Coram’s 21st annual Childcare Survey urges chancellor to use the budget to help parents hit by rising childcare costs

Published: Tuesday 22nd March 2022

Coram Family and Childcare’s 21st annual Childcare Survey finds that parents are now paying 2.5% more for childcare for children under two; 2% more for children aged two; and 3.5% more for 3–4-year-olds than they were a year ago.

A group of children playing

The steep increase in the cost of living and the economic impact of the pandemic means Britain’s parents are struggling even more with rising childcare costs and a sharp drop in the availability of places. Only 57% of local authorities now report having enough childcare places available for children under 2, and just 59% report having enough childcare available for parents working full time.

There are also increasing gaps in childcare for children with SEND, with only 21% of local authorities having enough childcare. Availability of the 2-year-old free entitlement and the 3-4-year-old 15-hour entitlement has dropped by 9% and 3% respectively, hitting the most disadvantaged children and families the hardest. 

The Childcare Survey 2022 also reveals that the number of children accessing early years entitlements has plummeted. Some 38% of local authorities have seen a drop in the number of children using 2-year-old free entitlement. The children eligible for this entitlement are some of the most disadvantaged in the country and risk missing out on crucial development.  

Some 40% of local authorities have also seen a decrease in the uptake of the 3-4-year-old free early education entitlements. The free entitlements have been shown to narrow the attainment gap between children from disadvantaged backgrounds and their more affluent peers. The impact of the pandemic and the drop in uptake means this gap is beginning to widen again, reversing years of progress. 

There are significant regional disparities across England both in terms of cost and availability of childcare. In the East of England, only 29% of local authorities report having enough childcare for children under two, while the figure was 100% for the North East. The price for 25 hours of nursery childcare for those aged under two is 50 per cent higher in inner London (£183.56) than in Yorkshire and Humberside (£122.17). 

The pandemic continues to significantly impact childcare. Some providers are struggling to remain sustainable with 14% of local authorities reporting that at least a quarter of their group-based providers are facing severe financial difficulties, and that 17% are seeing at least a quarter of their childminders are experiencing the same challenges. A third of local authorities also reported seeing an increase in permanent closures of childcare settings compared to last year. 

Ellen Broomé, managing director of Coram Family and Childcare, said: 

“We are disappointed that amid an ongoing cost of living crisis, and off the back of a pandemic which has severely impacted children’s life chances, the Government has again refused to review childcare funding and availability. Many parents, up and down the country, will be locked out of work or struggle to make ends meet as childcare prices continue to go up and the availability of places goes down. And the more vulnerable children will miss out the most on this boost to their development and outcomes.

High quality childcare is key social infrastructure, it helps parents work and narrows the gap between poorer children and their more affluent peers. With families’ bills skyrocketing, we urge the Chancellor to make sure that childcare and children’s life chances are at the very heart of his announcements.” 

The Childcare Survey 2022 calls for the following actions:

  • Local authorities and Mayors to extend eligibility of 30 hours provision locally - at a minimum to parents in training, education, to single parents and families with no recourse to public funds.
  • Reform Universal Credit so it does not lock parents out of work – by increasing the maximum amount of childcare costs paid under Universal Credit and guaranteeing support for upfront childcare costs.
  • Double the early years premium to boost outcomes for the most disadvantaged children.
  • Ensure the National Tutoring Programme is reaching primary schools – with a wrap around childcare offer to boost take up.
  • Government should re-allocate underspend from Tax-Free Childcare to other parts of the childcare system – realigning Government funding towards low-income families.
  • The Westminster Government should follow the lead of the Scottish Government - and extend the 30 hour free entitlement to all three and four year olds.

Read the full report