We all know that childcare costs in the capital are eye-watering and they have sky rocketed over recent years.
Childcare will set you back around 30 per cent more in London than in the rest of the UK with the average cost of 25 hours of childcare in a London nursery standing at £152.06, compared with the national average of £117. Added to this, parents in London usually need more hours due to longer commutes, and jobs with longer, more antisocial hours.
The government’s recent announcement that free childcare will be extended from 15 hours to 30 hours will have filled many London parents with optimism. For all parents of 3 and 4 year olds, who work at least 16 hours per week at the national living wage, and who earn less than £100,000 the extension will be available from mid-2017.
It is anticipated that this could increase the numbers of parents who are able to benefit from free childcare, as they will no longer have to pay for additional childcare hours which many can ill-afford.
However, there are strong concerns that the government has not allocated sufficient money to cover the extra hours.
Government funds currently fail to meet the true cost of the 15 hours on offer. The National Day Nurseries Association estimates that, nationally, providers are already left with a shortfall of £700-£800, per child, per year.
Childcare providers make up for this by charging parents high hourly rates for the other, non-free, hours of childcare which they provide. If they are forced to double the number of free hours, not only will their losses increase, but they will also have fewer resources left to deliver childcare they can charge for. This will reduce the amount of money they earn to subsidise the loss-making free hours.
Added to this, with the introduction of the National Living Wage, and the ever inflating cost of property in London, providers’ operating costs are increasing all the time.
There are widespread concerns that without sufficient funding to cover both the cost of delivering the additional free hours, and to make up for the existing funding shortfall, London’s childcare challenge could worsen.
Nurseries may have to opt out of the free childcare scheme, or face closure. And the annual struggle by London’s parents, to find free nursery places would, become even more fraught.
The London Assembly Economy Committee will be looking into the challenges nurseries will face, and the financial implications behind the extension, along with the Greater London Authority’s role.
How will nurseries and childminders cope with bigger entitlements, along with increased operating costs and an increase in the National Living Wage for employees?
The level of demand for the extension is hard to forecast. How many parents will fit the eligibility criteria and be entitled to the extension?
Is the Mayor doing enough to help provide adequate affordable childcare in London, and if not, what more could he, or the next Mayor, do?
Tune into the meeting on childcare provision in London on Thursday 21 January at 10:00am.
We will hear from childcare providers – with the Family and Childcare Trust, the Pre-School Learning Alliance and the National Day Nurseries Association, local boroughs – with Merton and Islington and the Deputy Mayor for Education and Culture, Munira Mirza.
You are welcome to attend the public meeting or you can tune into the webcast here.
Fiona Twycross AM is Chair of the London Assembly Economy Committee.
Read more about the work of the Committee here.
