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Cost of living: Calls for universal free childcare as nursery fees soar

childcare Baby toddler early development. Wooden stack and count rainbow colored learning game. Child learn colors and numbers
Childcare: The TUC’s analysis shows that the average full-time nursery bill for a family with a child under two has risen from £11,300 in 2012 to £14,200 in 2021 — an increase of 26%. Photo: Getty

The cost of childcare for parents with children under the age of two has skyrocketed by nearly £3,000 a year in England over the last decade.

One in three (32%) working parents with pre-school children spent more than a third of their wages on childcare, according to new analysis from the Trades Union Congress (TUC).

One in seven (15%) said they spent more than half of their pay on childcare, the TUC poll, published in March 2022, found.

The TUC’s analysis also showed that the average full-time nursery bill for a family with a child under two rose by 26% to £14,200 last year, from £11,300 in 2012.

The union body is calling for universal free childcare for pre-school children.

The UK government spends less than 0.1% of gross domestic product (GDP) on childcare. This is the second lowest investment in the Organisation for Economic Co-operation and Development (OECD).

Read more: Women facing 'catch 22' situation over soaring childcare costs and falling maternity pay

The TUC is also asking for better pay and conditions for the childcare workforce, and a new childcare partnership forum.

It comes as the Women’s Budget Group revealed that £28.2bn in economic output is lost each year due to the absence of around 1.7 million women in the workforce who miss out on paid work due to childcare issues.

Over the past 10 years, with East of England experiencing the biggest surge in childcare fees of 42% followed by the West Midlands at 38%.

London and the South East were the only two regions in England that had monthly childcare fees of £1,000 or more in 2012. Now, every nursery in England is charging this amount as a minimum per month on average.

The data also predicted that if this trend continues then parents in inner London will have to pay fees as high as £2,000 a month iby 2026 and the East of England will see fees of £2,000 by 2027.

Read more: Cost of living crisis: How to cut the costs of childcare

“High-quality childcare should be affordable for all parents. It’s how we keep women in work and close the gender pay gap," TUC general secretary Frances O’Grady said.

“But in this cost of living emergency, working families are spending more and more of their pay packets on childcare bills, while their wages stagnate. This is putting huge stress on family budgets at the same time as other living costs are shooting up.”

Conservative leadership candidate Liz Truss has pledged to follow through on government plans to change staff-to-child ratios for young children.

But the TUC has warned that plans to reduce staffing ratios will not drive down the costs of childcare. It said this instead would damage quality, and could force more workers out of the sector due to unmanageable workloads.

The union body argued that the childcare industry needs urgent investment and that ministers must immediately raise spending to at least the OECD average of 0.7% of GDP.

Read more: Working parents with pre-school children spend a third of pay on childcare

Megan Jarvie, managing director of Coram Family and Childcare said: "Childcare is a key part of our country's infrastructure. It enables parents to work and helps to boost young children's outcomes.

“But the high costs faced by families mean that it is out of reach for too many families.

"Parents, and mothers in particular, are frozen out of work and children are missing out on this golden opportunity to improve their life chances and narrow the achievement gap between disadvantaged children and their peers."

Watch: How to save money on a low income