Nursery prices up 7%

The average price for a part-time nursery place for a child under two has risen by seven per cent in the last year – more than double the rate of inflation, according to the Family and Childcare Trust’s 17th annual Childcare Survey.

The Trust says the average part-time nursery place now costs £122 per week, or over £6,300 per year. It adds that possible reasons for the price rise include: the introduction of 30 hours free childcare and tax free childcare; the introduction of pension auto-enrolment; rises to the minimum wage; low price rises in recent years; and the generally low level of inflation. Campaigners say underfunding of new government childcare policies like 30 hours free childcare, are leading nurseries to push up prices elsewhere.

The Trust warns that the Government’s childcare schemes may not be able to keep up with the price rises and adds that families with lower incomes and younger children are the ones who are most likely to be squeezed. The highest prices for childcare are for the youngest children between the end of paid parental leave and the child turning three – and that’s when the least financial support is available to parents, says the report.

It adds that lower income families also risk being worse off working more hours. They can get help with childcare costs through the benefits system, but the Trust says the average cost of a full-time nursery place significantly outstrips the maximum support available by £60 each week.

The survey shows prices also vary significantly across the country. In Inner London – the most expensive region in the UK – the price of a part-time nursery place for a child under two is £184 per week, or £9,500 per year, compared to an average £102 per week in the North West, or £5,300 per year.

The survey also reveals that just half of local authorities in England report having enough childcare places for working parents to access their free 30 hours place.

The survey also found continued uncertainty on the local impact of the 30 hour roll out in England. One in five local authorities thought it was having a negative impact on the financial sustainability of childcare settings. However, one in four thought that it would have a positive impact on: the quality of childcare; the availability of childcare for disabled children; and the attainment gap between disadvantaged children and their peers.

Ellen Broomé, Chief Executive at the Family and Childcare Trust, said: “Childcare is as vital as the rails and roads, it supports parents to work, boosts children’s outcomes and provides our economy with a reliable workforce. Too many parents remain locked out of work by high childcare costs and low availability.

New Government investment is welcome, but this year’s childcare price surge shows that without root and branch reform, many families will be left just treading water. The Government need to streamline the current hotchpotch of childcare support schemes. We need a simple and responsive childcare system that makes sure every parent is better off working and childcare quality is high enough to boost children’s outcomes throughout life.”

The survey also found that there were considerable shortages in whether there is enough childcare to meet demand: just half of local areas have enough childcare for parents working full time; 14 per cent have enough for parents working atypical hours; 15 per cent for 12 to 14 year olds; and 22 per cent for disabled children.

The Trust is calling for start-up grants and responsive funding for childcare providers to increase the availability of childcare places and meet the needs of disabled children, increase the money available for those on universal credit, extend the 30 hours offer to parents undertaking training, improve access to early education for disadvantaged children by doubling the early years pupil premium and monitor what effect new funding (tax free childcare and 30 hours) is having on childcare prices and whether it is helping parents into work and narrowing the attainment gap.

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