Childcare 'costs more than mortgage'

childThe report said that the current system is not working for anyone

Many parents in Britain are now paying more for childcare in a year than they pay for their mortgages, research suggests.

The Family and Childcare Trust’s annual report says average fees for one child in part-time nursery and another in an after-school club are £7,549 per year.

The average annual UK mortgage costs an estimated £7,207 last year.

Full-time childcare costs are nearly two-thirds more – at £11,700 a year – than average mortgages, it adds.

The study is based on information gathered by the trust from local authority family or children’s information services in England, Wales and Scotland.

The trust says childcare is becoming increasingly unaffordable with a 27% rise in costs since 2009, while wages have remained static.

This is despite successive governments recognising its value to children, families, society and the economy and spending £6bn on supporting childcare every year, it adds.

The report notes that during the course of the current Parliament, the government will have put an additional £1bn into supporting childcare.

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It’s clear that our childcare system isn’t fit for purpose”

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Anand Shukla
Family and Childcare Trust

All children in England, Scotland and Wales qualify for part-time free early education in the term after their third birthday.

In England, they receive 570 free hours every year, but even with this help, some parents are contributing a substantial part of their income to childcare.

Data from the OECD shows that parents in Britain set aside a higher proportion of their salary to cover childcare costs than in most European countries.

In 2012 only Swiss parents contributed a higher share of their salary than British parents, who on average spend 26.6%.

‘Children losing out’

The average costs for all OECD countries is 11.8% of parental net income.

In France this figure is 10.4%, while Germany it is 11.1%.

This means that maternal employment rates for those with children under five in Britain are lower than most other OECD countries.

The report said that the current system is not working for anyone.

“Children are losing out vital early education and families remain trapped in poverty because they cannot make work pay.

“Childcare providers struggle with debts. Women fail to return to the labour market after they have children and the economy loses their skills and their taxes.”

girls in nurseryBetter use of school premises and children’s centres for childcare is urged

Anand Shukla, chief executive at the Family and Childcare Trust, said: “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… system that helps parents who want to work and contribute to the economy and gives children the best start in life.”

And he called for all political parties to commit to a long-term strategy that delivers for parents, providers, and children.

The report called for better use of school premises and children’s centres to provide childcare, and for the government’s contribution to costs to increase.

‘Costs stabilising’

Education and Childcare Minister Elizabeth Truss said the survey showed that costs in England had fallen for the first time in 12 years in line with her department’s Early Years Parent Survey from earlier this year. The drop in England was about £15 over the past year.

“After 12 years of consistently rising prices, costs in England have stabilised for the first time – In fact once inflation is taken into account costs for the majority have actually fallen. This means more parents are able to access affordable childcare and support their families.

“These reductions contrast with rising costs in Scotland and Wales, highlighting the difference this government’s reforms are making.”

She added that pre- and after-school provision can bring educational benefits and good quality early education can give children the best start in life.

Liz Bayram, chief executive of the Professional Association for Childcare and Early Years, said: “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.”

Lucy Powell, Labour’s shadow minister for childcare and children, said: “Under David Cameron, childcare costs are soaring, adding pressure to family life and shutting parents out of work.

“Labour will help working families with the extension of free childcare for three and four year olds with working parents from 15 to 25 hours and guaranteed access to wraparound childcare through primary schools.”

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