Childcare costs soar in annual survey

The findings from the Family and Childcare Trust reveal that parents who claim Working Tax Credits will be out of pocket £52.50 weekly. Just seven per cent of councils in Scotland report sufficient care for disabled children.

This year's survey reveals the costs of childcare as well as the huge rise in fees since last year.

For the first time outside the capital, parents on the very lowest income who claim Working Tax Credits will find that the maximum amount they can claim of £175 a week will not cover part-time childcare costs (25 hours weekly) which could leave them £52.50 worse off a week.

The cost of a part-time nursery place for a child under two has risen by 5.1 per cent in the last year and now costs £115.45 a week, which is over £6,000 a year. Part-time care with a childminder has also risen by 4.3 per cent and now costs £104.06 a week, over £5,000 a year.

Stephen Dunmore, chief executive at the Family and Childcare Trust said, 'During this Parliament we have welcomed extra support for parents through the new tax-free voucher scheme and a commitment to raise the amount of childcare support in Universal Credit. But if childcare costs continue to rise at this pace, the benefits of this new financial support to parents will be quickly eroded within the next Parliament.'

Meanwhile, just 43 per cent of local authorities in England have sufficient childcare to meet the needs of local families.

This gap is bigger in Scotland and Wales, which report just 15 per cent and 18 per cent respectively of councils reporting enough childcare. This is despite the Childcare Act 2006 stating that local authorities in England and Wales must provide sufficient childcare for working parents and parents training for work.

The situation for the care of disabled children is even worse, with as few as seven per cent of Scottish authorities reporting sufficient care for  disabled children. This is a huge drop from 18 per cent last year. In England, this figure is down to 21 per cent from 28 per cent but in Wales, there has been a three per cent increase in sufficient care for disabled children since last year, although the figure is still at just nine per cent.

Parents with irregular work patterns have also suffered a decline in the number of childcare facilities. In Wales, none of the local authorities surveyed reported sufficient childcare for parents who do not have a regular work schedule. In Scotland, it is down to just four per cent, but in England, there has been a slight increase to 15 per cent.

The Family and Childcare Trust is asking the next Parliament to:

• merge Universal Credit support for childcare with the tax-free childcare scheme;
• extend free early education for all two-year-olds and for 48 weeks of the year for all two-, three- and four-year-olds;
• make childcare and early education a legal entitlement for parents;
• revisit the free early education funding for three- and four-year-olds and make it more responsive to social factors.

The survey is sponsored by Computershare Voucher Services.

Neil Leitch, chief executive of the PLA, said, 'It is concerning, but unfortunately unsurprising, to see that childcare costs are continuing to rise.

'For many years now, government funding for the free entitlement schemes for two-, three- and four-year-olds has failed to meet the cost of the providing these places, leaving childcare providers to make up the shortfall.'

Purnima Tanuku, chief Executive of NDNA, said, 'We share the concerns of the Family and Childcare Trust about the rising cost of nursery places and we’re campaigning for wide-ranging changes that could ease the burden for families.

'Nurseries are being forced to increase their fees to parents who pay for additional hours, or for younger children not eligible for funded places, to make up the funding shortfall. For most nurseries, the average sum received of £3.80 per hour does not cover the cost of high-quality childcare, let alone make a surplus.'

4Children chief executive Anne Longfield said, 'Childcare is one of the biggest financial and logistical challenge facing families today.
 
'It is no wonder, given such a steep rise in costs, that families across the country are struggling to make ends meet - with a significant number considering giving up their jobs as a direct result.
 
'It’s clear – we need modern childcare arrangements which meet the needs of modern family life. That means moving towards a universal guarantee for all parents who need it of high quality, affordable childcare for children from 0-14.'

PACEY's chief executive Liz Bayram said, 'We recognise the difficulties families experience due to the ongoing rise in childcare costs, and so while we welcome the extra support provided to parents through the new tax-free voucher scheme, and increased funding for free early years education, we share the Family and Childcare Trust’s view that the childcare system in this country needs radical reform.

'Considerable regional variations in take-up for free part-time education is demonstrative of a system which is too inherently complex.'
 
A DfE spokesperson said, 'We understand that the cost of childcare can be an issue for many parents, but this report only relates to the prices parents would pay before they receive the Government’s offer of 15 hours of free childcare.

'It therefore neglects the record amount of fully funded childcare we are giving – savings worth a maximum of almost £9,000 per child. Based on the FCT’s own figures, our free entitlement will save the average eligible family £2,500 per year for each child. Tax-free childcare will also give 1.9 million families an extra £2,000 per year.

'We have increased funding for early education from £2 billion to around £3 billion per year and made clear that local authorities should pass on as much of this funding as possible to the front line.

'We are also taking action to increase the supply of childcare by encouraging schools to offer facilities from 8am to 6pm, making it easier for high quality nurseries to expand and launching childminder agencies.'