Childcare costs increased in a third of local authorities during pandemic, analysis shows
Fiona Simpson
Tuesday, March 9, 2021
Childcare providers in more than a third of local authorities have increased their prices during the Covid-19 pandemic, market analysis of the sector finds.
Coram Family and Childcare’s 21st annual Childcare Survey reveals that 39 per cent of local authorities in England reported seeing providers in their area raise their prices over the last year.
Meanwhile, 32 per cent reported that some providers have reduced the number of free early education entitlement places they offer and 30 per cent have seen providers increase the number of children looked after by each staff member.
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The research found that on average parents are paying four per cent more for childcare for children under two, and five per cent more for children aged two and above than they were a year ago.
This means that parents are now paying an average of £138 per week - over £7,000 per year - for a part-time nursery place for a child under two, the report states.
It also finds that despite more than a third (35 per cent) of local authorities in England reporting a rise in the number of providers in their area permanently closing in the last year, the majority have not yet seen an increase in shortages of childcare.
More than two-thirds (68 per cent) of local authorities in England reported having enough childcare available to meet demand for parents working full time, compared with 56 per cent last year.
“However, this is most likely to be due to decreased demand from families during the pandemic, rather than increases in the supply of childcare, and it is yet to be seen whether there will still be enough childcare places if and when demand returns to pre-pandemic levels,” the report states.
It also warns that the availability of childcare for certain groups, including older children and disabled children is “little improved on last year”.
Just 14 per cent of local authorities in England reported enough childcare for 12- to 14-year-olds while just a quarter said the area had enough childcare for disabled children.
“These shortages for disabled children exist despite the fact that fewer disabled children are using childcare - a third (31 per cent) of local areas thought that fewer children with special educational needs and/or disabilities (SEND) were using childcare than last year,” the report states.
Coram Family and Childcare is calling on governments in all four UK nations to “fix urgent problems in the system” by:
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Launching a funding review for government-funded early education entitlements to make sure that funding levels are sufficient to support the delivery of high quality education and care, including, but not limited to, issues resulting from Covid-19.
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Reforming Universal Credit so it does not lock parents out of work, by increasing the maximum amount of childcare costs paid under Universal Credit and moving to upfront payments for childcare.
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Extending the 30 hours of funded childcare provision for three- and four-year-olds in England and Wales to families where parents are in training.
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Doubling the early years pupil premium.
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Re-allocating any underspend budget for Tax-Free Childcare to other parts of the childcare system – prioritising the most disadvantaged children.
Megan Jarvie, head of Coram Family and Childcare, said: “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."
Responding to the report, sector leaders have criticised a lack of support for the early years in Chancellor Rishi Sunak’s recent Budget.
Purnima Tanuku, chief executive of National Day Nurseries Association, said: “The main reason for fee increases is to bridge the gap between the funding shortfall between government paid rates and the real costs facing nurseries. Costs like staffing are due to rise again in April when minimum wages increase.
“Parents and families need high quality reliable and flexible childcare – most of which is delivered by private, voluntary and independent nurseries. However, these cannot survive on thin air, they have staff and bills to pay.
“If the Chancellor was committed to doing ‘whatever it takes’ to support childcare providers and working families there would have been more support to the sector in the Budget.”
Councillor Judith Blake, chair of the Local Government Association’s children and young people board, said: “We support calls in the report for a review of the early years system to ensure that investment supports the government’s ambitions and that parents are clear on the best options for their children, as well as shorter term actions such as supporting families on Universal Credit by paying up-front for childcare costs.
“It is essential that we have enough childcare places to support families to ensure the country can recover from Covid-19, both economically and socially.”