The cost of a nursery place for a child aged two and over has risen by 5.1 per cent, and by 4.8 per cent for a child under two.
The average cost for a full-time (50 hours per week) nursery place in England for a child under two is £176 a week.
An average parent in England working part-time can expect to spend more than half their wages before tax on a nursery place for a child under two, the survey revealed.
The gap between the cost of childminders and nurseries is narrowing, with costs for childminders rising by 9.2 per cent for a child aged two and over and by 6.4 per cent for a child under two.
In London, childminders charge on average £104 a week for a child under two – just £5 less per week for a nursery place for a child of the same age.
While costs for nurseries in London and the south-east remain higher than elsewhere, they have not risen as much in the past year as elsewhere in England.
In the East Midlands and Yorkshire and Humber there was a 23.5 per cent and a 12.9 per cent rise respectively in nursery costs for children aged two and over.
The average cost of an out-of-school club place in England has risen by 12.5 per cent.
The findings also revealed a shortage of childcare across the UK – 58 per cent of family information services said that parents had reported a lack of childcare in their area, and in Wales this was 69 per cent.
Half of local authorities said there was insufficient childcare provision for disabled children and older children.
The Daycare Trust’s ninth annual childcare costs survey is compiled from figures from the Family Information Services in England, Scotland and Wales. It analyses by region the cost of childcare for childminders, nurseries and out-of-school clubs for 25 hours a week.
In the run-up to the general election, the Trust is urging all political parties to keep childcare high on the political agenda and has made a series of key police recommendations.
They include raising the proportion of childcare costs that the poorest parents can claim through tax credits to 100 per cent, extending the free entitlement for all two-, three- and four-year-olds to 20 hours a week by 2020, and more out-of-school provision.
The Trust’s chief executive Alison Garnham said, ‘Over the last year, families across the UK have been hit hard by the impact of the recession, with parents facing the strain of losing jobs, having their hours cut back or facing pay cuts – all of which is compounded further by childcare costs shooting up.’
‘The difference that high-quality, affordable childcare makes to a child’s future, to family life and to reducing child poverty cannot be underestimated. For so many families, this is the kind of family support they need.
‘We know that whatever the outcome of the election, there are tough spending choices to be made. However, we hope that all parties will recognise what a central issue childcare is for parents, and take up our policy recommendations as they build their manifestos.’
Children’s minister Dawn Primarolo said, ‘The Daycare Trust report rightly highlights the huge investment the Government has made in early years provision. We will not let the improvements this has created slip away during difficult economic circumstances. Local authorities are responsible for ensuring there are sufficient early years places in their area and we want all families to have access to good quality and affordable childcare. We will continue to target financial support for childcare at the families most in need.’
Early years sector response
'Nurseries themselves are very aware of the struggles parents face and are working hard to keep increases to an absolute minimum, with many barely breaking even. Coupled with issues with Government funding for free funded sessions, many nurseries are finding it extremely difficult to balance the books. Although the average rise of 5.1 per cent sounds high, it is important to consider the reason for this. The average hourly rate of nursery care for an under-two is £3.52, which includes high staff to child ratios, equipment, food and snacks, plus this also has to make a contribution to the large range of running costs such as rent, business rates and utilities. Nurseries are working hard to achieve the Government vision of a highly qualified nursery team with graduate leadership, but are finding it hard to reward them without passing some of the cost to parents. We agree that more help is to be welcomed for parents, but equally the Government needs to look at more investment in nurseries so that they can pay their staff the wages they deserve without making childcare unaffordable for parents.'
Purnima Tanuku, chief executive of the National Day Nurseries Association
‘We support the Daycare Trust’s recommendations that Government ensures the availability of affordable childcare, particularly for those parents struggling to access places, such as families with disabled children, or those living in areas of deprivation.
‘We know from our own research that many childminders are finding it challenging to sustain their business, with fees often including costs for outings, meals, nappies and other expenses. Our latest data shows 47 per cent of childminding businesses turnover less than £7,000 per year and many don’t even manage to break even.
‘Sustainable childcare is necessary to ensure consistent provision is available for families who need it. Addressing challenges of sustainable, affordable childcare requires a co-ordinated approach from Government at a national and local level, with increased investment essential across the sector.’
Andrew Fletcher, joint chief executive of the National Childminding Association
‘It is a major concern that childcare costs have risen so emphatically, especially as the UK is only now starting on the road to economic recovery. While it is important to recognise this Government’s significant progress in making childcare a higher priority than ever before, it must take heed of these findings and find a solution that helps struggling parents without threatening the sustainability of providers.
'Our recent survey of Alliance members indicated sustainability remains the number one issue faced by the early years sector. Childcare costs are already among the highest in Europe, and these results hit home the very real long-term concern that a reduction in demand will fall on already hard-pressed providers.
‘With an election looming, it is essential that all political parties recognise the importance of investing in the sector and ensuring that providers can keep delivering a real choice of affordable, high quality and accessible childcare for all parents that need it.’
Neil Leitch, acting chief executive of the Pre-school Learning Alliance
