London parents priced out of work by high childcare fees

A report by the Assembly says that the lack of affordable childcare in the capital is locking parents out of work, with around half of mothers in London in jobs, compared to two-thirds across the country.

It says that the main reason for higher childcare fees is that providers in London face higher costs than elsewhere.

According to the Tackling childcare affordability report, ground floor nursery rents are £100 to £250 per square metre in London, compared to £40 to £60 for Stockport in Greater Manchester. Staff costs are also 20 to 30 per cent higher in London.

However, providers do not receive significantly more funding for providing the free entitlement to cover their higher staff and accommodation costs.

Nursery classes attached to primary or infant schools also need to offer more flexibility to parents, rather than fixed three-hour sessions, which do not fit in with most parents’ working hours.

The report, which makes a series of recommendations, is also calling on the Government to develop the childcare element of Universal Credit so that the maximum amount families can claim varies according to local childcare costs.

An analysis of Universal Credit by London Councils found that under the system a London couple with two children would be £2,000 a year worse off than if they lived outside the capital, because of higher childcare costs.

The assembly’s health and public services committee says that in some well-off areas of London a full-time nursery place can cost up to £22,100 a year.

Childcare for a child under two in the capital costs up to a third more than elsewhere for a place with a childminder – an average of £119 a week -  and up to 24 per cent more for a nursery place (also £119 a week on average).

'Urgent priority'

London parents also face longer working hours and longer commutes to work and are less likely to be able to call on grandparents to help look after their children.

‘Tackling childcare affordability is an urgent priority, as childcare costs and other household bills continue to rise and more and more families struggle to make ends meet, ’ the report says.

Sixty-three per cent of London parents surveyed by the committee for the report said the cost of childcare had affected their decision about whether to work and 73 per cent said it affected how many hours they work.

The situation is made worse by local authority cuts and the closure of daycare in children’s centres.
To help counter this, the committee says that London Councils should develop a register of organisations willing to take on the running of children’s centre nurseries by June this year.

Assembly member Victoria Borwick, chair of the committee, said, ‘If we want to give children a good start in life, then we need childcare that is accessible, high quality and fits around families’ needs.

‘We know that for those parents who wish to work, affordable childcare can bring real benefits to their children, especially those from more disadvantaged backgrounds.

‘However, with London families having to find up to £22,000 a year for a full-time nursery place, many parents simply cannot afford to return to work after having children.

‘Many also find the current system of 15 hours free childcare is not flexible enough to fit around their job, particularly if they work long hours.

‘We understand that a great deal is happening to make it easier for parents to access and afford childcare. However, we think that all levels of government should do more so that London parents can work, study or train, and build a better life for their families.’

The committee also recommends that the London Mayor should tackle childcare affordability by improving access to early years education in his education inquiry and by running an information campaign to encourage employers to offer childcare voucher schemes.

Neil Leitch, chief executive of the Pre-school Learning Alliance, said, 'The London Assembly report underlines that early years and childcare providers in the capital must receive more funding through the free early years entitlement to take account of the higher cost of providing childcare there.

'We are not surprised by the report’s findings as earlier this month the National Audit Office report on Delivering the free entitlement to education for three and four year olds found that only one in five local authorities in England knows how much it costs early years settings to provide childcare.

'Today’s report is further support for our call for an independent audit of childcare so that the free entitlement covers the true cost of provision.'

Purnima Tanuku, chief executive of the National Day Nurseries Association, said, 'Government and local authorities must look at the free entitlement funding to ensure it is enough to cover the higher costs of childcare in London.

'A sufficient level of funding will stop nurseries having to increase the costs of paid-for hours to cover the losses they make on the free entitlement. 

'Two-year-old places in London have tended to be funded at a higher rate and if this continues it will help to enable providers in London to meet the challenge of providing for the most disadvantaged children.

'Private and voluntary nurseries have an important role to play and are keen to offer affordable, high-quality childcare for families in London. It is also vital that parents use all the support available to them, such as tax credits, childcare vouchers and free nursery education hours, which can help to make the cost of childcare more manageable.'

Parents’ comments from the survey

‘They (childcare providers) are all really expensive – I actually have to pay to go to work at the moment just to keep my career going.’

‘I am unable to work – not through choice – but because my local salary would not cover the costs of childcare for two children.’

‘My six-year-old went to full-time nursery…[which cost] me over £1,000 per month. With my second son, I decided to give up my job and struggle on my husband’s salary, putting my career on hold because of the extortionate rates you have to pay.’