‘Childcare fees like to rise if energy price cap ends’

A new survey finds the majority of childcare providers think they will have to raise their fees when the energy price cap ends in the Spring.

March of the Mummies protest for childcare reform


Nurseries, pre-schools and childminders in England have warned of further closures and cost rises if energy support is not extended, according to a new survey.

The survey by the Early Years Alliance, based on 1,265 responses from childcare providers, found that nearly seven in 10 (68%) nurseries and pre-schools and three in five (61%) childminders said they are likely to have to increase fees for parents over the next year in order to meet the rising cost of energy if financial support from the government does not go beyond March 2023. More than one in 10 (11%) nurseries and pre-schools and over one in 20 (6%) childminders warned that they would be likely to close permanently.  The report comes after Ofsted revealed that 5,400 childcare providers have closed in the last year.

The energy price caps introduced by the Government in the autumn will end in March, when the government will introduce targeted support for households in need of support and “vulnerable” industries, with details of this support yet to be announced. The poll found that over two-thirds (78%) of childminder survey respondents and four in five (77%) of nursery and pre-school respondents said they did not believe that six months of support was long enough. 99% called for the early years to be included in the government’s list of “vulnerable” business sectors set to receive targeted support beyond the initial six-month period, while 96% of childminders stated that they believed that home-based businesses like childminding settings should be given support for energy costs above and beyond the general energy price guarantee for households.

When asked what steps they have had to take over the past year as a result of rising energy costs, more than three in five (62%) of nurseries and pre-schools and eight in 10 (81%) of childminders said that they have had to reduce energy usage at their setting, while almost half (48%) of childminders and around two-thirds (65%) of pre-schools and nurseries have already had to increase fees for parents to meet energy costs.   A survey by Pregnant Then Screwed released today found that 83% of parents said they have either seen their childcare fees rise in the last two months or anticipate them rising in the next two.

Neil Leitch, CEO of the Early Years Alliance, said:  “Our survey results clearly show that current government support does not go anywhere near far enough to support England’s early years sector through the current energy crisis.

“We’re only at the start of the winter months and already nurseries, pre-schools and childminders have been forced to reduce energy usage, cut costs and raise fees just to keep their doors open.

“We know that, even before the current crisis, many settings were hanging by a thread as they battled through years of underfunding. There’s no doubt that unless more action taken, rising gas and electricity costs could be a nail in the coffin for many more high-quality settings across the country.”

Childcare on the cheap

Meanwhile, a new report by centre right think tank Onward on childcare admits childcare is too expensive, inflexible and complex and is holding back economic recovery. Its polling of over 1,000 parents of children under five found 92% of parents say that childcare costs impact their standard of living. Half say that childcare costs have risen in the last year, but just 9% of parents have been able to cut back on childcare. Nearly a third of families say that childcare is one of their most expensive costs (32%), behind only housing costs (74%), energy bills (75%) and food and drink (66%). Fewer than half agreed that “the amount of support I receive each month makes the costs of childcare manageable” (47%) while 30% say that the costs of childcare have forced them or their partner to consider leaving work to care for their children. 65% of parents not in work agreed with the statement: “The main reason I do not work is because the demands of childcare are too great” versus 16% who disagreed.

Yet the only reform proposed to parents which had net negative support – relaxing staff to child ratios, appears to be the main plank of the Government’s likely response to the childcare crisis. 52% of parents polled opposed the idea that “childcare professionals should be able to look after more children at the same time, as they do in other countries” with only 27% supporting.

The report, Fixing childcare, argues that the childcare system would benefit from greater investment, but says the fiscal situation means further funding is unlikely. It says its recommendations aim to reduces complexity, improve flexibility, strengthen the early years workforce and create a more effective market of providers without incurring extra cost. It includes creating a new system of Childcare Credits for children aged 1-4, paid monthly in advance, with low income families supported with an Additional Childcare Credit; giving parents the option to front-load Child Benefit payments when a child is younger, in exchange for lower payments when the child is older; reforming parental leave by abolishing separate maternity and paternity leave in favour of a single parental leave scheme; expanding Family Hubs; introducing a number of provider side reforms, including boosting childminding agencies and reforming business rates; and incentivising graduates into the early years workforce by extending the Early Career Framework to early years educators and boosting training opportunities for existing practitioners through a centralised system.

The Early Years Alliance says the recommendations, which it calls ‘childcare on the cheap,  “would only provide families with a marginal subsidy towards their early years costs meaning that, even with the proposed means-tested ‘Additional Childcare Credit’ those on lower incomes would have much more limited flexibility and choice when it came to accessing care and education for their children”. Neil Leitch adds: “While we recognise that such an approach would require less spending from government, early years policy should be developed based on what is best for the child, and not just the government’s balance sheet.”

*Picture credit: March of the Mummies protest in October by Shyamantha Asokan.

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