New Report Analyses How the Cost of Childcare Has Changed

Female teacher teaching kids and reading a book with them in classroom

New Report Analyses How the Cost of Childcare Has Changed

Childcare costs are always a sensitive topic. No childcare setting charges parents any more than they need to run a sustainable business, but the headlines are always about how much the spend is. A new report from the Institute of Ficscal Stuides, published on 20th May, sheds new light on the subject, identifying some of the drivers behind the costs to families and the extent to which support is actually taken up.

A key conclusion is that half of 3 and 4 year olds are not taking up the full 30 hours offer, and while 90% of households are aware of the universal 15 hour entitlement, just 40% had heard of Tax Free Childcare in 2019. Even once it was explained, nearly 40% of eligible families indicated they would not apply, citing the admin burden or due to misunderstanding the eligibility criteria.  

The report also raises the issue of location. It is well known that childcare costs vary across the country and the point has often been made that funding needs to take this into account. Perhaps surprisingly, the report found that the lowest median spend was actually in London, which was also where the highest overall costs were found. This may illustrate the complexity of childcare funding and the need for nuanced decisions instead of broad brush policies.

You can read the full report here.