Nursery fees going up is the last news any working parent wants to hear right now. With energy bills and the price of petrol soaring, inflation at an all-time high and basic food costs adding on pounds to the weekly shop, a rising childcare bill is set to send parents over the edge.
‘We’re so stretched as it is,’ says Julie Raven, 36, a mother of two pre-school children aged 2 and 4 who lives in Leeds. ‘I’m a teacher and my husband is an electrician and we’re already facing a huge hike in our energy bill this year and I’m noticing how the price of everything from food to petrol and nappies is going up. Our two girls go to nursery four days a week and I’m petrified they’re going to put the fees up as well which means that one of us might have to stop work as it won’t be financially viable anymore. I hardly bring enough home as it is after childcare costs. My priority is making sure we pay the mortgage and there’s enough food and basics without going into overdraft, but I’m panicking about what lies ahead.’
Around one in three (32%) working parents with pre-school children already spend more than a third of their wages on childcare, a Trades Union Congress poll reported last month, but Chancellor’s Rishi Sunak’s Spring recent statement made no reference to rising childcare costs.
He raised the National Insurance threshold by £3,000, cut fuel duty and promised a basic rate tax cut to 19 per cent in 2024 – but there was little to address the crisis facing parents right now.
‘Parents are understandably concerned about the prospect of childcare costs rising and nurseries and childcare providers are working hard not to pass the full costs they’re facing on to parents in terms of fee increases,’ explains Purnima Tanuku OBE, Chief Executive of National Day Nurseries Association (NDNA). ‘But minimum and living wage rates will rise from April while everything nurseries are buying is getting more expensive – from food to utilities and educational resources. The last thing providers want to do is put up nursery fees but the government funding for the “free" hours – 30 hours of free childcare per week for 38 weeks of the year - doesn’t cover the cost of delivery. Something has to give.’
Rebecca Eggleton, 37, a parenting coach from Cornwall who has four children aged between four and 10, has already been given notice by her nursery of a price increase which is due to start in April.
‘My youngest is in nursery and for me the main problem is the cost of petrol as my children attend three different settings and they are eight miles from my house so I’m currently driving over 45 miles a day just on the school run,’ she says. ‘I’ve made the decision to only send my daughter to nursery three days a week to save over 15 miles a day. Childcare costs are a constant worry and I make sure to do price comparisons on all my bills and switch if necessary to save money.’
Many nurseries are being forced to look at fee increases between 4 and 9 per cent just to be able to stay open and staff recruitment is a huge issue. The average hourly pay for a nursery worker is £8.46.
‘There will be no nurseries left with the staff shortages,’ says Vanessa Dooley, founder of Jigsaw Early Years consultancy. ‘Lidl pays better than early years setting. It’s a chicken and egg thing. They can’t take on any more children if they don’t have the staff. I’ve been in early years for over 30 years and this is the worst for recruitment I’ve ever seen. Some places are closing rooms down as they don’t have enough staff to abide the adult/child ration so when parents are looking for childcare this will have a huge impact.’
June O’Sullivan, CEO of the London Early Years Foundation which runs 39 nurseries in London agrees that childcare settings are struggling with a £700 million shortfall a year – something which was ignored in the Chancellor’s statement when he confirmed business rates relief to the retail, hospitality and leisure sectors from April 2022, but not for the early years sector.
‘We always put childcare costs up by about 4 per cent but that’s not really going to help with the current rise in inflation and utility bills,’ says O’Sullivan. ‘In our organisation, the profits are redirected back to families so they can access our places but as the cost of living crisis carries on and we don’t get any government help, nurseries will see fewer parents as they just won’t be able to afford to work.’
Single parents especially will be hit hard.
‘Single parents are twice as likely to be in poverty than two parent families and they often can’t juggle their work with another parent but have to rely on formal childcare to be able to work,’ says Victoria Benson, Chief Executive of Gingerbread, the charity for single parent families. ‘We’re hearing heart-breaking stories of single parents not eating so they can afford food for their children, families living in single rooms, as that’s all they can afford to heat, and parents are at breaking point because of the mental load they’re carrying.’
Helping parents right now in real terms is essential, according to Dr Mary-Ann Stephenson, director of the Women’s Budget Group. ‘The Chancellor spent quite some time talking about supporting “hard-working families” in his statement,’ says Dr Stephenson. ‘If you want to do that you must recognise how essential childcare is to those families. Childcare fees have risen at twice the rate of wages in the last ten years. Ask any mother who has been kept out of work by unaffordable childcare, and she’ll be able to tell you that the rising cost-of-living isn’t news. There is the risk too that providers will have to pass on their own rising costs for bills and food to parents, further increasing fees this year. The situation is untenable. Who will drive your bus, serve you food or treat your injury if they can’t go out to work because of childcare?’
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