Childcare costs increase as providers struggle with pandemic

By Rachel Lawler

The cost of childcare is increasing, as providers struggle to remain sustainable in the ongoing pandemic, according to the latest figures from Coram Family and Childcare.

On average, childcare fees have risen 4% for children under two and 5% for children over two, compared to statistics from 2020. Parents are paying an average of £138 a week for childcare for a part-time place for child under two.

Higher fees and increased closures
The charity’s Childcare Survey 2021 revealed that 39% of local authorities have seen providers in their areas raise fees while 32% have seen fewer providers offering funded places.

35% of local authorities reported an increase in the number of providers permanently closing in the last year, but the majority did not report an increase in shortages of childcare – this is perhaps due to a decrease in demand during the pandemic.

Supporting families
Megan Jarvie, head of Coram Family and Childcare, said: “The pandemic has reminded us all of the vital importance of childcare, in enabling parents to work, boosting children’s learning and narrowing the gap between disadvantaged children and their peers. However, the crisis has also exacerbated the issues that exist in the sector. For too many families the system simply isn’t working, and they are left struggling to make work pay after childcare costs or are forced out of the workplace entirely.

“There remains a risk that many providers could close, leaving more families struggling to find the childcare that they need, or that costs could further increase, at a time when family finances have already been stretched by the pandemic. Financial support from the Government has helped childcare providers to stay afloat, but we don’t know what the effects will be when this support ends. We’re calling for the Government to take urgent steps to improve the system now and in the longer term so that every child can access the high-quality childcare that supports their early development.”

Funding rate review
Coram Family and Childcare has called on the UK governments to review funding rates for early education entitlements to ensure that they are sufficient to support quality education and care, taking into consideration the impact of Covid-19.

The charity is also calling for Universal Credit to be reformed so that it does not “lock parents out of work” by moving to upfront payments for childcare and increasing the maximum amount of costs paid for.

Coram Family and Childcare is also calling for the 30 hours offer to be extended to families who are in education/training, for the early years pupil premium to be doubled and for the Tax-Free Childcare underspend to be reallocated to the rest of the childcare system.

The cost of covid
Neil Leitch, chief executive of the Alliance, commented: "It is no surprise to see the cost of childcare continue to rise above inflation, as providers struggle with increased covid-related costs such as cleaning, overtime and staff absences – with no additional help from government. Added to insultingly low levels of early entitlement funding and a continued fall in the demand for places, it's clear that many nurseries, pre-schools and childminders will have had no choice but to pass these costs on to parents.

"The government continues to ignore widespread calls to base early years funding on pre-pandemic attendance levels during the spring term, but with 35% of local authorities reporting an increase in closures, and attendance still low, it's clear that this decision must be urgently reversed. Given the significant and ongoing underspend on the tax-free childcare scheme, there is no doubt that the government has the financial means to provide the support the sector so desperately needs, should it choose to do so.

"If ministers fail to step up and invest what is needed to protect the sector, there is no doubt that more providers will be forced to close, putting the ability of parents to return to work and in turn the recovery of our national economy, as well as children’s vital early development at risk."

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