Analysis shows potential funding shortfall for parents for ‘free childcare’

Analysis by the Lib Dems shows the postcode lottery in terms of funding shortfalls for ‘free’ childcare for three and four year olds.

Child playing with toys whilst in chilcare


Parents could face paying £19.50 a week on average, or over £1,000 a year, to fill the childcare funding gap between what the Government pays for the 30 ‘free’ hours of childcare for three and four year olds and the fees charged by nurseries, according to analysis of Department for Education figures by the Liberal Democrats.

It finds 85 per cent of councils currently have a shortfall, and some have a bigger shortfall than others.  They include North Somerset where the analysis shows parents face the prospect of paying an extra £70.80 a week for every child in nursery, followed by Brent, north London, at £69.90 a week. The Lib Dems say their analysis shows parents in nine local authorities could face having to pay £45 or more per child per week to cover the deficit. It is unclear whether the local authority passes the full costs on to parents or absorbs it themselves.

They are urging the Government to review the rates paid to providers to ensure they cover the actual costs of delivering high-quality childcare and early years education.

Liberal Democrat education spokesperson Munira Wilson said: “If the government wants to boost the economy then it must tackle the gaping hole in childcare costs. The Autumn Statement next week must address this or else families and ultimately the economy will continue to suffer.

“The UK already has some of the highest childcare costs in the world. Parents up and down the country are struggling to afford their nursery fees, while for others the crippling costs of childcare mean they simply can’t afford to return to work.

“There is a huge crisis looming with both nurseries and local councils warning of a collapse if the Government doesn’t come forward with proper funding.”

Neil Leitch, chief executive of the Early Years Alliance, said: It is extremely concerning, but sadly not at all surprising, that families have had to pay almost £1,000 per year to access so-called ‘free’ entitlement places.

“If the government is as serious about tackling the rising cost of early years places as it claims to be, it simply must ensure that both existing and upcoming early entitlement offers are properly funded. This is the only way to guarantee that families will be able to access affordable – and high-quality – early years places both now, and long into the future.” 

Meanwhile, a new survey from Pregnant Then Screwed finds that the majority of mothers who are cutting their maternity leave short are doing so due to financial hardship, with just one in four mothers able to take their full maternity leave entitlement.

The research from a sample of over 5,165 mothers who are at least 20 weeks pregnant or have a child under 12 months, also found one in 10 need to return to work as early as four months or less because they cannot afford to stay off any longer.

This is corroborated by other research, including Timetastic’s annual leave statistics for 2022/23 which show the average working mum books off just 11 weeks of maternity leave. This has long been an issue, with a poll in 2014 showing 62% had taken less than the full year off due to low levels of maternity pay.

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