Rapid rise in childcare costs for working parents

The rise in childcare costs has outstripped inflation and many providers face an uncertain future. Which is bad news for working parents

Toddler plays with multicoloured bricks in childcare setting


Childcare costs have shot up in the last year. Parents now spend over £7000 a year on average on childcare.

The rise in childcare costs has outstripped inflation. Prices for children under two jumped 4% year on year. For parents of older children the rise in childcare costs was even worse. Costs rose 5% for that age bracket. Inflation is currently below 1%. That represents increasing expense for working dads and mums already having to deal with the economic impact of coronavirus.

The figures come from Coram Family and Childcare’s 21st annual Childcare Survey. Parents are paying an average of £138 per week – over £7,000 per year – for a part-time nursery place for a child under two.

Future of childcare

The survey shows childcare providers are struggling to remain sustainable during the Covid crisis. Nurseries and other childcare settings raised their prices in two out of every five local authorities areas. Many providers have reduced the number of free early education entitlement places they offer. Staff to children ratios have also increased.

Over a third (35%) of local authorities in England reported a rise in the number of providers in their area permanently closing in the last year. Buyt the majority have not yet seen an increase in shortages of childcare. Over two-thirds (68%) of local authorities in England reported having enough childcare available to meet demand for parents working full time, compared to 56% last year. This is most likely due to decreased demand from families during the pandemic, rather than increases in the supply of childcare and Coram says it is yet to be seen whether there will still be enough childcare places if and when demand returns to pre-pandemic levels.

It adds that availability of childcare for certain groups is little improved on last year. For example, only one in seven local areas in England report having enough childcare for 12 to 14 year olds. Just a quarter said there’s sufficient childcare for disabled children in their area.

‘The system simply isn’t working’

Megan Jarvie, Head of Coram Family and Childcare, said, “The pandemic has reminded us all of the vital importance of childcare, in enabling parents to work, boosting children’s learning and narrowing the gap between disadvantaged children and their peers. However, the crisis has also exacerbated the issues that exist in the sector. 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. Financial support from the Government has helped childcare providers to stay afloat. But we don’t know what the effects will be when this support ends. We’re calling for the Government to take urgent steps to improve the system now and in the longer-term so that every child can access the high quality childcare that supports their early development.”

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