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Parents face rising prices and shortage of childcare places this summer

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Written by: Paloma Kubiak
20/07/2017
Parents in Britain will pay an average of £124 for just one week of holiday childcare, up 4% from the previous year.

In England, holiday childcare costs have risen by 5% in a year, meaning parents now pay an average of £125 for one week of holiday cover. This is more than double what families spend on food and drink, according to the Family and Childcare Trust.

The highest price variations are found in inner London, East of England and the South East. The most expensive holiday childcare was found in the South East, at £495 per week. This is four times as much as the average price for England, though on average, childcare over the summer holiday comes with a £748 price tag for six weeks.

The trust said there is a big gap between the price of after school clubs and holiday childcare as it found parents pay more than twice as much during the holiday as they do during term time.

And this summer in particular, parents are being hit with higher costs and an increasing shortage of childcare places due to a triple whammy of factors: minimum wage changes, pension auto-enrolment and business rate rises.

As part of its annual Holiday Childcare Survey, the Family and Childcare Trust found that only one in four local authorities in England reported having enough holiday childcare for all parents working full time, dropping to one in eight for children with disabilities.

The government’s ‘right to request’ holiday childcare policy (childcare provided by schools during the holidays) introduced in September 2016 “is yet to achieve its potential”. Just 4% of local authorities said it had a positive effect on whether there is enough holiday childcare.

Ellen Broomé, chief executive at the Family and Childcare Trust, said: “Once again rising holiday childcare costs and increasing shortages will leave parents struggling to keep their heads above water.

“Many working parents who cannot call on family and friends to provide informal childcare may struggle to make work pay or remain in work at all this summer.

“The Holiday Childcare Survey 2017 reveals the right to request has had little impact on the availability of childcare places for parents who need holiday childcare. Families need a government strategy to make sure that every parent is better off working after they have paid for childcare, and that there is enough childcare for working parents throughout the year.”

Support with childcare costs

Support with childcare costs, including holiday childcare, is available to parents in some circumstances through tax-relief and benefits, though this support is only available to parents who use Ofsted-registered childcare.

Many activity-based providers, such as sports or drama clubs which run for a few weeks in the summer, as well as childcare providers only looking after children aged over 8, are not required to register with Ofsted.

As such, parents who use government support for childcare costs have a smaller choice of providers, or miss out on financial help.

The Family and Childcare Trust provides a rundown of the schemes available:

Tax-relief schemes

  • Tax-free childcare and childcare vouchers are broadly similar but the key difference is that tax-free childcare will be available to all parents including the self-employed through HMRC, whereas voucher schemes are managed by employers. Voucher schemes are being phased out as tax-free childcare is launched, but parents already using the schemes will be able to choose whether to continue with them or use tax-free childcare; they can’t use both.
  • Tax-free childcare covers 20% of childcare costs up to a maximum of £2,000 per child per year, or £4,000 for disabled children, for parents who are not receiving Universal Credit and where no parent earns more than £100,000 per year. The scheme has a phased roll-out during 2017, starting with families with the youngest children.
  • Childcare vouchers are employer-managed schemes meeting up to £55 of childcare costs per parent per week.

Benefits system

  • Universal Credit is being phased in to replace Working Tax Credit, but full transition for existing claimants will not be completed until early 2020.
  • Universal Credit funds up to 85% of childcare costs up to a maximum of £175 per week for one child or £300 per week for two or more children.
  • The childcare element of Working Tax Credit funds up to 70% of childcare costs up to the same thresholds as for Universal Credit with additional funding for households on housing or council tax benefits.

Student parents

  • The Childcare Grant supports undergraduate parents in England and Wales, and the Childcare Fund has a similar function in Scotland. The Care to Learn scheme supports further education students under 20. Parents over 20 in further education have access to the Discretionary Learner Support Fund (England), the Discretionary Fund (Scotland), and the Financial Contingency Fund (Wales) – administered through colleges.

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