Feature: Childcare costs increased 4% in a year

Britain’s parents are paying 4% more for childcare for children under two, and 5% more for children aged two than they were one year ago, a survey of childcare costs has found.

Coram Family and Childcare’s 21st annual Childcare Survey found that parents have faced childcare costs rising well ahead of inflation, and are now paying an average of £138 per week, more than £7,000 per year, for a part-time nursery place for a child under two.

According to the survey, 39% of local authorities said providers in their area have increased their prices over the last year, 32% said that some providers have reduced the number of free early education entitlement places they offer and 30% said providers have increased the number of children looked after by each staff member.

Despite more than a third (35%) of local authorities in England reporting a rise in the number of providers in their area permanently closing in the last year, the majority have not yet seen an increase in shortages of childcare.

More than two-thirds (68%) of local authorities reported having enough childcare available to meet demand for parents working full time, compared to 56% last year. However this is most likely to be due to decreased demand from families during the pandemic, rather than increases in the supply of childcare, and it is yet to be seen whether there will still be enough childcare places if and when demand returns to pre-pandemic levels.

In addition, the survey found that availability of childcare for certain groups is little improved on last year, with less than one in four local areas reporting enough childcare for 12 to 14-year-olds (13%), parents working atypical hours (16%) and disabled children (25%).

These shortages for disabled children exist despite the fact that fewer disabled children are using childcare, a third (31%) of local areas thought that fewer children with special educational needs and/or disabilities (SEND) were using childcare than last year.

Coram Family and Childcare is calling on the government to launch a funding review for the free early education entitlements to make sure that funding levels are sufficient to support the delivery of high-quality education and care, including, but not limited to, issues resulting from Covid-19.

It is also calling for Universal Credit to be reformed so it does not lock parents out of work, by increasing the maximum amount of childcare costs paid under Universal Credit and move to upfront payments for childcare.

Megan Jarvie, head of Coram Family and Childcare, said: ‘The pandemic has reminded us all of the vital importance of childcare, in enabling parents to work, boosting children’s learning and narrowing the gap between disadvantaged children and their peers.

‘However, the crisis has also exacerbated the issues that exist in the sector. For too many families the system simply isn’t working and they are left struggling to make work pay after childcare costs or are forced out of the workplace entirely.

‘There remains a risk that many providers could close, leaving more families struggling to find the childcare that they need, or that costs could further increase, at a time when family finances have already been stretched by the pandemic.

‘Financial support from the Government has helped childcare providers to stay afloat, but we don’t know what the effects will be when this support ends.

‘We’re calling for the government to take urgent steps to improve the system now and in the longer-term so that every child can access the high-quality childcare that supports their early development.’

A Department for Education spokesperson said its guidance is clear that local authorities are responsible for making sure all eligible children can take up their childcare place free of charge and that providers’ charging policies enable this.

‘We know early years providers are working hard to deliver crucial care and education to our youngest children, and we are working closely with the sector to ensure timely support.

‘Where nurseries do see a drop in income from either parent-paid fees or income from government, they continue to be able to claim from the Coronavirus Job Retention Scheme for 80% of an employee’s wages for the hours they are furloughed and not working. We are also planning to spend around £3.6bn on early education entitlements this financial year.

‘Working parents will remain eligible for childcare support even if their income levels fall below the minimum threshold for 30 hours free childcare and Tax-Free Childcare.’

Cllr Judith Blake, chair of the Local Government Association’s children and young people board, said the government needs to provide additional funding where providers are at risk of failure as a result of the pandemic.

“Childcare and early education providers have been a vital part of the nation’s response to Covid-19 and this survey shows how many are struggling to manage and sustain their provision.

‘It is vital that all parents have affordable access to the good quality childcare they need to enable them to return to work while ensuring that children have the support they need to develop school readiness.

‘We support calls in the report for a review of the early years system to ensure that investment supports the government’s ambitions and that parents are clear on the best options for their children, as well as shorter-term actions such as supporting families on Universal Credit by paying up-front for childcare costs.

‘It is essential that we have enough childcare places to support families to ensure the country can recover from Covid-19, both economically and socially, and the government needs to closely monitor the situation and provide additional funding where providers are at risk of failure as a result of the pandemic.’

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