Parents choosing between paying for food and childcare as providers forced to raise fees
Katy Morton
Friday, March 25, 2022
One in four parents have had to cut down on necessary expenses such as food and heating to afford childcare, as more than a third of providers reveal plans to further increase fees, according to new research.
The Pregnant Then Screwed and Netmums survey of 26,962 parents with children under the age of five, finds that almost two-thirds of mums and dads are paying more, or the same for their childcare, as they do for their rent/mortgage.
More than 65 per cent of respondents said the cost of their childcare has increased in the last six months. For 32 per cent, the cost of a place has risen between 5-10 per cent.
A separate survey of 1,970 providers by the Early Years Alliance, ran in parallel with the Pregnant Then Screwed parent survey, shows that more than a third are planning on increasing their fees this year because Government funding does not cover their costs. Four in ten said they would be raising fees, but by smaller amounts.
Over a third said they wouldn't be increasing fees at all if they were sufficiently funded.
A total of 30 per cent of settings said they are operating at a loss, while 34 per cent said they expected this to be the case in 12 months’ time.
Of those that have had their funding rate confirmed as increasing for the next financial year, 90 per cent say this will not be enough to cover the cost of delivery.
The survey also reveals the impact of underfunding on the workforce itself:
- 73 per cent of respondents haven’t had a pay rise in two years.
- 15 per cent are currently, or have previously been, in receipt of universal credit.
- 31 per cent are currently in their bank account overdraft.
- Almost half of respondents collectively are thinking about leaving the sector, have confirmed they are leaving, or have already left.
Key findings from the survey of parents include:
- For 43 per cent of mums, the cost of childcare has made them think about quitting their job, while 40 per cent have been forced to reduce their working hours.
- 7 per cent of mums have had to quit their job due to the cost of childcare.
- The majority of respondents said the cost of childcare is making the cost of living crisis ‘even more challenging'.
Pregnant Then Screwed have now launched a campaign, ahead of Mother’s Day on 27 March, to raise awareness of the challenges mothers face when trying to have children and a career. As part of the campaign, #UnHappyMothersDay, a petition has been started demanding an independent review into the issue, which will be delivered to 10 Downing Street.
'Providers are now facing a cliff edge'
Neil Leitch, chief executive of the Early Years Alliance, said, 'It is unacceptable that so many parents are not only struggling to meet their childcare costs, but often are also being forced to make sacrifices in their careers as the result of a lack of affordable, accessible care and education.
'Early years funding has continually failed to keep up with soaring costs, leaving many providers with no choice but to increase fees in the coming year.
'Providers are now facing a cliff edge, but this could all be avoided if the Government finally admitted there is a problem and took action to plug the widening funding gap.’
Joeli Brearley, founder of Pregnant Then Screwed, said, 'Our research with tens of thousands of parents demonstrates that the Government’s approach to childcare just is not working.
'The Government says they care about the cost of living crisis, and have committed to leveling up, but when two thirds of families are paying the same, or more for their childcare than their rent or mortgage and they are skipping meals to be able to afford it, something has gone horribly wrong.
'What is needed is a mind shift in Government. It is abundantly clear that they don’t value childcare - they don’t understand that childcare investment reduces the welfare bill, gets more people into work, improves the skills shortage and has long term benefits for children. They don’t understand that this isn’t just a women’s issue, it’s an economic issue.'
Purnima Tanuku, chief executive of the National Day Nurseries Association (NDNA), said, 'The last thing nurseries want to do is to put up their fees again to parents. But when they are also faced with skyrocketing costs – including a huge jump in minimum wages and having to pay full business rates from April – many have no alternative. If their fees don’t keep pace with rising costs there will simply be no nursery left.
'The Chancellor had an opportunity this week to listen to the sector and cut operating costs by extending business rates. This is an unfair tax on the space nurseries give children to learn, play and develop. This was a wasted opportunity to help mitigate some of these rising costs.'
A Government spokesperson said, 'The early years of a child’s life are the most crucial, which is why we have invested more than £3.5bn in each of the last three years to deliver the free childcare offers, including the 30 hours per week for working parents. We are also investing millions in Family Hubs, where families can access important support services. To support working families more widely, we also recently announced the biggest ever increase in the national living wage since its introduction, from April 2022.'
