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Childcare across London at risk as parents struggle to pay fees: Mayor must act

24 May 2012

London Mayor Boris Johnson is today facing calls from hundreds of childcare providers to tackle the capital’s childcare crisis, as a new survey shows almost half of London’s childcare providers are under financial strain due to parents struggling to pay their childcare bills. 

Over 400 nurseries, childminders, playgroups, breakfast and holiday clubs across every London borough, who between them provide almost 16,000 childcare places, took part in the London Childcare Providers Survey for national childcare charity Daycare Trust. The findings will be launched at today’s London Childcare Providers Forum, where speakers will include Sarah Teather MP, Minster for Children and Families.  The London childcare project is funded by London Councils, and coordinated by Daycare Trust.

44 per cent of respondents said that the ability of parents to pay for childcare was the issue putting the biggest financial strain on their services, ahead of staff costs, rising rents and free entitlement funding. 

Four of the top five policy proposals that they backed in tackling London’s childcare crisis require the Mayor to take action. Providers called on the Mayor to lobby for a reversal of the recent tax credit cut (46%); promote family friendly practice and childcare vouchers (36%); include early years in his education enquiry (31%); and promote a ‘know your rights campaign’ on childcare (26%).

Other key findings of the survey included:

• The top two issues currently facing London childcare providers are parents not being able to afford their fees (51%) and local authority cuts (41%).
• The impact of last year’s cuts to working tax credits is already showing. Whilst the largest reason (83%) providers believed parents were struggling with childcare costs was the recession, 10 per cent blamed the cut in childcare support which has left thousands of families £500 a year worse off.
• Local authority cuts are hitting childcare providers hard – they reported reduced funding from their local authority (68%), reduced training available (65%), reduced general support (55%) and reduced services offered by children’s centres (45%).
• The free entitlement for three and four  year olds and Early Years Professional Status were both strongly viewed as having had a positive impact, with only 16 per cent and 2 per cent of respondents respectively reporting they had had a negative impact.
• Providers overwhelmingly said the factor that would make them most likely to offer free entitlement places for two year olds would be an increased funding rate.  26,000 new places are needed by September 2013 to meet the huge expansion in free entitlement provision for two year olds with a further expansion in 2014. The policy proposal providers backed as most important was a call for central government to adjust the level of free entitlement grant funding local authorities receive according to local costs of provision.

Anand Shukla, Chief Executive of Daycare Trust said:

“ Our research shows that potentially tens of thousands of childcare places in London are at risk, as sustainability is threatened because parents simply cannot afford their fees. This is not a surprise – parents in London pay higher fees than anywhere else in the country, and are being hit hardest by the cuts to childcare tax credits.

“As the Mayor begins his new term of office and sets out plans for the forthcoming four years, childcare providers across the capital are urging him to make childcare a key part of his agenda.

“There is much that the Mayor can do to tackle London’s growing childcare crisis – from standing up to central government against cuts, to working with businesses to promote family friendly practice. Too many parents in London do not access the childcare support they are entitled to. We are urging the mayor to work with providers, local authorities, London Councils and the third sector to change this.

"Not only does high quality affordable childcare bring proven child development benefits, it is crucial in the fight to end child poverty as it enables parents to work. The roll out of free childcare places to two year olds is one of the biggest anti-poverty initiatives in years. It has the potential to benefit tens of thousands of families across London but in order to really do so the Mayor must act to tackle London’s childcare crisis.”

 ENDS.

NOTES TO EDITORS:

1.       The London Childcare Providers Forum takes place on Thursday 24^th May at The Kings Fund, 11-13 Cavendish Square, London, W1G 0AN. Media must accredit in advance – contact Veronica King on vking@daycaretrust.org.uk or 020 7940 7525 / 07796 886 648

2.       For more information on the London Childcare Providers Network visit:http://www.daycaretrust.org.uk/pages/london-childcare-providers-network-lcpn.html

3.       In April 2011 the maximum amount of childcare support available through tax credits was cut from 80% to 70%.

4.       As a result families in London claiming this tax credit have lost on average £15.45 a week.

5.       Figures from April 2011 show that the number of recipients of the childcare element of tax credits in London fell by 5,800 between April 2011 and December 2011. 

 HMRC (2011a) Child and Working Tax Credit Statistics April 2011, available at: http://www.hmrc.gov.uk/stats/personal-tax-credits/cwtc-apr11.pdf

 HMRC (2011b) Child and Working Tax Credit Statistics December 2011, available at:

6.    In November 2010 the Government pledged to extend free early education places to 20 per cent of two-year-olds by 2013. Currently all three and four year olds are entitled to a free place. In his Autumn Statement in November 2011, the Chancellor announced that the government will invest a total of £760m a year by 2014-15 to extend the entitlement to around 40 per cent of two-year-olds. This will reach about 260,000 children nationally, and London will receive disproportionately more funding because of higher levels of child poverty in the capital.

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