APPENDIX 7: BRIEFING NOTE ON CHILDCARE
COSTS AND SPENDING ESTIMATES PREPARED BY DR GILLIAN PAULL,
1 DECEMBER 2014|
This note reviews the available evidence on childcare
costs; total parental spending on childcare; and the level of
public expenditure on childcare in the UK. It also assesses the
evidence behind the perception that parents in the UK face high
childcare costs while government spending is also high in comparison
to other countries.
There are several sources of information on childcare
costs in the UK, but almost all have limitations in their scope
or methodology of data collection (details of the sources and
weaknesses are summarised in table 1 in the Annex to this note).
Comparability between sources is problematic due in part to differences
in the categorisation of settings and child age and in the timing
of surveys, but mainly because they measure different aspects
of cost. In particular, the sources consider delivery costs (Ceeda
report), prices or fees (Family and Childcare Trust, Laing &
Buisson and DfE's Childcare and Early Years Providers Survey)
and amounts spent by parents (DfE's Childcare and Early Years
Survey of Parents). While these different measures are related,
they are each subject to their own market and policy influences
and need not exhibit similar levels or trends.
A summary of the key characteristics of costs in
the UK is presented in the following subsections, but further
details can be found in the referenced tables which are presented
in the annex at the end of this note.
Hourly delivery costs / prices / amounts paid
Figure 1 presents the average hourly delivery costs,
prices and amounts paid by parents from four different sources.
The diversity in categorisation of type of care which makes it
difficult to draw direct comparisons across these measures is
highlighted in the labels below the horizontal axis.
Most average hourly cost measures are around £4
and generally lower for older children. The average delivery cost
for two year olds is notably higher at almost £6 but this
measure is only for good and outstanding rated settings and is
the most recent set of estimates, which may account for the higher
cost. It may also indicate that prices incorporate some cross-subsidisation
from older to younger children in covering delivery costs. The
average (mean) hourly amounts paid by parents are also higher
(at around £5), but the median amounts (that paid by the
family exactly in the middle of the distribution) are around £4
(shown in table 7), indicating a 'long tail' of a few families
paying higher amounts. The average hourly amounts paid for nursery
classes and playgroups/pre-schools are lower than the other measures
(just over £2), but this may reflect a large proportion of
free or subsidised hours delivered by these types of settings
which bring down the average cost paid by parents.
Figure 1: Average Hourly Cost for Different
Sources: See tables 2, 3, 5 and 7 in the Annex.
Amounts spent by families
According to DfE's Parents' Survey, families with
only pre-school childcare who paid for childcare spent a mean
total amount of £94 each week in 2012/13, although the median
amount was £74 (again indicating a 'long tail' of a few families
paying larger amounts) (table 8). Unsurprisingly, the average
was lower (mean of £62 and median of £28) for families
with both pre-school and school age children.
Grossing up these weekly amounts shows that the mean
annual amount spent by families with only pre-school children
was £4,888 in 2012/13, while half of these families paid
less than £3,848. The average annual amount was £3,224
for families with both pre-school and school children, with half
paying less than £1,456. It should be noted that these amounts
are considerably less than the example cases presented in the
reports from the Family and Childcare Trust which include £7,549
a year for a family with a child in part-time nursery care and
one in an after school club and £11,700 for a family with
two children in full-time childcare. While these examples highlight
how much some families might potentially pay for such childcare
arrangements, they are not typical of what most families do pay.
The Family and Childcare Trust report that the average
price of childcare (for children under two in nurseries) has risen
27 % over the last five years has been widely cited. However,
much of this change occurred in 2009 to 2010 and the growth in
prices has slowed substantially in recent years to just 2 % in
the past year (figure 2(a)). The Family and Childcare Trust reports
also highlight a similar, more pronounced pattern for children
over age two in nurseries. While Laing & Buisson's measure
of fee inflation for full day nurseries is lower, it has also
shown a slight downward trend in recent years.
Figure 2: Comparison between annual growth
in nominal and real prices
Sources: See tables 3 and 4 in the Annex. The
inflation adjustment uses the RPI index.
Figure 2(b) presents the same trends in nursery price
inflation, but adjusted for RPI to show how childcare prices have
changed relative to the prices of other goods and services. While
rising substantially faster than the general price level during
2009 and 2010, price increases have moderated in more recent years
to the point where real (inflation adjusted) prices have fallen.
This pattern in childcare prices also holds for childminders (table
3) and is also evident in fewer providers reporting that they
have increased fees in recent years (table 6).
The average hourly amounts spent by parents on childcare
in day nurseries, childminders and playgroups/pre-schools have
also fallen in recent years (2011 to 2013) after exhibiting much
higher growth during 2009 to 2011 (table 7). The contrary rise
in recent years for spending for nursery schools and nursery classes
may be due to measurement issues due to the small sample for nursery
schools and to the low price level for nursery classes.
Total Parental Spending on Childcare
There do not appear to be reliable estimates of the
total private spending on childcare. Laing & Buisson estimate
the total value of the day care nursery market to be £4.6
billion (Blackburn (2013)), but this only captures part of the
childcare market and does not distinguish between the amount paid
by parents and that funded by public support. A very approximate
measure can be derived from DfE's Parents' Survey which suggests
that parents in England spend between £5.1 billion to £7.0
billion on childcare each year.
However, this may overstate private spending as parents may fail
to deduct reimbursements received from tax credits when reporting
their net childcare payments in the survey. Given that current
estimates of the value of these reimbursements is £1.5 billion,
this could mean that total private spending is notably lower.
In addition, a similar approximation based on the previous year's
survey suggested a range of total spending between £4.3 billion
and £5.9 billion, highlighting considerable randomness in
the estimate across years.
Public Expenditure on Childcare and Early Education
Estimates of total public spending on childcare (covering
children of all ages) are presented in figure 3 (detailed in table
9), derived from the Government response to follow-up requests
provided to this Committee in July 2014 (Written evidence from
the Department for Education ACC0068).
Figure 3: Public expenditure on childcare
and early education
Sources: see table 9 in the Annex.
These estimates are slightly revised from those provided
in More Great Childcare published by DfE in January 2013
(Department for Education (2013)). Estimates presented in The
Green Budget published by IFS in February 2014 were slightly
lower (total spending of £4.2 billion) because the IFS estimate
did not include spending on the free entitlement for the second
highest income band of two year-olds; it used take-up data rather
than allocated expenditure for the cost for the lowest income
band of two year-olds; and it used older data for the three and
four old year old entitlement spending and WTC expenditure on
childcare (table 9). All information on expenditure is derived
from government publications and there is no independent source
to verify it.
Current public expenditure totals £5.2 billion,
with just over half (56 %) spent on the early education entitlement.
According to current plans, total expenditure will rise by £1.2
billion during the next Parliament, with an additional £0.6
billion of spending for the introduction of Universal Credit (£0.2
billion for support for parents working less than 16 hours a week
and £0.4 billion for the increase to 85 % reimbursement
for childcare costs) and a net addition of £0.6 billion for
tax-free childcare (a gross cost of £1 billion minus a reduction
of £0.4 billion in payments for Employer Supported Childcare).
With these changes, the majority of expenditure for childcare
support (55 %) will become contingent on parents' working.
OECD Comparison of Childcare Costs and Public Spending
There is a widespread perception that parents in
the UK face high childcare costs while government spending is
also high in comparison to other countries. The primary source
of this perception is two reports based on data from the OECD
Family Database. These reports have been critiqued in Penn &
Lloyd (2013) who note that the OECD data suffers from several
general limitations including problems arising from the variation
in the categorisation of care and early education across countries;
from the regional diversity in policy in some countries; and from
the fact that some of the source data is quite outdated. They
also note a lack of clarity on how the data was compiled from
the national levels and what mechanisms were used within countries
to provide the data. Moss & Lloyd (2013) suggest further concerns
over the public spending estimates used for the UK. This section
summarises and reviews the evidence underlying the criticisms
of the OECD comparisons, drawing on some additional data sources
and calculations which are explained and sourced in table 10 in
The OECD publication PF3.4: Childcare support
(OECD (2014)) contains the most recently updated analysis of comparative
childcare costs based on data for 2012. This analysis suggests
that the UK has unusually high childcare costs using two types
(a) A comparison of average fees for a two year-old
child in full-time (40 hours a week) accredited centre-based childcare
as a proportion of average gross annual earnings. In 2012, this
proportion was 26.5 % for the UK compared to the OECD average
of 14 %, ranking the UK the 6th highest out of 34 countries.
(b) A comparison of net childcare costs as a
proportion of net income for two example types of families, both
with a two year old and three year old child in full-time accredited
centre-based childcare. For a dual earner family with gross earnings
of 150 % of the average, the estimated proportion of income spent
on childcare is 34 % in the UK, compared to an OECD average of
13 %, ranking the UK the highest cost country. However, for a
lone parent family with earnings of 50 % of the average, the estimated
proportion of income spent on childcare is 8 % in the UK, compared
to an OECD average of 14 %, ranking the UK the 22nd country out
of 34 countries.
With respect to the first comparison, the following
points should be noted:
many countries (but not the UK), direct provider subsidies and
fee caps mean that childcare fees are often reduced at the point
of use for families in particular circumstances and these reductions
"can be both widespread and substantial" (OECD (2014),
page 2). This will overstate relative costs paid by parents in
the UK as fees do not include the public subsidies.
comparison is only for a two year old child in accredited centre
based care and may not reflect international variation across
age groups or other types of care (including childminders and
the use of informal childcare in the UK).
average fees for the UK correspond to £4.04 an hour which
is similar to the hourly prices for the UK presented above. However,
these prices do not allow for the free early education entitlement
for three and four year olds in the UK which suggests the UK would
rank as having lower costs for these older age groups.
With respect to the second comparison, the following
points should be noted:
is a fairer comparison than considering gross fees because it
includes the support from tax credits in the UK. However, it still
does not allow for the early education entitlement for the three
year old which is estimated to reduce the proportion paid by the
dual earner family to 29 % (ranking the UK as the 6th highest
country) (see table 10).
relatively high cost ranking for the UK for the dual earner family
and relatively low ranking for the lone parent family reflects
the fact that UK support is more targeted towards lower income
families in the UK than in the comparison countries.
extent to which the two selected examples accurately represent
relative childcare costs across countries depends upon the degree
to which they represent typical families. However, the dual earner
family in the UK has a gross income of £47,585, placing it
in the top income quintile for all households in the UK and making
it unlikely that the family would be eligible for the childcare
element of WTC. In addition, estimated childcare costs assume
families use 40 hours of average-price childcare for both children,
which may overstate actual spending. For example, the lone parent
in the UK is assumed to be paying more for childcare than their
gross earnings prior to any reimbursement. These assumptions about
usage may not only affect the international comparisons, but also
mean that the absolute proportions for the UK do not reflect average
The perception that the UK government spends comparatively
more on childcare and early education than other countries is
based on the OECD publication PF3.1: Public spending on childcare
and early education (OECD (2013)). This was cited in More
Great Childcare: "As a share of GDP, the Government spends
around 40 per cent more than the OECD average on childcare"
(Department for Education (2013)). It was reiterated in the Government
response to follow-up requests to the Committee: "According
to the most recent figures, in 2009, average public expenditure
on childcare amongst OECD member countries was 0.3% of GDPthe
UK spent 0.5% of GDP. This was over 40 % more than the OECD average"
(Written evidence from the Department for Education [ACC0068]).
The original source of this evidence is chart PF3.1.A
in OECD (2013). This chart shows that "public expenditure
on childcare and early education services in 2009" for the
UK was 1.1 % of GDP, placing the UK as the 6th highest spender
in 37 countries. The 1.1 % is divided into 0.5 % on "childcare"
and 0.7 % on "pre-primary spending". Although the data
source for the UK is cited as the OECD Social Expenditure database,
the database contains only the 1.1 % figure, with no original
source reported or any record or explanation of the division into
childcare and pre-primary spending.
This analysis should be treated with caution for
several reasons (several of which were recognized in the Government's
response to this committee):
data is several years old and relative spending and relative GDP
may have changed. Indeed, spending on childcare and education
for children under five in the UK as a percentage of GDP reached
a peak in 2009/2010 (figure 8.1, Brewer et al (2014)), although
may have similarly peaked in other counties.
to the OECD publication, the measure includes spending on childcare
and primary school for all children under the age of six. This
is not, therefore, a comparison of childcare spending alone but
a comparison of a mixture of childcare and school expenditure.
Moreover, the balance of the mixture varies across countries and
those with younger school entry ages (such as the UK) will be
more heavily weighted towards the higher costs of school.
are problems capturing the spending by local governments in some
countries which means that spending may be under-stated in these
countries (but not in the UK).
the most serious problem is that the number cited for the UK appears
inconsistent with UK data sources (as pointed out in Moss &
Lloyd (2013)). The OECD comparison implies that UK spending in
2009 was £15.6 billion on children under the age of six,
with £7.1 billion spent on childcare (OECD GDP for the UK
was £1420 billion in 2009). However, even the most generous
UK-sourced estimates on spending for 2009 suggest that the total
spending on childcare and school for children under age six was
at most £10.9 billion in 2009 (0.8 % of GDP) and the spending
on childcare £4.2 billion (0.3 % of GDP) (see Annex table
10). These UK-sourced figures suggest that the UK was around the
OECD average for both measures. However, the issues concerning
the UK data also raise questions about the reliability of the
OECD data for other countries.
In summary, this review suggests that the evidence
base for the perceptions that parents face unusually high childcare
costs and that public spending on childcare is unusually high
in the UK compared to other countries is limited and questionable.
Blackburn, P. (2013), Children's Nurseries: UK
Market Report 2013 Twelfth Edition, Laing and Buisson
Brewer, M., Catton, S. and Crawford, C., (2014),
"State support for early childhood education and care in
England", chapter 8 in The IFS Green Budget: February
2014, Institute for Fiscal Studies
Bryson, C., Kazimirski, A. and Southwood, H., (2006),
Childcare and Early Years Provision: A Study of Parents' Use,
Views and Experience, Department for Education and Skills
Research Report no. 723
Ceeda, (2014), Counting the cost: An analysis
of delivery costs for funded early years education and childcare,
Daycare Trust, (2008), Daycare Trust Childcare
costs survey 2008
Daycare Trust, (2009), Daycare Trust Childcare
costs survey 2009
Daycare Trust, (2010), Daycare Trust Childcare
costs survey 2010
Daycare Trust, (2011), Daycare Trust Childcare
costs survey 2011
Daycare Trust, (2012), Daycare Trust Childcare
costs survey 2012
Department for Education, (2013), More great childcare:
Raising quality and giving parents more choice, January
Family and Childcare Trust, (2013), Childcare
Costs Survey 2013
HM Treasury, (2013), Public Expenditure Statistical
Analyses 2013, July
HM Treasury & HMRC, (2009), Tax ready reckoner
and tax reliefs, December
HMRC, (2011), Child and Working Tax Credits Statistics:
Finalised annual awards 2009-10
HMRC, (2014), Childcare Payments Bill 2014: Impact
Written evidence from the Department for Education
(ACC0068), "Q13: Costs to Government of subsidising childcare"
in "Government response to follow-up requests".
Huskinson, T., Pye, J., Medien, K., Dobie, S., Ferguson,
C. and Gardner, C. with Gilby, N., Littlewood, M. and D'Souza,
J., (2013), Childcare and Early Years Survey of Parents 2011,
Department for Education SFR08/2013, January
Huskinson, T., Kostadintcheva, K., Greevy, H., Salmon,
C., Dobie, S., Median, K., with Gilby, N., Littlewood, M. and
D'Souza, J., (2014), Childcare and Early Years Survey of Parents
2012-2013, Department for Education SFR06/2014, January
Kazimirski, A., Smith, R., Butt, S., Ireland, E.
and Lloyd. E., (2008), Childcare and Early Years Survey 2007:
Parents' Use, Views and Experiences, Department for Children
Schools and Families Research Report DCSF-RR025
La Valle, I., Finch, S., Nove A. and Lewin, C., (2000),
Parents' Demand for Childcare, Department for Education
and Employment, Research Report RR176, March
Moss, P., and Lloyd, E., (2013), "Is England
really near the top of the league?", Nursery World,
National Audit Office, (2012), Delivering the
free entitlement to education for three-and four-year-olds,
OECD, (2013), PF3.1: Public spending on childcare
and early education, OECD Family Database Indicators, July,
most recent version available at
OECD, (2014), PF3.4: Childcare support, OECD
Family Database Indicators, May, most recent version available
Penn, H. and Lloyd, E., (2013), "The Costs of
Childcare", CWRC Working Paper no. 18, July
Rutter, J. and Stocker, K., (2014), Childcare
Costs Survey 2014, Family and Childcare Trust
Smith, R., Poole, E., Perry, J., Wollny, I. and Reeves,
A. with Cashall, C. and d'Souza, J., (2010), Childcare and
early years survey of parents 2009, Department for Education
Research Report DFE-RR054, October
TNS BMRB, (2014), Childcare and Early Years Providers
Survey 2013, Department for Education, September
Woodland, S., Miller, M., and Tipping, S., (2002),
Repeat Study of Parents' Demand for Childcare, Department
for Education and Skills Research Report RR348
Table 1: Sources of information on childcare
|Ceeda (funded by Pre-school Learning Alliance)
||Average hourly delivery cost for funded two, three and four year olds in PVI nurseries and playgroups with a good or outstanding Ofsted rating in July 2014.
Data collected from 100 settings in England completing attendance and resource usage diaries over two weeks.
|No information for maintained settings, for childminders, for settings with lower Ofsted ratings or for children under the age of two.
Information only for July 2014 and no information on changes over time.
Relatively low survey response rate although not untypical for this type of work requiring heavy data collection demands over a short, inflexible period.
|Prices or fees
|Daycare Trust / Family and Childcare Trust
||Annual information since 2002 on average prices for 25 weekly hours (and 50 weekly hours) for children under age two and two years or over for nurseries and childminders.
Data collected from a survey of Local Authority Family Information Services (or equivalents) in Britain, asking them to estimate an average price paid by parents for the different forms of childcare.
|Unclear how Local Authorities estimate average price and may contain an element of subjectivity.
NOTE: This survey does not collect information on the amounts spent by parents but the reports present example calculations from the average prices. These calculations make no allowance for the free entitlement; assume families pay average prices and use high amounts of formal childcare; and use an arbitrary benchmark of the average mortgage payment for all UK mortgage holders.
|Lang and Buisson||Annual information since 2002 on fees for children's nurseries offering full-day care in the UK. Data collected as part of an annual market report from a sample of up to 15 % of these nurseries.
||No information on settings other than full-day nurseries.
Report only available by private purchase.
|Childcare and Early Years Providers' Survey (DfE)
||Information on average fees for PVI and maintained group-based providers and childminders in 2013 and on the proportions of providers reporting that they have raised fees biannually since 2007.
Data collected from large scale annual surveys in England conducted since 1998.
|No information on fees over time at present.
|Amounts spent by parents
|Childcare and Early Years Survey of Parents (DfE)
||Periodic information on total amount spent by parents on childcare and hourly amounts spent by type of provider.
Data collected from several large scale surveys in England since 1999.
|Spending information is not presented consistently across reports and highly variable patterns of change suggest a degree of inconsistency in data collection between surveys.
Reported spending is "out of their own pocket" excluding money paid directly to providers (i.e. early entitlement funding) but it is highly likely that the reported amounts do not allow for reimbursements through tax credits.
Hourly payments are calculated as the total payment divided by total hours used and are subject to variation due to the use of free entitlement hours or subsidised hours.
Notes: Information on the amounts paid for childcare
is also collected in the Family Resources Survey (DWP), but this
data source has typically been used for modelling labour market
behaviour rather than providing childcare statistics
Table 2: Hourly costs of delivery in July
|Nurseries and playgroups
||Average hourly cost excluding unpaid staff contribution
||Average hourly cost including unpaid staff contribution
|Children aged 2 years old
|Childcare aged 3 and 4 years old
Source: Ceeda (2014), tables 2 and 3.
Table 3: Hourly childcare prices 2007-2013
(Family and Childcare Trust Survey)
Year of survey
(under 2 years)
(2 years and over)
(under 2 years)
(2 years and over)
Sources: Daycare Trust (2008, 2009, 2010, 2011,
2012), Family and Childcare Trust (2013), Rutter &
Stocker (2014). Notes: Reports contain prices from previous calendar
year and most recent prices are for 2013. Numbers in bold correspond
to the 27 % reported for Britain in the 2014 report (numbers for
Britain were not published prior to the 2012 report).
Table 4: Annual nursery fee inflation
for children aged under five 2002-2013 (Laing & Buisson)
||Real growth using RPI
||Real growth using CPI
Sources: Fee inflation from Blackburn (2013), table
3.5; and real growth is author's own calculations using RPI and
CPI from Office of National Statistics (
Table 5: Mean childcare fees in 2013 (Childcare
and Early Years Providers Survey)
|Children aged under 2
||Children aged 2
||Children aged 3-4
||Children aged 4 and under
|Full day care||£4.40
Source: TNS BMRB, (2014), table 10.3. Notes: The
mean childcare fee for all ages of children for childminders is
reported in the text as £4.10.
Table 6: Proportion of providers who have
increased fees (Childcare and Early Years Providers Survey)
|Full day care
|In last six months
||In last year
||In last two years
||In last six months
||In last year
||In last two years
||In last six months
||In last year
||In last two years
Source: TNS BMRB, (2014), table 10.4.
Table 7: Hourly childcare expenditure
(Childcare and Early Years Survey of Parents)
|Date of survey
||Playgroup or pre-school
|Sep 04-Jan 05||£3.39
|Oct 11-May 12||£4.38
|Nov 12-June 13||£4.44
|Oct 11-May 12||£5.25
|Nov 12-June 13||£4.95
Sources: Bryson et al (2006), Kazimirski et al
(2008), Smith et al (2010), Huskinson et al (2013), Huskinson
et al (2014).
Table 8: Weekly childcare expenditure
for all children (Childcare and Early Years Survey of Parents)
|Date of survey
||Families only with pre-school children
||Families with pre-school & school age children
||Annual change in mean
||Annual change in median
||Annual change in mean
||Annual change in median
|Oct 2011-May 2012||£79
|Nov 2012-June 2013||£94
Sources: La Valle et al (2000), Woodland et al
(2002), Smith et al (2010),
Huskinson et al (2013), Huskinson et al (2014).
Table 9: Public spending on early education
and childcare for all children
|Public spending in £ billion
||Early Education Entitlement
||Tax Credits and Benefit Disregards
||Employer Supported Childcare (vouchers)
||Tax free Childcare (from Autumn 2015)
|3 & 4 year olds
2 year olds
2 year olds
||Increase with UC (Nov 2014)
||Increase with 85% UC (from 2016)
|DfE More Great Childcare
|IFS Green Budget
falling to £0*
|£0.8* rising to £1.5*
falling to £0.4*
|£0.8* rising to £1*
Sources: Department for Education (2013), Brewer
et al (2014), Department for Education (2014). Notes: * denotes
forecast at the time and italics denote "future" spending.
Spending on the Early Education
Entitlement covers only England, while the remaining spending
items cover the UK. The fall in spending on Employer Supported
Childcare to £0.4 billion is derived from the estimates that
Tax Free Childcare spending will rise to £1 billion and the
"steady state additional spending" will be £0.6
billion (HMRC (2014), Written evidence from the Department for
Table 10: Calculations and sources for
||Calculation and additional sources
|Spending on childcare for a two year-old child is 26.5 % of average gross annual earnings in the UK.
||Chart PF3.4.A shows this proportion as 53 %, but according to the accompanying text and for consistency with charts PF3.4.B and PF3.4.C, this proportion appears to be for a two-year-old and three-year-old. It has therefor been halved to obtain the proportion for a single child (consistent with the chart title and figures presented in previous versions of the note).
|Average fees for the UK correspond to £4.04 an hour.
||The OECD figure for annual average gross earnings for the UK in 2012 is £31,723 (OECD database) 26.5 % of which divided by 52 weeks of 40 hours generates an hourly price of £4.04
|Allowance for the early education entitlement reduces the proportion paid by the dual earner family to 29 %.
||The free entitlement covers 570 hours (15 weekly hours x 38 weeks) of the 4,160 hours used by the family (80 weekly hours x 52 weeks), reducing the proportion of net income spent on childcare to approximately 29 % (= 34 % multiplied by 3590/4160).
|UK estimate that total spending on children under age six was at most 10.9 billion in 2009.
||Spending on the childcare element of WTC was £1.6 billion (HMRC (2011); on Employer Supported Childcare was £0.6 billion (HM Treasury & HMRC (2009)) and on pre-primary and primary education for children under age five was £4.8 billion (table 5.2, (HM Treasury (2013)), totalling £7 billion or 0.5 % of GDP. Allowing for a proportion of the remaining primary education (£3.9 billion of £25.2 billion (table 5.2, (HM Treasury (2013))) to be spent on five year olds in schools, generates a total spend of £10.9 billion or 0.77 c of GDP.
|UK estimate that spending on childcare was £4.2 billion in 2009.
||Spending on the childcare element of WTC was £1.6 billion (HMRC (2011)); on Employer Supported Childcare was £0.6 billion (HM Treasury & HMRC (2009)) and an estimated approximate £2 billion on the early education entitlement (prorated for the UK from a cost of £1.6 billion in England in 2010/11 (National Audit Office (2012)).
380 In particular, delivery costs are influenced by
input prices (e.g. staff wages; rents; business rates; and other
business costs); the quality/characteristics of care (e.g. staff
qualification levels; flexibility; catering for special needs);
and efficiency of delivery. Prices (or fees) are influenced by
the delivery cost and levels of profit/surplus dependent upon
demand and degree of market competition. Amounts paid by parents
are influenced by hourly prices; the availability of free care
or government subsidises; and by parental choices over how much
to use (affecting weekly or annual amounts paid) and about type/quality/characteristics
of care to use (affecting hourly amounts paid). Back
This is estimated using figures from Huskinson et al (2014) as
4.2 million families using childcare (table 2.2) multiplied by
0.59 (the proportion who pay for childcare in table 5.1) multiplied
by £54 (the mean weekly payment for those who pay for childcare
in table 5.3) which equals spending of £134 million each
week. Assuming that parents' expenditure on childcare may range
between 38 weeks (covering term-time only) and 52 weeks each year
generates a range of estimated total annual expenditure of between
£5.1 billion and £7.0 billion. Back