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Daycare Trust : Childcare Costs Rise To Record Levels : Survey : January 2004

Childcare costs have continued to rise above the rate of inflation, according to Daycare Trust's latest survey, and parents say they cannot pay any more.

The 2004 Childcare Costs survey published Monday 26 January 2004 shows childcare costs have risen by more than inflation for the third year running.  It coincides with a joint Daycare Trust/TUC conference focusing on the links between women, child poverty and childcare.

The typical cost of a nursery place for a child under 2 in 2004 is £134 a week (up from £128 a week in 2003), a rise of nearly 5%.  This compares to an average household income of £562 a week and average weekly expenditure on housing and food combined of £82 a week. 

Parents in some parts of the country, particularly London and the southeast, pay much more.  The highest nursery cost identified in the survey was £338 a week, over £17,500 a year.

Daycare Trust is calling on the Government to increase help for parents with childcare costs.  In the short term the childcare tax credit needs to be improved by:

• Acknowledging that parents with two or more children using childcare face double or more costs
• Increasing the percentage of costs covered by the tax credit
• Increasing the level of childcare costs covered to reflect the real costs parents pay
• Reducing the hours the second earner in a couple has to work to qualify for the tax credit

In the long term the Government must subsidise places so that every family can access quality childcare at a price they can afford by having a children's centre in every community.

The survey of Children's Information Services in England highlights the cost of childcare (see Notes):

• The typical cost of a full-time nursery place for a child under 2 is £134 a week, almost £7,000 a year
• In some parts of the country, particularly London and the southeast, the cost of a nursery place is much higher - typically £168 a week in inner London
• The highest nursery cost identified in the survey was £338 a week
• The typical cost of a full-time place with a childminder for a child under two is £120 a week
• The typical cost of an afterschool club is £35 for 15 hours a week
• 73% of parents report a lack of affordable quality childcare in their area

Parents pay three-quarters of the cost of childcare, with Government paying most of the rest and a small contribution from employers.  In 2002 parents in Britain paid £1.8 billion to the day nursery industry.

Working families on lower incomes who get help with their childcare bill through the childcare tax credit still have to find at least 30% of the cost of childcare, and there is no extra help for families with three or more children using childcare.  The current average award through the childcare tax credit is only £49.83 a week. 

Many workless families get no help at all with childcare costs, and millions of children in workless families are missing out on the benefits of childcare and early years education.

Stephen Burke, Director of Daycare Trust, said:

" Parents in Britain already pay the highest childcare bills in Europe.  They tell us they cannot afford to pay any more.  

" Affordable childcare for all is crucial to tackle child poverty, to help parents work and train and to raise educational attainment.  Quality childcare helps give children a good start in life.  But at present access to these benefits depends on how much parents earn and where they live.

" The Government needs to help all families access quality affordable childcare near where they live.  Investment in the early years is an investment in the future of our country. "

" Many parents can't afford the high cost of childcare.  Lots of mothers would love to work but can't because their pay packets won't stretch far enough. More widespread, better, cheaper childcare would be a winner for parents everywhere. If more parents were able to work, it would benefit both the UK economy and employers, and give many children more opportunities and the chance of a better life. "

Notes:

Daycare Trust's 2004 Childcare Costs Survey was published at a joint Daycare Trust/TUC conference, Women, child poverty and childcare - making the links.

A report, Women, child poverty and childcare - making the links, written by Professor Hilary Land of the University of Bristol, has been published prior to the conference and is available from Daycare Trust, tel: 020 7840 3350.

Typical weekly childcare costs (£) for full-time nursery or childminding place and 15 hours a week at an afterschool club in England 2004

Area	Nursery (under 2)	Nursery (over 2)	Highest nursery cost	Child minder (under 2)	Child minder (over 2)	After school club	Weekly house hold income*	Weekly house hold expend iture (hous ing & food)*
Inner London	168	149	338	137	132	31	752	95
Outer London	169	147	284	135	134	29	752	95
South East	148	137	250	135	145	33	681	95
South West	129	121	186	120	115	35	509	81
East England	141	118	215	149	148	33	573	88
West Midlands	107	105	179	101	99	33	482	75
East Midlands	111	110	160	101	101	41	511	79
Yorkshire & Humberside	140	131	175	127	126	48	452	66
North West	114	107	162	96	97	31	458	72
North East	110	103	183	105	104	31	489	71
National average	134	123		121	120	35	562	82

The figures were compiled form a survey of 106 of the 150 Children's Information Services in England.

*     Figures from the 2003 Family Spending: Expenditure and Food Survey (Office for National Statistics)

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