You are here: News Childcare costs rise by 4% over the last year as providers struggle to remain sustainable during the pandemic

8th March 2021
By Hannah May Parlett

Britain’s parents are paying 4% more for childcare for children under two, and 5% more for children aged two than they were one year ago, according to the country’s most comprehensive annual survey of childcare costs, published today. Coram Family and Childcare’s 21st annual Childcare Survey finds that parents have faced childcare costs rising well ahead of inflation, and are now paying an average of £138 per week - over £7,000 per year - for a part-time nursery place for a child under two.*

The Childcare Survey 2021 reveals the early impact of Covid-19 on the childcare market and families. Childcare providers are struggling to remain sustainable during the crisis, with 39% of local authorities in England seeing providers in their area raise their prices over the last year, and 32% reporting that some providers have reduced the number of free early education entitlement places they offer. Furthermore, 30% have seen providers increase the number of children looked after by each staff member.

Despite over a third (35%) of local authorities in England reporting a rise in the number of providers in their area permanently closing in the last year, the majority have not yet seen an increase in shortages of childcare. Over two-thirds (68%) of local authorities in England reported having enough childcare available to meet demand for parents working full time, compared to 56% last year. However this is most likely to be due to decreased demand from families during the pandemic, rather than increases in the supply of childcare, and it is yet to be seen whether there will still be enough childcare places if and when demand returns to pre-pandemic levels.

In addition, availability of childcare for certain groups is little improved on last year, with less than one in four local areas in England reporting enough childcare for 12 to 14 year olds (13%), parents working atypical hours (16%) and disabled children (25%). These shortages for disabled children exist despite the fact that fewer disabled children are using childcare - a third (31%) of local areas thought that fewer children with special educational needs and/or disabilities (SEND) were using childcare than last year.

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.”

The Childcare Survey 2021 sets out actions that Scottish, Welsh and UK governments can take in the short-term to fix urgent problems in the system:

  • Launch a funding review for the free early education entitlements to make sure that funding levels are sufficient to support the delivery of high quality education and care, including, but not limited to, issues resulting from Covid-19.
  • Reform Universal Credit so it does not lock parents out of work, by increasing the maximum amount of childcare costs paid under Universal Credit and move to upfront payments for childcare.
  • Extend the 30 hours free childcare provision for three and four year olds in England and Wales to families where parents are in training, to help boost their employment opportunities. ● Double the early years pupil premium, to boost outcomes for the most disadvantaged children.
  • Re-allocate any underspend budget for Tax-Free Childcare to other parts of the childcare system – prioritising the most disadvantaged children.

-ENDS-

For a copy of the full report, comment and case studies, please contact Emma Lamberton, Communications Manager, Coram at emma.lamberton@coram.org.uk / 07908 827908.

Full report
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Notes to Editors 

  • Coram Family and Childcare’s annual Childcare Survey and Holiday Childcare Survey are the definitive reports on childcare costs and availability in the UK.
  • The Childcare Survey 2021 is based on surveys from local authorities in England, Scotland and Wales, that were returned to Coram Family and Childcare between November 2020 and January 2021. A total of 180 local authorities returned data generating a response rate of 91%. Full methodology can be found at the end of the report.
  • *There is substantial variation in childcare costs across the regions, with the highest costs seen in inner London (£179.86 per week for a part-time nursery place for a child under two), 57% higher than the lowest costs seen in Wales (£114.76 per week). The full regional breakdown of costs is outlined in the table below.

About Coram Family and Childcare

Coram Family and Childcare works to make the UK a better place for families by bringing together what we learn from our on the ground parent-led programmes and our research to campaign for solutions that parents want and need. We focus on childcare and early years to make a difference to families’ lives now and in the long term. Before August 2018, we were known as the Family and Childcare Trust.

About Coram

Coram is the UK’s oldest children’s charity, supporting children to have the best possible chance in life since 1739. We work as a group of specialist organisations helping more than a million children, young people, families and professionals every year. We support children and young people from their earliest days to independence, creating a change that lasts a lifetime. We help build their confidence; we help them to develop skills; we uphold their rights, we support practitioners in the areas of fostering and adoption and we find loving adoptive families for the most vulnerable children. We work in over 2,000 schools supporting nearly half a million children, run London’s largest Regional Adoption Agency and provide free legal advice for thousands of children and families who need it every year. 

 

 

 

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