Childcare Costs Rise Five Per Cent More For Under-Twos

A new report has stated that parents are having to find five per cent more for childcare than 12 months ago.

A new report has stated that parents are having to find five per cent more for childcare than 12 months ago, an average of £131.61 per week or £6,800 a year for a part-time nursery place for two-year-olds, according to the BBC.

Coram Family and Childcare’s 20th annual childcare survey finds that parents have been hit by childcare costs rising well ahead of inflation, according to the country’s most comprehensive annual survey of childcare costs, published today.

’There are seven different types of childcare support’ but ‘parents find it difficult just to find out what’s available to them’

According to the report, whilst most families can get some support for childcare costs via cost subsidies and free entitlements, the system has become far too complicated. In England, there are seven different ways for families to get childcare cost support, and each has its own eligibility criteria. Families risk missing out on what support they are entitled to.

Claire Harding, head of Coram Family and Childcare, said: “Good childcare is essential: it enables parents to work and boosts children’s learning. But for far too many families in the UK, it just isn’t working. Recent government investment is welcome, but many families still face crippling costs, especially in the period from the end of parental leave to when a child turns three.

“There are seven different types of childcare support depending on families’ individual circumstances, and many parents find it difficult just to find out what’s available to them.

She is calling on the government “to reform and simplify the childcare system, so every parent is better off working after paying for childcare, and every child has access to childcare which supports their learning and development”.

There is also the issue with availability, which has not improved much since last year. In England, 56 per cent of local authorities have enough childcare for parents working full-time, compared to 57 per cent in 2019.

Parents are faced with a postcode lottery for available childcare places and prices, which can wildly vary across the country.

London and the South East are the most expensive regions in the UK, where the cost of a part-time nursery place for a child under two is £165.47 and £144.90 per week respectively. The least expensive regions cost £116.25 in the West Midlands and £113.76 in Yorkshire and Humberside.

Neil Leitch, chief executive of the Early Years Alliance, said: “The government says that it wants to support parents with the cost of childcare but as this report shows, by refusing to invest what’s needed into the early years sector, it is actually making things worse for many families across the country.

“The fact is that childcare costs for under-twos are rising above the rate of inflation because childcare funding for so-called ‘free entitlement’ schemes isn’t increasing anywhere near it.”

He added: “Every year, the cost of delivering childcare places gets more and more expensive, and yet government funding has consistently failed to keep up.

In April, nurseries, pre-schools and childminders across England will see their staffing costs increase hugely as a result of national living and minimum wages rises of more than six per cent – but the biggest increase in funding any provider is likely to see is two per cent and that’s on the back of years of stagnant funding.

The Childcare Survey 2020 sets out actions that Scottish, Welsh and UK governments can take to help parents find affordable childcare:

• Reform Universal Credit so it doesn’t lock parents out of work: increasing the maximum amount of childcare costs paid under Universal Credit and moving to upfront payments for childcare.

• Regularly review the funding rate for free early years entitlements to make sure that they meet the cost of delivering high-quality childcare.

• Extend the 30 hours free childcare for three and four-year-olds in England and Wales to families where parents are in training, to help parents get better jobs.

• Double the early years pupil premium, to boost outcomes for the most disadvantaged children.

• Reallocate any underspend against the budget for tax-free childcare to other parts of the childcare system – and focus this on the most disadvantaged children.

Coram’s annual survey is based on data from 175 local authorities collected between November 2019 and January 2020.

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