Nursery care costs soar

The cost of childcare in Britain is rising at over three times the rate of inflation, with nursery fees in inner London soaring by 17% over the last year, according to a survey published today.

Parents in the capital typically paid £197 a week for nursery care in 2004 - up from £168 in 2003. In the worst cases, London parents are paying up to £350 a week for full-time nursery care, research by the Daycare Trust found, while the typical cost of a full-time nursery place for a child under two in England has reached £141 a week, up from £134 last year.

The average jump in the cost of nursery places was 5.2% during 2004 - more than triple the rate of inflation (CPI is currently at 1.6%), with fees much higher than average in London and the south-east. Costs in Scotland and Wales - included in the survey for the first time this year - are cheaper, at £122 and £120 respectively.

The trust's annual survey of childcare costs comes only weeks after the government pledged more help for parents in meeting fees as part of its 10-year childcare strategy.

However, nursery leaders today warn that ministers' goal of universal, affordable and high-quality childcare will not become a reality without greater direct government investment to fund expansion and better pay for higher qualified staff.

The National Child Minding Association also said that "quality childcare comes at a price". A full-time place with a childminder now costs an average of £127 a week, or £157 in the south-east.

The costs continue even when youngsters go to school: a place at an out-of-school club for 15 hours a week costs up to £60.

In another challenge to the government, which will promote its childcare record and ambitions prominently in the run-up to the forthcoming general election, the Institute for Fiscal Studies suggests that the childcare tax credit - the complex system used to help working families meet childcare bills - could be scrapped and the cash spent on creating and subsidising more high-quality childcare places.

Not only do families face huge bills for childcare, most are still struggling to find high-quality affordable places for their children, according to the Daycare Trust survey. Almost two thirds - 65% - of local childcare information services said parents were reporting difficulties securing the care they wanted.

Trust director Stephen Burke said: "The findings of this survey may make grim reading for some, but parents across the UK already know too well the inflating cost of childcare.

"While the steps indicated by the government in its 10-year strategy are welcome, parents of children right now need more access to affordable, quality childcare to suit their needs."

Availability of good childcare was still "a huge issue", he added. "To make childcare available to all, there must be significant investment in the childcare workforce, both to ensure there are enough staff and to ensure they are trained to the highest standards to care for our children."

The National Day Nurseries Association warned that without more government investment nursery fee increases above inflation would continue.

The association's chief executive, Rosemary Murphy, said: "Currently childcare workers subsidise the cost of childcare for parents as the average fee still only supports low wages."

She added that much more government funding would be needed "if we are to achieve truly universal, affordable, high-quality childcare without basing it on a low-paid and poorly qualified workforce".

The latest figures confirm that Britain's childcare remains the most expensive in Europe, despite accelerating government efforts to address the issue by expanding places and providing some cash help for many working parents.

Ministers have opted to fund the "demand" side of childcare through tax credits in a bid to give parents choice in the childcare "market", but the shortage of provision - there are still only enough places for one in every four children - has prompted some to question the approach.

Other European countries, notably in Scandinavia, invest significantly larger sums and spend directly on supporting childcare places.

A Department for Education and Skills spokeswoman said that, from April, support through the childcare element of the working tax credit would rise from a maximum of £200 a week to £300 for two or more children, while the proportion of costs paid would increase from 70% to 80% in April 2006.

The government is also spending £5m a year from 2006 to address the particular problems of London, which faces a chronic childcare shortage and escalating costs.

Manny Lewis, chief executive of Ken Livingstone's London Development Agency, said: "This survey confirms that London child care costs are rising considerably faster than in the rest of the country. For many London families the prohibitive costs of quality childcare act as a barrier to employment."