Parents' views and use of early learning and childcare: report 2017

Affordability of Early Learning and Childcare

Making ELC more affordable is also identified as one of the key principles for the planned expansion. The Blueprint 2020 document notes that the expansion in entitlement is expected to increase access to affordable childcare, and in this way help to create the opportunity for parents to move into work or study or to increase their working hours, which would be expected to bring financial benefits to these families.

This section considers parents' views and experiences in relation to paying for ELC and affordability issues.

Paying for early learning and childcare

A little more than half (54%) of parents with children eligible for funded ELC indicated that they pay for at least some of the ELC they use for children aged under 6.

Figure 19: Whether parents pay for any of the ELC they use for eligible children

Those who pay for ELC on average spend a total of £494 per month. ^[12] However, this average covers a broad range of costs reported by parents. For example, more than a third of those who pay for ELC indicated that they spend less than £300 per month, and around 1 in 10 spend less than £100. In contrast, around a quarter of those who pay indicated that they spend £700 or more per month on ELC for children aged under 6.

Parents' spend on ELC varied significantly across parent groups. For example, higher income households and those in the least deprived areas spend more on average than other households. Further detail on variation in spend on ELC across parent groups is provided later in this section.

Figure 20: Average monthly spend for all pre-school children (those who pay)

Topping up funded provision

Parents who said they would (hypothetically) use all or almost all of the 1140 hours of funded ELC when it becomes available were also asked if they felt that they would want or need to top up the funded hours with childcare they pay for themselves.

Around 2 in 5 (42%) of all parents with children aged under 6 felt that they would want or need to top up the 1140 funded hours. A further quarter of parents were unsure, and less than a third felt that they would not need to top up the 1140 hours.

Figure 21: Whether would want or need to top up 1140 hours

Affordability difficulties

Survey data indicated that most parents who pay for ELC have experienced some level of affordability difficulties.

The majority (69%) of those who pay for ELC for eligible children aged under 6 stated they have experienced affordability problems in the last 12 months. This included 18% of those who pay for eligible children who have experienced significant affordability problems.

Figure 22: Whether experienced difficulties affording ELC costs in the last year (those who pay for eligible children)

Survey data also suggested that experience of affordability problems is linked to monthly spend on ELC. For example, parents who pay £500 or more per month for their provision were nearly twice as likely to have experienced significant affordability difficulties than those who pay less than £500 per month (25% and 13% respectively).

When asked about the nature of affordability difficulties, nearly all of those with experience of affordability problems mentioned the high cost of childcare (97%). Parents have also experienced other difficulties such as paying childcare fees upfront (26%), costs of trips or other activities (9%), paying refundable deposits (7%), and having to pay other upfront costs such as registration fees (7%).

Figure 23: Nature of affordability problems (those who pay for eligible children)

Note: Parents could select multiple options.

Qualitative participants also highlighted specific costs associated with ELC, such as small weekly charges for snacks and/or a "toy fund", uniforms for children, trips or activities, and indirect costs such as travel. Although these costs are usually relatively low, some felt that these can cause affordability difficulties for those on low incomes. More widely, it was also noted that parents are often unaware of these costs until their child starts attending ELC, and so are unable to plan for these as part of their choice of provider.

"I have to pay lunch and snack charges…and on top of that a toy fund. It is voluntary, but you can't really [not pay]. If I go back onto benefits, £2.50 a week would make a difference."

While a substantial proportion of those paying for ELC have experienced affordability problems, survey data indicated that affordability was rarely a factor in parents' choice of current provider (mentioned by only 8%). It is also notable that very few parents indicated that affordability is a reason for their choosing not to use funded hours for their eligible child; only 2% of these parents mentioned costs associated with ELC, and 4% mentioned travel costs.

Parent F and their partner both work, and use a private nursery for their children to support this. Their 3-year-old receives funding towards the cost of 4 days per week, and they pay the full cost of 3 days per week for their youngest child. Choosing how they use ELC involved considering their relative salaries, and negotiating with both employers to find the most "family friendly" option. Parent F's partner now works part-time with flexible hours to make the cost of ELC sustainable.

Qualitative feedback suggested that, while few see the relative affordability of different providers as a key factor in their choice, cost does play a significant part in parents' decisions on the types of ELC provider they wish to use. This was primarily related to whether parents chose to make use of private providers, but also the number of hours they wish to use.

For example, several parents had made decisions on their working hours (including when returning to work) based on a detailed assessment of the balance between their net income and expected ELC costs. Some also cited "hidden" costs as influencing their decisions, such as having to pay for a full day of private provision to retain a wraparound place, or the addition of an "admin fee" by private providers where parents use their funded entitlement.

"Unable to secure a local authority nursery place at 3 years old [we had] to pay privately for a nursery place, and for us both to submit change of hour requests which were, in part, authorised by our employers. We are of course, grateful to receive [funded hours] however as…the childminder charges a retainer whilst my child is in nursery, it is of little financial benefit to us."

Views and experiences across parent groups

The research identified some significant variation across parent groups in views and preferences on paying for ELC, and experience of affordability difficulties.

This variation primarily related to income, deprivation and whether parents currently use funded hours. For example lower income households and single earners were less likely to pay for ELC, and those that do so typically pay less than others. These parents were also less likely to expect to have to top up the 1140 hours, and more likely to have experienced affordability difficulties. In contrast, those who do not use funded ELC were more likely to pay for their provision, more likely to expect to have to top up the 1140 hours, and more likely to have experienced affordability difficulties. Below we summarise the main variations across parent groups, highlighting where parents were significantly more or less likely than those in other parent groups to give a specific response.

Low incomes/Most deprived areas	Less likely to pay for ELC – and those that do so pay less on average than others. Less likely to expect to have to top up the 1140 funded hours. More likely to have experienced affordability difficulties.
Rural areas	No significant variation.
Single earner households	Less likely to pay for ELC – and those that do so pay less on average than others. Less likely to expect to have to top up the 1140 funded hours. More likely to have experienced affordability difficulties.
Parents of children with ASN	Less likely to pay for ELC – and those that do so pay less on average than others. Less likely to expect to have to top up the 1140 funded hours.
Currently pay for ELC	More likely to expect to have to top up the 1140 funded hours.
Do not currently use funded ELC	More likely to pay for ELC. More likely to expect to have to top up the 1140 funded hours. More likely to have experienced affordability difficulties.
Other significant differences	Parent age: Under 35s are less likely to pay for ELC, and those that do pay less on average than others, but are more likely to have experienced affordability difficulties. They are also less likely to expect to have to top up the 1140 funded hours. Parent gender: No significant variation.