Childcare Costs Rocket Above Inflation Rate

The Daycare Trust and the Family and Parenting Institute's Childcare Costs Survey 2013, shows nursery, childminder and after-school club costs all rising at more than 6%,more than double the inflation rate (2.7%).

Increases across the country put this everyday necessity into the luxury bracket. A place at Britain’s costliest nursery this year (£42,000) costs 25% more than a place at a top public school such as Charterhouse (£30,574 a year).

The survey spotlights a particular problem with care for school-age children. Here, parents pay nearly £4,000 for two children to be looked after before and after the school day. A typical family holiday in Florida, including flights, costs under £3,000.

These rampant price rises come in a year when, in recession-hit Britain, average wages have stagnated. The position is more acute for families on lower incomes, who have already been hit by a 10% drop in support for childcare through the tax credit system and face tax credit rises pegged well below inflation at 1%.

Finding affordable, high-quality childcare, although a necessity for most parents, has long been a problem for families in Britain. Daycare Trust and the Family and Parenting Institute’s survey shows how much worse things have become. A nursery place now costs 77% more in real terms than it did in 2003, but in real terms earnings have stayed still. In 2003, average median earnings in real terms were £11.24 an hour in 2003, and in 2012 they were £11.21.

Anand Shukla, Chief Executive of Daycare Trust and the Family and Parenting Institute said: "Childcare is as essential as food and heating for working families. Yet while wages stay still and childcare becomes more expensive, it’s increasingly difficult for parents – and mothers in particular – to make work pay.

"We are particularly concerned that the steepest price increases this year – at 9% - is in childcare for school-age children, which is as important as care for the under-fives care in allowing parents to work.

"We know that the Government wants to reduce the cost of childcare to parents. But we are deeply concerned about proposals to relax ratios because this risks compromising quality, safety and children’s development. We urge the government in this year’s Budget to find ways to support parents with the costs of childcare – without compromising quality.

"The funding system for childcare is complex and our average figures may differ from the actual cost to childcare providers of providing high quality care. Yet, the survey makes clear that – from a parent’s perspective – costs are increasingly difficult to manage which is a finding that should concern us all. Families are being expected to pay more for their child’s nursery place – an average of £14,000 per year in London – than the fees for many private schools – and this cannot continue."

(GK)