MPs to investigate childcare costs

The inquiry will examine concerns that the current system of early years entitlements, which is based on parents' earnings and employment statuses, and the Tax-Free Childcare Scheme, is “too confusing and underutilised”.

They cite an Early Years Alliance poll of 20,000 parents, carried out last year, that found almost all believe childcare is too expensive.

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Recruitment and retention problems in the early years sector are also being looked at, with MPs referencing Social Mobility Commission evidence that low pay and social status as well as high work demands are contributing to increased staff turnover.

This week it emerged that 2022 has seen the largest annual decline in the number of childcare providers registered with Ofsted in six years. The regulator warns that the early years sector is struggling to compete for staff, who are opting for “higher paid or more flexible employment.”.

The effectiveness of early years in ensuring children are school ready is another issue to be looked at, as is how well the current system is supporting children with special educational needs and disabilities.

We've launched an inquiry into support for childcare and the early years and we want to hear from you.📢

Send us your submissions by 19 January 2023.🗓️

Read more from our Chair @WalkerWorcester and find out about the inquiry's scope: https://t.co/tAVZPJbwxf

(1/3) pic.twitter.com/9T8ROa5VjD

— Education Committee (@CommonsEd) December 15, 2022

Education committee chair Robin Walker said there is “cross-party hunger to fix childcare”.

“The childcare sector is intrinsically important because it has the potential to allow millions of parents to continue with their careers while giving young children a huge head start in their pre-school education,” he said.

“It’s vital that we identify solutions to the range of problems and challenges facing the childcare sector in England, understand why the costs have become too dear for many families, and see what the government could do to raise the esteem, affordability, and quality of early years education. 

“As many have pointed out, getting this right could be a huge boost for the UK’s productivity and the welfare of its future generations.”

The Committee has issued a call for evidence to be submitted by 19 January 2023.

MPs also reference figures published by Coram Family and Childcare this year showing the average weekly cost of full-time nursery care for a child under two is more than £270.

Meanwhile, this week the Department for Education published figures showing fees charged by providers had increased. The average hourly fee for a child aged under two is £5.68, compared to £5.53 in 2021. 

“With wage bills making up 76 per cent of total costs for nurseries, the 10 per cent increase in minimum wages in April will hit providers extremely hard," said National Day Nurseries Association chief executive Purnima Tanuku.

"The new funding rates must take this and other soaring costs such as food and energy into consideration."

She added: "It’s no surprise that nurseries have seen an increase in the numbers of apprentices, temporary and voluntary staff as they struggle to recruit and retain qualified staff.

"The average nursery has four more children than in 2021 and 16 per cent have more adults to children than the legal requirement in order to give them the support they need.

“As a country we currently invest less per child than Estonia and Slovenia.

"As the funding gap grows between costs and what the government are prepared to pay then providers and families will continue to pay the price.”