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This blog post was published under the 2015-2024 Conservative Administration

How we are driving down the costs of childcare

Posted by: , Posted on: - Categories: Childcare, Funding

The UK has some of the highest-quality childcare provision in the world with 96% of early years settings rated by Ofsted as good or outstanding, but it is also one of the biggest costs facing working families today.

That’s why we have announced new plans to improve the cost, choice and availability of childcare that will benefit hundreds of thousands of parents across the country.

Here is what you need to know about how we are driving down the cost of childcare for parents.

What have you announced?

To drive down costs for providers and parents, a new consultation will look at increasing the number of children that can be looked after by each staff member in early years settings.

It will propose changing staff-to-child ratios from 1:4 to 1:5 for two-year-olds, giving providers more flexibility in how they run their businesses while maintaining safety and quality of care.

This enables providers to keep costs as low as possible for parents.

Why have you done this?

With the cost of living continuing affect families, we are committed to doing everything we can to support families with their finances while keeping people in high-wage, secure jobs that help grow the economy.

These new plans will ensure high-quality and affordable childcare is accessible to all.

Are you doing anything to help childminders as well as nurseries?

Yes, we also plan to increase choice and affordability for parents by taking action to open up the childminder market.

While early years settings such as nurseries are the most popular option for families, childminders are generally the most affordable and flexible form of childcare.

While the average cost of a two-year-old attending a nursery for 50 hours a week in England is £265 per week, this compares to £236 with a childminder.

The government will support more people to become childminders in several ways. These include reducing the upfront costs of becoming a childminder via financial support, and we are consulting on giving childminders greater flexibilities within the ratios when looking after their own children or siblings of other children.

What childcare support is already available for my family?

We have spent more than £4 billion each year for the last five years helping families with the cost of childcare, but almost one million eligible families have not taken up their right to Tax-Free Childcare, which is worth £2,000 per year or £4,000 for children with disabilities.

Universal Credit Childcare allows families to reclaim 85% of their childcare costs, worth up to £1,108 per month.

The government also offers 15 hours per week of free childcare or early education for all 3- and 4-year-olds, rising to 30 hours for working families, and 15 hours for disadvantaged 2-year-olds.

The Government recently announced that eight million of the most vulnerable households (around a third of all UK households) will receive £1,200 this year and all families will receive £400 – this is on top of changes to Universal Credit, National Living Wage and National Insurance thresholds, so that people keep more of what they earn.

You can find out more info on support available on the Childcare Choices website.

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