Childcare costs still on the up – despite recession

Findings of Daycare Trust’s ninth annual childcare costs survey, sponsored by Imagine Co-operative Childcare published.

Daycare Trust, the national childcare charity, today called for an election commitment from all parties to make greater investment in childcare, as the soaring cost of childcare across the UK was revealed.

The annual Childcare Costs Survey which is compiled from figures submitted by Family Information Services in England, Scotland and Wales, examines by region the cost of childminders, nurseries and after-school club provision based on 25 hours use a week (or 15 hours for after-school clubs).

Amongst the key findings, today’s report reveals:

A rise in costs way above the rate of inflation for all types of childcare, despite the UK being in recession. In England the cost of a nursery place for an over 2 year old has risen by 5.1% - almost double inflation.
Significant growth in all forms of childcare costs in England, but a fall in out-of-school care for Scotland and Wales.
An average yearly expenditure of £4,576 for English parents, £4,368 for Scottish parents and £4,056 for Welsh parents for 25 hours nursery care per week, for a child under two
An average parent in England working part-time can expect to spend more than half their gross earnings on a nursery place for their under-two-year old. On average 25 hours nursery care costs £88, compared to average part-time earnings of £153 per week.
Parents in London facing the highest reported costs face paying up to £11,050 per year for 25 hours childcare per week, or £22,100 for 50 hours.
58% of Family Information Services across the UK-and shockingly 69% in Wales- revealed parents had reported a lack of childcare - with half of all local authorities reporting insufficient childcare for older children and disabled children.

Commenting on today’s survey, Daycare Trust Chief Executive Alison Garnham said:

“Over the last year, families across the UK have been hit hard by the impact of the recession, with parents facing the strain of losing jobs; having their hours cut back; or facing pay cuts – all of which is compounded further by childcare costs shooting up.

Daycare Trust is calling for the maximum proportion of childcare costs the poorest parents can claim through tax credits to be increased from 80% to 100%; and for the free entitlement be extended. In the light of the welfare reform programme, there is also an urgent need for more out-of school childcare provision. We would also urge all parents to check that they are claiming all the help that they are entitled to.

The difference that high quality, affordable childcare makes to a child’s future, to family life and in reducing child poverty cannot be underestimated – for so many families, this is the kind of family support they need.

We know that whatever the outcome of the election, there are tough spending choices to be made. However, we hope that all parties will recognise what a central issue childcare is for parents, and take up our policy recommendations as they build their manifestos.”

Following the survey, Daycare Trust has made the following key policy recommendations:

Sustain and build upon investment in childcare and early years provision, given its impact on child outcomes, and its potential for return on investment.
Increase the proportion of help with childcare costs through tax credits to 100%; increase the maximum levels that can be claimed by disabled children and region to accommodate high cost areas.
Extend the provision of the free entitlement to all two, three and four year olds, building on the number of hours available so that 20 hours a week is available by 2020.
Increase provision of out-of-school childcare, given the growing number of working parents and the impact of the welfare reform programme.
Provide subsidised out-of-school activities for all school-age children, ultimately aiming to make them free for all
Continue to invest in the quality of childcare and early years provision, through initiatives such as the Graduate Leader Fund.
Conduct a national evaluation of 2011 Childcare Sufficiency Assessments for England and Wales.

Daycare Trust, 22/02/2010