Childcare costs rising and families left struggling, says report

Parents are paying 4% more for childcare for under-twos than they were a year ago and 5% more for children aged two, a report has found.

Childcare costs stand at around £138 per week, or more than £7,000 per year, on average for a part-time nursery place (25 hours per week) for a child under two, according to charity Coram Family and Childcare’s annual childcare survey.

Typical costs range from £179.86 per week in inner London for a part-time nursery place for a child under two, to £114.76 per week in Wales.

For two-year-olds, the average cost across Britain was put at just under £133 per week.

The price of a part-time care place for a child under the age of three is about twice as much as the average household spends on food and non-alcoholic drinks per week (£61.90), the report said.

It added that childcare providers are struggling to remain sustainable during the coronavirus crisis, with 39% of local authorities in England seeing providers in their area raise their prices over the last year, and 32% reporting that some providers have reduced the number of free early education entitlement places they offer.

Three in 10 (30%) have seen providers increase 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 past year, the majority have not yet seen an increase in shortages of childcare.

More than two-thirds (68%) of local authorities in England reported having enough childcare available to meet demand for parents working full-time, compared with 56% a year earlier.

However the report said this is most likely to be due to decreased demand from families during the pandemic, rather than increases in the supply of childcare.

It also said shortages of places for disabled children persist despite signs that fewer disabled youngsters are using childcare – a third (31%) of local areas thought that fewer children with special educational needs and/or disabilities were using childcare than last year.

Families receive varying levels of funded support with childcare, depending on factors such as the age of the child and where they live in Britain.

Megan Jarvie, head of Coram Family and Childcare, said: “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.”

The report argued that Universal Credit should be reformed by increasing the maximum amount of childcare costs paid under the benefit and moving to up-front payments for childcare.

Any underspend in budgets for tax-free childcare should also be reallocated to other parts of the system, prioritising the most disadvantaged youngsters, it said.

A Department for Education spokeswoman said: “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 £3.6 billion 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.”

The report was based on surveys from local authorities in England, Scotland and Wales returned to Coram Family and Childcare between November 2020 and January 2021. A total of 180 local authorities returned data.

Here are the average weekly prices for a part-time (25 hours) place for an under-two followed by a two-year-old child at nursery, according to the report:

– England, £140.27, £134.73

– Scotland, £117.29, £113.31

– Wales, £114.76, £114.45

– East Midlands, £134.50, £126.14

– East of England, £145.36, £144.84

– London (inner), £179.86, £177.61

– London (outer), £156.32, £147.87

– North East, £130.64, £128.10

– North West, £126.43, £120.25

– South East, £145,90, £140.05

– South West, £132.26, £128.84

– West Midlands, £136.14, £133.41

– Yorkshire and the Humber, £115.39, £110.52