Figures reveal childcare bills 'freezing parents out of work'

Eye-watering costs of childcare is stopping some parents being able to return to work, as ITV News Political Correspondent Harry Horton reports

More families across England are struggling to find childcare places - with gaps in provision and skyrocketing costs freezing them out of work, a charity has warned.

Parents are facing increasingly higher prices, leaving disadvantaged children “at risk of missing out”, according to Coram Family and Childcare's latest annual survey.

Fewer than one in five (18%) local authorities in England report having enough childcare places for disabled children, down from 21% last year, according to Coram.

The charity's survey found the average price of a part-time childcare place (25 hours) a week for a child aged under two in a nursery is now £148.63 across Britain – and it is even higher in England (£150.89).

High costs are “freezing parents out of work” and gaps in availability are “leaving disadvantaged children at risk of missing out”, according to the charity’s report.

The report is based on surveys from local authorities in England, Scotland and Wales that were returned to the charity between November 2022 and February 2023.

Overall, 191 local authorities returned data. Only half (50%) of local authorities in England reported sufficient childcare places for children under two, compared to 57% in 2022.

The survey also reveals that the number of local authorities in England who report having enough places for the universal 15 hours a week free childcare entitlement for three and four-year-olds has dropped, from 79% last year to 73% this year.

The report calls the drop in sufficiency of early education entitlements “especially concerning”.

It says: “Early education holds the potential to narrow the achievement gap between disadvantaged children and their peers, and has since it was implemented – helping to achieve just that.

"At a time when this gap is widening, it is vital that every child is able to access the high quality education and care that sets them up to learn at school and beyond.”

Ahead of next week’s Budget, the charity is calling on the government to reform the childcare system to ensure a place is guaranteed for every child who needs it and parents only pay what they can afford.

Megan Jarvie, head of Coram Family and Childcare, said: “The need for reform of the childcare system is urgent. As well as eye watering bills, parents are facing widening gaps in availability of the childcare they need.

“As the Chancellor decides his budget, we urge him to recognise the value of investing in childcare – it is a wise investment, enabling parents to work and boosting the outcomes of young children.”

On Thursday, shadow education secretary Bridget Phillipson said reforming the childcare system would be her “first priority in government” if Labour wins the next general election.

Ms Phillipson used a speech af think tank Onward to say that Labour will not spend taxpayers’ money on the Conservatives’ “jerry-built” system of free hours of childcare as an analysis by the party suggests the cost of childcare is more expensive now than before free hours of childcare were introduced.

Her speech comes as the National Day Nurseries Association (NDNA) has published new survey findings which show that 98.4% of nurseries in England say their funding rates do not cover delivery costs.

The NDNA survey, of 477 nurseries in England in January and February, found that 83% of nurseries are expecting to make a loss or only break even.

Purnima Tanuk, chief executive of NDNA, said: “We will see more childcare providers struggling to survive once all the cost increases come on board in April.

“The Government must acknowledge the full extent of this crisis and begin to meaningfully support the early years sector before it’s too late.”

A government spokesperson said: “The number of childcare places available to families in England has remained broadly stable since 2015 and standards remain high, with 96% of providers rated good or outstanding.

“We recognise that families and early years providers across the country are facing financial pressures, which is why we have spent more than £20 billion over the past five years to support families with the cost of childcare.

“This Government has also doubled the entitlement for working parents of 3 and 4 year olds to 30 hours and introduced 15 free hours a week for disadvantaged two-year-olds.”

Parents petition government

Campaign group Pregnant Then Screwed (PTS) will be delivering a letter signed by over 50,000 parents to Rishi Sunak, and Jeremy Hunt today at 2.12pm to urge them to invest in early years education and care in the upcoming Spring budget. 

Joeli Brearley, founder of PTS, said childcare and early years education had been "neglected" by the government - forcing parents to pay rocketing bills."Our research found that for three quarters of mothers it doesn’t make financial sense for them to work, with prices set to increase further, we will see more parents forced out of their jobs and into poverty. This isn’t a ‘mummy issue’ this is an issue for the whole of society - it contributes to the skills gap, it inhibits economic growth, and it ensures only the very wealthy can access early years education for their children thereby entrenching inequality.''

Ms Brearley urged the government to address issues in accessing childcare for disabled children, saying "a lack of childcare undoubtedly exacerbates economic inequalities between families of disabled and non disabled children.'' 

She added: ''If parents cannot afford or cannot access the childcare they need then we cannot rebuild our economy. Despite years of campaigns, reports, protests and letters, there is still no plan or strategy to deal with this issue, meanwhile the situation is drastically deteriorating. "The solution is staring the government in the face - invest in childcare and early years education, and enable both children and the economy to flourish.''

Just last week, new research from PTS revealed that 75% of mothers who pay for childcare, say it no longer makes financial sense for them to work.

One in 10 parents said their childcare costs were the same or more than their take-home pay per day, and for one in 5 parents, childcare costs amounted to more than half of their household income. Another 54% of parents who use either formal or informal childcare said they had to reduce the number of hours they work due to childcare cost or availability.

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Neil Leitch, CEO of the Early Years Alliance, said the system was "broken."

"Years of underfunding has forced providers to raise fees, limit hours, and cut places or risk going out of business. Meanwhile, rising costs have left many parents – and particularly mothers – with no choice but to sacrifice their careers, while putting children at risk of losing out on vital learning and development opportunities – and all because funding for the so-called ‘free childcare’ offers has failed to keep up with rising costs.

“How many more families will be priced out of the early years system before the government admits there is a problem? How many more providers will be forced to permanently close for ministers to accept that the only way to improve the affordability and availability of early education and care is to fund the sector properly?

“The situation facing families and providers is nothing short of a disaster. It is absolutely vital, therefore, that the government commits to fully-funding the early years in the upcoming budget –  anything less it risks the complete collapse of the sector.”