England’s childcare providers warn of substantial fee hikes in 2023

Almost nine in ten nurseries, pre-schools and childminders will have to raise fees this year, with an average planned increase of 8%, a survey has shown.

Nursery baby and carer play at table in daycare centre


Nurseries, pre-schools and childminders in England are warning of substantial increases to fees this year, amid rising costs and low government funding, a new survey by the Early Years Alliance has found.  

Almost nine in ten respondents (89%) are probably or definitely increasing their fees this year, the survey found. The average planned fee increase was 8% amongst those who have not yet raised fees. 

The survey also found that more than a third of early-years childcare providers say it is likely that rising costs will force their setting to close within the next year, with a quarter (25%) describing this as “somewhat likely” and almost one in ten (9%) stating it would be “very likely”.

“The early years sector in this country is in crisis. As our survey findings clearly show, current levels of government funding are nowhere near enough to support the delivery of affordable, sustainable, quality care and education,” said Neil Leitch, CEO of the Early Years Alliance, a membership organisation that represents over 14,000 childcare providers.

“As a result, nurseries, pre-schools and childminders are being left with an impossible choice: substantially increase fees for parents and carers or go out of business altogether.”

UK families pay some of the highest childcare fees in the world, largely because government spending on the early-years sector is relatively low compared to other developed countries.

Prime Minister Rishi Sunak is under increasing pressure to announce more funding for childcare in the upcoming spring budget – in recent weeks business lobby groups and some of his own MPs have called for reforms, turbo-charging the longstanding demands of families, childcare workers and campaigners. 

The survey, which took place online last month and received 1,156 responses from early-years providers, also highlighted the problems with the government’s existing childcare subsidies. 

The state is meant to fund 30 hours of childcare for children aged 3-4, if both parents in a household are working – but 83% of providers stated that the level of government funding they received for this was less than the cost of providing the care. This often left them operating at a loss. 

“With inflation still sky-high, and the national living wage set to increase by record levels in just a couple of months, this situation is only going to get worse unless the government takes urgent action,” Leitch said. 

“It is vital, therefore, that the upcoming spring budget includes a clear plan for the future of early education and childcare in this country, underpinned by the substantial additional investment needed to ensure the sustainability of the early years. The sector simply won’t survive anything less.”  

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