National politics

#CostofCameron 9: Childcare costs up £304 this year

Childcare graphicI can’t find where Labour got its number from but it looks about right. If you have a child under 2 in 25 hours of childcare you will be spending £5-6K a year, more in London. These bills have been increasing by 5% or more a year for a decade. The Family and Childcare Trust have been tracking childcare bills methodically since 2001. They say in their latest report for 2013:

A nursery place for a child aged two or under is now 77 per cent more expensive in real terms than it was in 2003, with similar rates of increase for children cared for by childminders. An after-school club is now 88 per cent more expensive in real terms than it was in 2003.

Childcare costs

These are big bills, painful and rising fast to be sure. But their graph (on page 11) tells the story – a straight upward line. It was no different under Labour. There is an active political debate around this topic but it is clear that there is nothing new about this. Labour’s solution seems to be make it all go away by having government paying the bills, for those over 2 at least. Not sure how that will tackle the root problem of spiralling labour costs (77% of nursery costs are labour). It will merely nationalise it.

3 replies on “#CostofCameron 9: Childcare costs up £304 this year”

Do the Tories have any ideas for reducing childcare costs? (Hopefully not having nurseries run by volunteers).

Some of my friends are talking about this on Facebook at the moment. Some quotes:

“In order to go back to work after having another kid I either need to be on benefits as a single parent or I need to earn a lifetimes wages every month to fund child care.”

“I have to go back to work full time which only just pays for my child care and petrol to get there and back. It’s either that or I get a part time job in a supermarket and completely drop everything I have achieved since I left education. What kind of a role model is that for my child? It’s an absolute disgrace!!! There is no help offered what so ever. If I wasn’t such a proud person I would quit my job and go on benefits, I would certainly be better off!”

Ordinary people don’t care that it was no different under Labour. We just want things to get better now, not to have politicians spend all their time arguing whose fault it is – that doesn’t get anything done.


The child care debate is a bit of a strange one (meaning people can be a bit fanciful or unrealistic about it).

I have a six year old so have been through this recently. Most parents quite rightly want a wonderful environment with well-trained, capable people. Obviously these people need to be paid the same kind of money as their users – unless you hire really young or untrained people, which no-one wants. It is unsurprising therefore that child care costs are going to be a significant fraction of anyone’s income. Can we agree that? Note I said costs – not end-user pricing/contribution.

Childcare will always be really expensive and many people will feel that on the whole parents should pay for it.

The state does though have an interest in new people being created and can choose to subsidise child care. The current offer is a tax break (Childcare Vouchers which is worth up to £930 pa to a 20% taxpayer) and free child care for 3/4 years olds for 15 hours a week.

Are you aware the coalition extended the 3/4 year old offer from 12.5 to 15 hours in September 2010? Are you aware the Coalition extended the 15 hours to the poorest 40% of 2 year olds? At a cost of £760 million? The new childcare voucher scheme to be introduced next year will cost about £1 billion. The new scheme is a 20% subsidy on childcare (in addition to the 3/4 15 hour offer). The last budget changes to childcare added £1.9 billion to the government’s bill.

I am not sure what the right answer is. It would not be a good idea to offer free childcare. It would cost a lot and the quality would be very patchy I suspect. I think parents should stay in control of child care and that probably means they have to pay for most of it.

Childcare is heavily subsidised now. If I had to choose right now between more subsidy for childcare and improvements in the NHS I would choose the NHS. That is the kind of decision we have to make. So maybe more subsidy but probably not now.

One way to cut down the cost is to look at ratios. We should look at this seriously and not make it into a silly political football.


Thanks for your reply Phil, and for taking time to explain the figures.

Britain apparently has some of the highest childcare costs in the world. I wonder whether this is because childcare is much better here, or for some other reason.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s