Action needed on childcare costs to stop Londoners being locked out of work, says Assembly

22 FEBRUARY 2012

Action is needed to prevent London parents being locked out of employment because of ‘eye-wateringly high’[1]  childcare costs, a new report[2] from the London Assembly says today.

Tackling childcare affordability by the Assembly’s Health and Public Services Committee, says childcare costs in the capital are up to a third higher than elsewhere in the UK[3] - an average of £119 a week for a child under two years old. 

Recent research has found that, on average, London families spend a larger proportion of their income  on childcare and travel than people in the rest of the country [4]. However, Londoners do not get extra financial help to meet higher childcare costs through schemes such as tax credits and Universal Credit, which is set to replace it.[5]

At a time when household bills are rising, London parents also face more challenges than parents in other regions because of longer working hours[6], lengthy commutes[7] and being less likely to have family close by to help look after children[8].

The situation is compounded by local authority budget cuts which mean the closure of affordable nurseries at Children’s Centres[9] in some areas. The Committee also found that most nurseries attached to primary schools offer the 15 hour free entitlement as short sessions, which may not suit most working parents and, although other providers offer more flexibility, they may be unaffordable for many [10].

Victoria Borwick AM, Health and Public Services Committee Chair said: “If we want to give children a good start in life, then we need childcare that is accessible, high quality and fits around families’ needs.

“We know that for those parents who wish to work, affordable childcare can bring real benefits to their children, especially those from more disadvantaged backgrounds.

“However, with London families having to find up to £22,000 a year for a full-time nursery place[11], many parents simply cannot afford to return to work after having children. Many also find the current system of 15 hours free childcare is not flexible enough to fit around their job, particularly if they work long hours.

“We understand that a great deal is happening to make it easier for parents to access and afford childcare. However, we think that all levels of government should do more so that London parents can work, study or train, and build a better life for their families.”

During its investigation, the Committee found that around half of London mothers are employed compared to two thirds nationally[12], which suggests those in the capital face particular difficulties in making employment a viable option.  There is also a lower proportion of part-time jobs in the capital than in other regions.[13]

The report also notes that childcare providers do not receive significantly more funding for the free nursery entitlement to cover their higher staffing and accommodation costs in London, making running the business unsustainable for many[14].

The Committee welcomes Government plans to improve flexibility for the free entitlement[15] and will write to ministers to ask them to try to ensure that primary school settings in particular consider ways of delivering it so that parents can choose how they spend it to suit their working or study times.

The Committee’s report also calls on:

  • The Government to develop the childcare element of Universal Credit so the maximum amount families can claim varies according to local childcare costs.
  • The Government to explore reweighting grants for local authorities to cover free entitlement for early education to factor in local costs
  • The Mayor to include improving access to early years’ education in his education inquiry
  • The Mayor to promote childcare vouchers schemes to the capital’s employers
  • London Councils to promote good practice to improve access to affordable childcare
  • London Councils to develop a register of organisations that may be able to manage and run nurseries linked to children’s centres.

Notes for Editors:

  1. See P8 of the transcript from Committee’s meeting on 13 July 2011
  2. Read the report, Tackling Childcare Affordability.
  3. See Table 2 on P11 of the report. Elsewhere in the country people pay around £96 for a nursery and £90 for a childminder for under twos.
  4. The Campaign for Better Transport said that a London family with two working parents and two children in nursery can spend around 40 percent of their income on childcare and travel compared to 26 percent for families outside the South East. See press release issued on 28 October 2011.
  5. See P17 of the report.
  6. In London 23.4 percent of people work 45 hours a week or more compared to 18.7 percent in the rest of the UK.
  7. More than half of Londoners commute for more than 30 minutes to get to work compared to one in five in other regions.
  8. Only one in five Londoners use grandparents and others to help with childcare compared to on in three across England.
  9. LB Brent recently decided to close two Children's Centres that include nurseries. LB Camden and LB Bromley have undertaken consultation on proposals to close Children's Centres.
  10. Most primary school settings in the capital provide the free entitlement through three-hour sessions on Mondays to Fridays during term times only. Private providers tend to be more flexible, however, parents often have to pay high prices outside the free entitlement hours.
  11. A full time place in a London nursery can cost up to £22,100 a year in the most affluent areas. See the Daycare Trust 2010 Childcare costs survey
  12. See Table 1 on P9 of the report
  13. See P13 of the report.
  14. See P19 of the report.
  15. See P19 of the report.
  16. The report will be formally agreed on 8 March 2012.
  17. Victoria Borwick AM, Chair of the Health and Public Services Committee is available for interview.  See contact details below.
  18. As well as investigating issues that matter to Londoners, the London Assembly acts as a check and a balance on the Mayor.

For media enquiries, please contact Lisa Moore/ Julie Wheldon on 020 7983 4228/ 4283.  For out of hours media enquiries, call 020 7983 4000 and ask for the London Assembly duty press officer. Non-media enquiries should be directed to the Public Liaison Unit on 020 7983 4100.