Soaring nursery fees mean that some parents are paying up to £22,100 a year in childcare costs per child – a rise of more than 40 per cent in seven years. This is more than the fees of private day schools such as Westminster School in London, regularly ranked the top school in the country, where fees are currently £19,626 a year.
Campaigners last night called on the Government to take urgent action, arguing that the enormous cost of childcare was putting families under intolerable financial pressure and driving parents out of the workforce as they could no longer afford to work.
The cost of a nursery place for a child aged over two in England rose by 5.1 per cent last year – almost double inflation despite the UK being in recession, according to a survey by the charity, the Daycare Trust.
Meanwhile, the average cost of a childminder – self-employed carers who look after children in the minders' own homes – increased by 6.4 per cent for children under two and 9.2 per cent for older children.
The most expensive childminders cost almost as much as nurseries with fees of £208 a week in London, according to the latest survey by the Daycare Trust. However this is dwarfed by the cost of nannies who cost up to £32,216 for a full-time daily nanny in central London, separate figures revealed last month.
The charity, which campaigns for accessible, affordable and high-quality childcare, called on the Government to give parents more financial help to meet costs. It warned parents to expect even greater cost increases in the future as public spending cuts hit the childcare and early years sector.
According to the charity's ninth annual childcare costs survey, a full-time nursery place for a child under two costs an average of £218 a week in London – a significant proportion of the average gross weekly earnings of £489. But some parents are paying £425 a week, or £22,100 a year.
Meanwhile a part-time place for 25 hours of nursery care costs £109 in London, compared to average part-time earnings of £153 a week.
The survey is based on statistics provided by the Family Information Services. Fifty-eight per cent of parents had reported a lack of affordable childcare in their area in the past 12 months.
Parents can get help with the costs of childcare through tax credits. Many parents can now also get tax relief through their employer via childcare vouchers. Gordon Brown provoked a revolt among Labour MPs and former ministers when he planned to phase out tax relief on the vouchers. Mr Brown was forced to scale back the plans.
Three- and four-year-olds are also entitled to 12-and-a-half hours of free nursery education a week rising to 15 hours from September. But parents in Britain still pay about 70 per cent of the cost of childcare, compared with European parents who pay about 30 per cent of their childcare costs.
Alison Garnham, the joint chief executive of the Daycare Trust, said: "Families have been hit hard by the impact of the recession, with parents facing the strain of losing jobs; having their hours cut back; or facing pay cuts – all of which is compounded further by childcare costs shooting up."
The charity called on the Government to increase free entitlement to early years education to 20 hours per week for all two-, three- and four-year-olds from 2020. The National Day Nurseries Association said that although costs had risen, the average hourly rate in nurseries was still only £3.52 for the under-twos – money which must cover high staff to children ratios, utilities, rates, premises and equipment.
Purnima Tanuku, chief executive of the National Day Nurseries Association (NDNA), blamed the Government for the rising costs and called on it to invest more in the sector.
She said: "We recognise that many parents find it difficult to pay for childcare, but our evidence also shows nurseries are experiencing a real battle to remain open in tough times and achieve challenging government targets for better qualified staff. Nurseries themselves are very aware of the struggles parents face and are working hard to keep increases to an absolute minimum, with many barely breaking even."
Andrew Fletcher, joint chief executive of the National Childminding Association, said: "The costs of childcare, particularly during a recession, may on first reading of this survey seem high and hard for many families to afford. We support the Daycare Trust's recommendations that the Government ensures the availability of affordable childcare."
The Children's minister, Dawn Primarolo, said the findings did not take account of the free childcare available for disadvantaged two-year-olds and all three- and four-year-olds. She said: "The Daycare Trust report rightly highlights the huge investment the Government has made in early years provision. We will not let the improvements this has created slip away during difficult economic circumstances. We will continue to target financial support for childcare at the families most in need."
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