
Rapid rise in childcare costs adds to family finance woes – why does the government penalise working parents so much?
As if the Emergency Budget didn’t put more pressure on families – with the shake-up in child benefits, tax credits and childcare tax vouchers – it seems that for parents who are working the childcare that they need to enable them to stay off benefits and contribute to society is now costing some parents a third of their income.
According to this year’s Childcare Costs Survey from Daycare Trust, the national childcare campaign, shows that the cost of childcare continues to rise.
Today’s survey, which is compiled from figures submitted by Family Information Services (FIS) in England, Scotland and Wales found significant rises in childcare costs for all forms of childcare.
Childcare Costs Survey findings
Key findings in the survey include:
· In England, the cost of a nursery place for a child of two years old or older has increased by 4.8% since last year – far exceeding the growth rate of 2.1 per cent for the average wage in the same period.
· The average yearly expenditure for 25 hours nursery care per week for a child aged less than two years stands at £5,028 for parents in England, £5,178 for parents in Scotland and £4,723 in Wales. The average yearly cost of 25 hours care from a childminder for a child under two stands at £4,670 in England, £4,664 in Scotland and £4,687 in Wales.
· According tot he survey, costs varied considerably between regions and within regions. London and the South East of England remain the most expensive in Britain for all forms of childcare. In London, the average cost for 25 hours nursery care for a child aged less than two years is £118.54 (equating to £6,164 per year). In contrast, the same provision in the North West is £82.70 a week (£4,300 per year).
The most expensive nursery reported in this year’s survey was located in the West Midlands, costing £11 per hour. Parents using this nursery for 25 hours per week could therefore conceivably pay £14,300 per year (or £28,600 for 50 hours care).
Despite a legal duty on local authorities to ensure that sufficient childcare is available locally, 60 per cent of Family Information Services stated that parents had reported a lack of available childcare in their area in the past year.
The findings also suggest a particular lack of childcare for children aged 12-plus and those with a disability or special educational needs, with only 14% and 11% of FIS saying there was adequate childcare available for these groups respectively.
Commenting on the survey, Anand Shukla, acting Chief Executive of Daycare Trust said: “When parents sit down to calculate their family finances and see childcare costs increasing far faster than their wages, it is no wonder they may think twice about the economic sense of staying in work. These high, rapidly rising costs are particularly significant given the number of people not receiving cost of living pay increases this year, the increase in VAT , and rising costs of other household goods, particularly food and fuel.”
“These findings add to our concern about the reduction in the childcare element of Working Tax Credit, which from April will only cover up 70% of childcare costs for low income working families, rather than the current 80%. Once this change comes into place, some families will effectively have an extra £546 a year added to their childcare bill. Yet parents in the UK already spend an average of one third of their net income on childcare costs – more than in any other OECD country. ”
“We are also very concerned to see that many local authorities appear to be failing in their duty to provide adequate childcare. It is startling that only 11% have sufficient childcare in place for disabled children.
“With costs on the rise again, it is more important than ever that parents are aware of, and take up the help with childcare costs that they are entitled to. All three and four year olds are eligible for the free early years entitlement, which was increased to 15 hours last September. There is also help available through tax credits and employer-supported childcare vouchers, which many parents are entitled to.
So what exactly are parents supposed to do to manage the cost of childcare? How are we supposed to survive?
It appears that the current government is set on penalising mums who don’t work, and then penalising them even more if they do work!
Childcare swaps
In 2009, some parents thought they had found a happy medium with childcare swaps, where they would help eachother out with childcare so that they could also work, but many came under the beady eye of Ofsted who said that even regulalrly caring for another person’s child with no payment could still fall under the Childcare Act 2006 term of “reward” and therefore require the parents to be registered and inspected by Ofsted, or be fined up to £5,000! Read that story here: http://news.bbc.co.uk/1/hi/education/8278533.stm
For more information, visit www.daycaretrust.org.uk.