Most parents with young children would delay the birth of another because of nursery costs, which are already forcing some to cut back on essentials, according to new research published amid growing calls for sweeping childcare reforms.
With Chancellor Jeremy Hunt considering measures to cut childcare costs, which are among the most expensive in the world, prominent providers are to deliver a joint letter to Downing Street outlining measures to increase government aid, improve care standards and create Actions are calling for a simpler support system for new parents.
A survey of 1,000 parents with children under the age of four, commissioned by the group, found that 63% would put off or not have another child due to high childcare costs. Almost half said their childcare provider had increased their fees in the last six months, while 32% also said they would reduce essentials like groceries to be able to afford childcare costs.
70% of parents surveyed said they would work more if childcare was free. Financial insiders accept that childcare costs are a factor keeping some people out of the labor market. However, the possibility of extending 30 hours of free childcare to one and two-year-olds in England at the spring budget was scrapped on cost grounds. The plan would cost around £6bn, roughly equivalent to a 1p increase in the income tax rate.
Officials are exploring cheaper options. One idea already making its way through Parliament is to give workers the legal right to request flexible working hours from their first day at work. Currently, employees are only entitled to this right after six months. Officials believe extending this right to the moment someone starts a job could encourage new parents to get back to work sooner.
A group including the National Day Nurseries Association (NDNA), the London Early Years Foundation (LEYF) and the Fatherhood Institute have all signed a letter to Rishi Sunak calling for radical changes and warning reforms to childcare. They warned that doing nothing would have “devastating effects on families and the economy.”
“Britain is the third most expensive country for childcare according to the latest OECD figures,” they wrote. “The percentage of wages British parents spend compared to French parents is more than double. It is not uncommon for parents, particularly in London and the South East, to spend most of their income on childcare. In 2023, parents face a sharp increase in kindergarten costs as government funds decrease in real terms while costs for staff and energy bills increase.
“Due to the patchy nature of the childcare system, parents also have difficulty understanding the support available to them, while free childcare of up to 15 hours a week is only widely available for children aged three and four in England. This leaves an unjustifiable gap in care after the end of parental leave.”
The observer has previously raised concerns from childcare workers that they are struggling with higher food costs, although many report that more children are arriving at their facilities hungry. Some have reached out to charities to help provide food in their communities.
June O’Sullivan, Chief Executive of LEYF, said: “It is shocking how drastically government underfunding is driving up childcare costs and degrading the quality of service at many daycares. This is particularly shameful as it has an even greater impact on children from disadvantaged backgrounds.” Rajan Lakhani of money app Plum, who oversaw the research, said there is “a very real risk that many parents will be forced to pay less to work or even drop out of the labor force altogether as childcare fees become prohibitive”.
A spokesman for the Department of Education said: “We are aware that families and early childhood education providers across the country are under financial pressure. That’s why we’ve spent more than £20 billion over the last five years to help families with childcare costs. The number of places available in England has also remained largely stable since 2015, with thousands of parents benefiting.”