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'Our childcare system isn't fit for purpose' warns the Family and Childcare Trust

Article By: Richard Howard, News Editor

Leading voices from around the childcare sector have issued responses to new research from the Family and Childcare Trust, which has shown the price of part-time childcare for a family of two children to have overtaken the price of the average UK mortgage.

The Trust’s figures confirm that childcare costs have risen more than inflation every year since 2002, with UK parents required to spend more than a quarter of their salaries on childcare as a result.

Parents with one child in part-time nursery care and another in an after-school club now pay an average of £7,549, which exceeds the average mortgage costs of £7,207. Full-time childcare, on the other hand, amounts to £11,700 a year.

Chief executive of the Trust, Anand Shukla, comments: “When even part-time childcare costs outstrip the average mortgage for a family home – and many parents have to spend more than a quarter of their income on childcare – it’s clear that our childcare system isn’t fit for purpose. We need a childcare system that helps parents who want to work and contribute to the economy and gives children the best start in life. The Family and Childcare Trust wants to see all political parties commit to a long-term childcare strategy that delivers for parents, providers, and crucially, for children.”

In response, the Trust has called for a number of immediate steps from the Government: these include; increasing Universal Credit to account for a minimum of 85 per cent of all parents’ childcare costs; an increase to Working Tax Credits in order to make up for cost increases since 2005; extending free early years education to all two year olds; extending the pupil premium to the most disadvantaged families; and stricter measures on local authorities that fail to achieve sufficient provision.


Liz Bayram, the chief executive of PACEY (the Professional Association for Childcare and Early Years) believes it’s appropriate to ask the Government, and also employers, to give parents more assistance considering how costs seem to be exceeding those in other developed countries.

PACEY chief executive Liz Bayram

She comments: “The Professional Association for Childcare and Early Years (PACEY) recognises the difficulties families experience due to the ongoing rise in childcare costs across the UK. However, the rise in costs is not simply a case of childcare settings charging increased fees. Indeed, most providers have kept any increase to a minimum whilst having to contend with greater operating costs in their setting and the cost of delivery of free early education for all three and four year olds not being met by the fee local authorities pay providers. Whether a nursery or childminder, people working in childcare are not making a profit and costs are rising because providing quality childcare is expensive.

“In many other countries parents only ever pay a proportion of their childcare costs with government (and in some instances employers) contributing too. To help more parents access affordable, high quality childcare, Government needs to invest appropriately in childcare and recognises the economic benefit of supporting families to balance work and caring responsibilities. PACEY would echo the Family and Childcare Trust’s call to extend free early education to all two year olds, so long as it is funded appropriately. This would enable settings to afford appropriately qualified staff and allow them to invest in the professional development of existing staff, so they can deliver high quality care. Where choices have to be made in challenging economic times, PACEY would want government to ensure it makes the greatest investment in childcare support for disadvantaged children and families.”


Jun O’Sullivan, chief executive of the London Early Years Foundation, agrees that costs need to be brought in line with other European countries, which current Education Minister Elizabeth Truss is known to rate highly.

She says: “The survey shows that the current childcare system is not working for anyone. There are insufficient places because providers cannot subsidise the costs of childcare; parents remain trapped in poverty because the cost of childcare is often the very barrier to entering work. The free offer is underfunded and short on hours. Many say childcare is a family’s personal concern, but we would argue that childcare is now a pillar of the economy and a critical lever to help people out of poverty and a means of future-proofing the challenges many children will face. Governments and political parties need to wake up to this and realise that this piecemeal approach to childcare is unravelling with costly implications.”

Pre-school Learning Alliance

Pre-school Learning Alliance chief executive Neil Leitch

Neil Leitch, chief executive of the Pre-school Learning Alliance, calls for a full and long-term commitment to real investment in the sector, rather than any half measures.

He says: “The fact that childcare costs in England have stabilised over the past year will be welcome news for parents across the country. However, for the government to attribute this positive trend to their own ‘reforms’ is completely disingenuous. Let’s be clear on this: these real-term cost reductions are due entirely to the efforts of early years providers, many of whom continue to subsidise perpetually-underfunded free entitlement schemes, even though this often means an ongoing struggle to break-even or in many cases, operating at a loss. It is their unwavering commitment to supporting families and providing high-quality affordable childcare that has resulted in this real-term reduction in costs – and it’s worth noting that this is something that will benefit all families, not just those who fit the narrow criteria of existing government policies such as tax credits.”

Mr Leitch continues: “Relying on providers to continue to prop up a flawed system, however, is not a sustainable solution – the government simply must start investing properly in the early years sector. The current situation – in which early years providers are substantially unfunded, practitioners are paid some of the lowest wages in Europe, and cuts to local authority funding have meant a reduction in vital support, training and guidance on a local level – is simply untenable in the long-term.

“For years now, the government has stood by and done nothing to address the inequity and inadequacy of early years funding in England. If it is to achieve its goal of high-quality, affordable, accessible childcare, this has to change.”

NDNA chief executive Purnima Tanuku

National Day Nurseries Association

Purnima Tanuku, of the National Day Nurseries Association, points out that both providers and parents need better support from future funding packages.

She comments: “The figures for England in the Family and Childcare Trust report shows an increase of 2.2 per cent on nursery hours for under 2s and 0 per cent on nursery hours for children over five.

“These show how hard the nursery sector has worked to keep costs down for parents. But they are struggling to do this against rising wage bills, utility costs, business rates and the increasing financial gap in free provision.

“The headline figure quoted in the Family and Childcare Trust survey puts the cost of care at more than £7,000 a year for a family with two children, one in nursery and one in an after school club, which is a daunting figure. But what must be remembered is there is some help with these costs. Tax credits, employer vouchers and free entitlement can help ease the financial burden.”

However, she continues: “Currently parents have to pull together their own package of support which is a confusing and daunting process.

“All three funding pots need to be streamlined and made available at the point of purchase. Nurseries also have to fight the funding losses they suffer on the free entitlement places.

“As the funding is not ring fenced, different local authorities give different hourly rates. Our recent survey shows the chronic underfunding of universal free childcare hours with the lowest amount recorded a ‘pocket money’ level funding of £2.80 per hour.

“To absorb these losses on free places nurseries have no choice but to raise the price of the hours parents pay for.

“With the results of the Family and Childcare Trust Survey and NDNA’s own Nursery Survey Report raising some serious issues within the sector, we would urge the Government to enter into meaningful and constructive dialogue with providers and work to find a way forward.”


Head of policy at 4Children, Dr Steven Toole, believes that economic recovery should result in a revitalised approach.

He says: “The cost of childcare remains a major challenge for too many families, resulting in some parents getting into debt and others having to give up or being prevented from taking up work. Recent 4Children research shows the scale of the struggle parents face with childcare, with one in four saying that affordable, flexible and accessible childcare would make the most real, positive difference to their family life.

“As we emerge from the economic crisis, we need to invest in making Britain great for families and radically reshaping this country’s childcare offer is a key part of this. 4Children is calling for a guarantee of universal childcare for all families for children aged 0–14. It is time for politicians and decision makers to demonstrate a real commitment to struggling families and come forward with detailed, long term proposals for how they intend to address this escalating problem for families up and down the country.”


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