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Providers voice concern over rising childcare costs

New survey reveals biggest worry amongst childmiders and nursery managers is parents affording fees

A new survey launched today by childcare charity Daycare Trust has revealed that London childcare providers share the same concerns as parents about rising childcare costs.

The ‘London Childcare Providers Survey', surveyed 430 childcare providers from across London, including private and voluntary sector day nurseries, childminders, nursery schools, pre-schools, crèches, holiday clubs and breakfast/afterschool clubs. The survey found:

• When asked what were the top five issues they currently faced, almost four in ten London childcare providers said parents not being able to afford the fees was a concern (39 per cent).
• Ability of parents to pay for childcare was cited by almost a third (32 per cent) of settings as something which is putting the most financial strain on their service and threatening their sustainability.
• One in three settings cited local authority cuts as one of the top five issues they faced and 13 per cent said direct cuts to funding was an issue.
• The majority of nurseries and preschools (51 per cent) believed that the 15 hours free entitlement for three and four year olds had either had a ‘very positive' or ‘positive' effect on their setting.
• In a continuing trend from last year's survey, settings again reported increased running costs (49 per cent)  and decreased demand for places (46 per cent) as an impact of the recession.

The results will be discussed at tomorrow's London Childcare Providers Forum where over 100 childcare providers from across London will gather to hear from speakers including the Children's Minister Sarah Teather MP.

Anand Shukla, acting Chief Executive of Daycare Trust said:

"A sustainable network of local, high quality and affordable childcare throughout our capital is essential not just for the finances of ordinary working families but also for the strength of the economic recovery.

However, childcare costs in London are the highest in the UK and now childcare providers are joining parents in speaking out against this.

The recent cut to the amount of childcare support available through tax credits means that childcare is becoming even less affordable -  indeed, some of the providers from our survey specifically singled this out as an issue which was a particular concern to them.

When the high cost of childcare is already having such a major effect on both parents and childcare providers, the Government's current Universal Credit proposals, which will slash childcare support, threaten to be a hammer blow to the prospects of the childcare sector. If the government truly wants a flexible labour market and for welfare reform to make work pay for parents, it needs to think again about the support it provides to parents for childcare costs."

ENDS

NOTES TO EDITORS

1. The London Childcare Providers Survey and Forum are an annual part of the London Childcare Providers Network project. The network is funded by London Councils, and coordinated by Daycare Trust, in collaboration with the Pre-school Learning Alliance.For more information, visit www.daycaretrust.org.uk/london
2. The London Childcare Providers Survey was carried out via an online survey during May 2011. Responses were received from 430 childcare providers, across London. Providers taking part in the survey included childminders, nursery schools, pre-schools, crèches, holiday clubs and breakfast/afterschool clubs.
3. According to Daycare Trust's 2011 Childcare Costs survey, the average price of 25 hours a week nursery care for a child aged two and under in London is £6,000 a year - which is £1000 above the British average.
4. From April 2011, the amount of childcare costs covered through working tax credits was reduced from a maximum of 80 per cent to a maximum of 70 per cent, which could mean a loss of up to £1500 for a parent with two or more children.
5. Currently parents can claim help through tax credits for eligible childcare costs of up to £175 per week for one child and £300 for two or more children. The Government's Welfare Reform Bill is currently passing through Parliament. It proposes to extend support for childcare in the new Universal Credit to parents working fewer than 16 hours per week, but the budget for childcare will remain the same. This means that the Government will need to reduce either the percentage of costs covered or these upper limits. One of the options under consideration will see up to 70 per cent of costs covered but only up to £125 for one child or £210 for two or more children. Daycare Trust is concerned that this will damage work incentives and force many parents to give up work.
6. London Councils commissioned research from the Centre for Economic and Social Inclusion, which was published in June 2011, found that "London lone parents with two children will be over £5,000 a year worse off under Universal Credit if in a full time job on minimum wage, using childcare, than under the 2011 system."  

To obtain copies of the survey or to arrange case studies or interviews contact press office at Daycare Trust on 020 7940 7525 (out of hours 07796 886 648).

ABOUT DAYCARE TRUST

Daycare Trust is the national childcare charity, campaigning for quality affordable accessible childcare for all and raising the voices of children, parents and carers.  We advise parents and carers, providers, employers, trade unions and policymakers on childcare issues.  We recognise that everyone is unique and we value difference in our communities.  We listen to all views and are committed to act without prejudice. 

Daycare Trust runs an Information Line  on 0845 872 6251, open Monday, Tuesday, Thursday and Friday 10.00am-1.00pm and 2.00pm-5.00pm, Wed 2.00pm-5.00pm (only). Parents can also visit http://www.daycaretrust.org.uk/ and http://www.payingforchildcare.org.uk/ for information.

Daycare Trust is a member of the Campaign to End Child Poverty, http://www.endchildpoverty.org.uk/.

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