Parents to pay extra nursery fees of ‘up to £1,000’ as providers struggle to cope, survey reveals

The survey, carried out by Early Years Alliance, has found nine out of 10 providers expect to increase their childcare fees by an average of 8% this year.
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Parents may have to pay up to an additional £1,000 this year for childcare as providers struggle to cope with rising costs, a new survey has found. The survey, conducted by Early Years Alliance, found nine out of 10 providers expect to increase fees, typically in April, and by an average of 8% - higher than in previous years.

Sky News reported full-time childcare fees for a child under two years old averaged £269 per week last year, or just under £14,000 yearly, making UK childcare fees among the highest in the world. Accordingly, an 8% increase would bring that to more than £15,000.

The survey which ran online from January 10 to 23 and received 1,156 responses from early years providers, also found almost seven in 10 (69%) are planning to either increase or introduce charges for optional extras, such as meals or trips – more than double the proportion of respondents who said they were planning to do so in an equivalent survey in 2019 (39%).

In England, children aged three and four who attend a nursery or childminder are entitled to either 15 or 30 free hours per week, depending on whether their parents are employed. As a result, their costs are significantly lower. There are different schemes in Scotland and Wales.

The survey also found more than a third of pre-schools, nurseries and childminders say it is likely rising costs will force the closure of their setting within the next year, with a quarter (25%) describing this as “somewhat likely” and almost one in ten (9%) stating it would be “very likely”.

According to the Alliance, the government funding for the ‘free childcare’ over recent years has also failed to keep up with sharp increases in the national living and minimum wages, alongside other cost pressures such as rising energy costs and wider inflation.

Meanwhile, nearly four-fifths (83%) of survey respondents stated the government funding they get for the three-and-four-year-old early entitlement offer is less than the cost of supplying spaces, while nearly three-quarters (73%) said the same for the two-year-old offer.

As a result, about half (51%) of the settings surveyed registered a loss in the previous year, with the mean average loss equal to nearly £14,000, while roughly two in ten (22%) broke even and slightly more than a quarter (26%) recorded a profit.

Neil Leitch, CEO of the Early Years Alliance, said:  “The early years sector in this country is in crisis. As our survey findings clearly show, current levels of government funding are nowhere near enough to support the delivery of affordable, sustainable quality care and education.

Early Years Alliance, survey found nine out of 10 providers expect to increase fees, typically in April, and by an average of 8% - higher than in previous years.Early Years Alliance, survey found nine out of 10 providers expect to increase fees, typically in April, and by an average of 8% - higher than in previous years.
Early Years Alliance, survey found nine out of 10 providers expect to increase fees, typically in April, and by an average of 8% - higher than in previous years.

“As a result, nurseries, pre-schools and childminders are being left with an impossible choice: substantially increase fees for parents and carers or go out of business altogether. With inflation still sky-high, and the national living wage set to increase by record levels in just a couple of months, this situation is only going to get worse unless the government takes urgent action.”

One childcare provider saying they are now at risk of closure following the rising costs, said: “I cannot keep paying my staff an appropriate wage when I have to balance increasing bills. I do not want to pass all the costs onto parents, and fear that if I do then their children will not attend so the end result will be the same.

“I do not understand how any business can be expected to support such a huge percentage increase in salaries. The other options are to reduce how much we spend on food and resources which goes against everything I believe in and the purpose of running the pre-school.”

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