Commission is proposing that every child up to the age of 12 should receive “up to 50 hours of high quality childcare and education per week throughout the year”.
Pre-school children would continue to receive 600 hours of free care a year, while the balance of the 50 hours a week should be “accessible and affordable for all families”
The report suggested: “The net cost to parents should be on a sliding scale that takes account of income to ensure affordability for all families.
“In the long term, we believe that no family should spend more than 10% of net household income on the costs of their 50 hours childcare entitlement. Depending on their circumstances, some families may need support to reduce costs below 10% of their net household income.
It accepted that the vision was “ambitious”, adding: “At a time of reducing public spending, it is both exciting and challenging to consider how to achieve such a bold outcome, and we recognise that it would take a number of years to deliver all of our recommendations. But we believe it is both necessary and possible to do so.”
Implementing the change would take “at least five years and perhaps nearer ten - not least because it will be essential to manage the rate of expansion to avoid compromising quality, and also because increased public spending will be needed to enable expansion”.
But the Commission said: “If Scotland is to realise the ambition to be the best place in the world to bring up children, we believe we should take on the challenge and deliver the vision set out in this report.”
It called on the Scottish Government, together with the UK Government and others, to commission a “fundamental review of all aspects of the funding of childcare”.
The Scottish Government and local authorities should also ensure that working parents do not have to pay any of the costs of the 600 hours per year of free early learning and childcare, the Commission said, adding that Holyrood, councils and Westminster should “work together to simplify the funding of childcare to ensure it is clear, simple and fair for both families and providers”.
Commission chair Colin MacLean, a former director of financial strategy at the Scottish Government, said: “Our report asks the Scottish Government to address the country’s ‘childcare challenge’, ie ensuring that when parents need to use childcare in order to work or study, they can access high-quality, affordable, flexible provision and be confident that it meets the needs of their child.
“Through 15 months of intense consultation work we have developed a series of recommendations which we believe identify the key issues in childcare and provide the template to meet that challenge.”
SCDI chief executive Ross Martin said: “The depth and breadth of consultation work undertaken by the Commission gives this report unique merit and credibility, and their findings are all the more persuasive because of the way they have placed business development and the needs of employers at the core of offering solutions for parents and providers.”