Report charts rising childcare costs and sharp falls in availability

Childcare costs are increasing while availability is falling sharply affecting parents ability to work, particularly full time, according to a new report which calls for an increase in the maximum amount of childcare costs paid under Universal Credit along with support for upfront costs and extending eligibility of the 30 hours provision.

Coram Family and Childcare’s 21st annual Childcare Survey finds that parents are now paying 2.5% more for childcare for children under two; 2% more for children aged two; and 3.5% more for three and four year olds than they were a year ago.

It also shows that childcare availability has fallen sharply as the sector grapples with ongoing uncertainty and disruption. Only 57% of local authorities now report having enough childcare places available for children under two, down from 72% in 2021, and only 59% report having enough childcare available for parents working full time, down from 68% last year – limiting many parents’ ability to work.

The report also finds increasing gaps in childcare for children with special needs, with only 21% of local authorities having enough childcare, down from 25% in 2021. Similarly, availability of the two-year-old free entitlement and the three-and-four-year-old 15-hour entitlement has dropped by 9% and 3% respectively, hitting the most disadvantaged children and families the hardest.

The Childcare Survey 2022 also reveals that the number of children accessing early years entitlements has plummeted. Some 38% of local authorities have seen a drop in the number of children using the free entitlement for disadvantaged two year olds.

Some 40% of local authorities have also seen a decrease in the uptake of the three-to-four-year-old free early education entitlements. The free entitlements have been shown to narrow the attainment gap between children from disadvantaged backgrounds and their more affluent peers, but the impact of the pandemic and the drop in uptake means that this gap is beginning to widen again, reversing years of progress.

There are significant regional disparities across England both in terms of cost and availability of childcare. In the East of England only 29% of local authorities report having enough childcare for children under two, while the figure was 100% for the North East. The price for 25 hours of nursery childcare for those aged under two is 50 per cent higher in inner London (£183.56) than in Yorkshire and Humberside (£122.17).

Coram Family and Childcare says the pandemic continues to significantly impact childcare. Some providers are struggling to remain sustainable with 14% of local authorities reporting that at least a quarter of their group-based providers are facing severe financial difficulties and that 17% are saying that at least a quarter of their childminders are experiencing the same challenges.

Nearly two-thirds (57%) of local authorities have seen childcare providers raise their prices and 30% say providers have increased the number of children looked after by each staff member. Thirty per cent of local authorities think that quality has reduced since the pandemic. Moreover, 94% of local authorities say they are struggling to find staff with the required qualifications and experience, with most saying it is ‘very difficult’. A third of local authorities also reported seeing an increase in permanent closures of childcare settings compared to last year.

Ellen Broomé, managing director of Coram Family and Childcare, said:  “We are disappointed that amid an ongoing cost of living crisis, and off the back of a pandemic which has severely impacted children’s life chances, the Government has again refused to review childcare funding and availability. Many parents, up and down the country, will be locked out of work or struggle to make ends meet as childcare prices continue to go up and the availability of places goes down. And the more vulnerable children will miss out the most on this boost to their development and outcomes.

High quality childcare is key social infrastructure, it helps parents work and narrows the gap between poorer children and their more affluent peers. With families’ bills skyrocketing, as Chancellor stands up to present his Budget, we urge him to make sure that childcare and children’s life chances are at the very heart of his announcements.”

The report makes the following recommendations to address immediate pressures, but says that there is a need for radical and ambitious reform of the sector:

• the extension of eligibility of 30 hours provision locally – at a minimum to parents in training, education, to single parents and families with no recourse to public funds.
• the reform of Universal Credit so it does not lock parents out of work – by increasing the maximum amount of childcare costs paid under Universal Credit and guaranteeing support for upfront childcare costs.
• the doubling of the early years premium to boost outcomes for the most disadvantaged children.
• moves to ensure the National Tutoring Programme is reaching primary schools – with a wraparound childcare offer to boost take up.
• the re-allocation of the ongoing underspend from Tax-Free Childcare to other parts of the childcare system with a focus on low-income families.
• the extension of the 30 hour free entitlement to all three and four year olds.

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