Fee hikes expected for childcare

Almost half of childcare providers are to raise their fees, with most citing rises in staff costs and pensions rules, says survey.

Childcare

 

Almost two thirds of providers have increased fees in the last year – and two in five plan to do so in the next year, according to a new survey.

The Early Years Alliance survey, which received over 1,600 responses, found that nine in 10 of providers who planned on increasing fees said it was either entirely or in part because of upcoming increases to the national living and minimum wages.

The Alliance says current government funding levels for early years education are based on a cost analysis in 2015 using data from 2012-’13,  and do not take into account any subsequent cost increases, such as business rate hikes, new employer pension contribution rules and consecutive annual minimum wage rises.

The survey also showed:

  • Over two thirds of respondents (70%) say their funding rate is lower than the cost of delivering the ‘free’ entitlement to three and four-year olds
  • Nine in 10 (88%) warned that, if their funding rate stays the same next year, it will have a negative financial impact on their provision. For two in five providers (44%) the increase in the national and minimum wages may mean they may have to close in the next 12 months
  • Parents returning to work after parental leave could see increased fees – over half of the survey’s respondents (53%) warned childcare prices would also go up for very young children
  • 81% of respondents report worries about financial viability having a negative impact on their stress levels and mental health. Six respondents said they had had thoughts of ending their own life

Neil Leitch, chief executive of the Early Years Alliance, said: “The government has walked the early years sector to a cliff-edge and only the government can pull us back. This survey lays bare just how disastrous government inaction on childcare funding has been: it’s led to increased prices for parents and continues to leave providers with no choice but to close. Beneath these headline figures there are hundreds of stories of people at risk of losing their livelihoods having dedicated their career to giving children the best possible start in life and thousands of families simply being priced out of quality childcare.

“We should be celebrating a pay increase for our dedicated workforce – but for most providers this is just the latest in a long list of mounting costs they are expected to absorb without a corresponding increase in government funding. This simply can’t go on.”



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