The most expensive nursery was in the West Midlands and charged parents £11 an hour. This means that parents could pay £28,600 a year for 50 hours a week.
London and the south-east of England are still the most expensive areas of Britain for childcare.
The average cost for a child under two in the capital for 25 hours a week is £118.54 a week or £6,164 a year.
Childcare is cheapest in the north-west, where the same number of hours is £82.70 a week, the equivalent of £4,300 a year.
The survey, now in its tenth year, is compiled from figures provided by Family Information Services.
The report also highlights a shortage of childcare places, with 60 per cent of FIS reporting a lack of available childcare in their area and only 11 per cent of local authorities providing enough childcare for disabled children.
The Daycare Trust is calling on local authorities to prioritise early years and childcare services when finalising their budgets in the next few weeks and ensure that the entire Sure Start budget is spent as intended and that funding from the Early Intervention Grant should go to helping families pay for childcare.
Anand Shukla, acting chief executive of Daycare Trust (pictured), said, ‘When parents sit down to calculate their family finances and see childcare costs increasing far faster than their wages, it is no wonder they may think twice about the economic sense of staying in work. These high, rapidly rising costs are particularly significant given the number of people not receiving cost of living pay increases this year, the increase in VAT, and rising costs of other household goods, particularly food and fuel.’
He added that he was also concerned about how the reduction in the childcare element of the Working Tax Credit from covering up to 80 per cent to up to 70 per cent of childcare costs would affect low-income families.
‘Once this change comes into place, some families will effectively have an extra £546 a year added to their childcare bill. Yet parents in the UK already spend an average of one third of their net income on childcare costs - more than in any other OECD country.’
'Under-funding' for free entitlement
Purnima Tanuku, chief executive of the National Day Nurseries Association, said that nurseries understood the costs parents faced and were trying to keep their fee increases down. But she pointed out that they too were faced with financial pressures.
One in three nurseries had frozen staff salaries to try and keep fees affordable, she said.
Ms Tanuku also said that nurseries are impacted doubly by the VAT rise, not just on purchases but also because they cannot offset any additional expense because childcare is VAT-exempt.
‘Although nurseries shop around for the best deals when costs on areas such as utilities rise, they have little choice but to pass some of the costs to parents.
'However, under-funding issues with free nursery education have also contributed to the average rise of 4.8 per cent.
'Costs are on the up for settings, but the gap between the costs of delivering funded places and the money received continues to widen. Feedback from some local authority areas piloting the Early Years Single Funding Formula show that in some cases, providers will face a decrease in funding.
'Our research has identified that on average, nurseries are losing 98 pence per child per hour. For a nursery providing free sessions for 40 children, this is an average loss of £22,000 per year. Nurseries have to make this money up somehow to remain open, and some find the only way is to subsidise the loss by increasing fees outside of free nursery education hours.’
She added, ‘NDNA also believes that the Government must look at how childcare can be made cheaper at the point of delivery by streamlining the assistance that is out there and looking at protecting tax credits for childcare by making payments directly to nurseries.’
Liz Bayram, joint chief executive of the National Childminding Association, said, ‘It is concerning that many families are facing difficulties in finding affordable childcare, particularly those with disabled children or living in areas of deprivation. Evidence from our own membership survey shows that more than a third of registered childminders are trained to care for disabled children, and many have unwanted vacancies.’
