Many parents 'paying more for childcare than average mortgage'

The report said that the current system is not working for anyone

Many parents in Britain are paying more for childcare annually than the average mortgage bill, according to a report.

The Family and Childcare Trust's annual report says average fees for one child in part-time nursery and another in an after-school club are £7,549 per year.

Full-time childcare cost for a family with a two-year-old and a five-year-old child are estimated at £11,700 a year.

The report compares the costs to the average annual UK mortgage payment, which was estimated at £7,207 in 2012.

The trust says childcare in England, Wales and Scotland is becoming increasingly unaffordable with a 27% rise in costs since 2009, while wages have remained static.

This is despite successive governments recognising its value to children, families, society and the economy and spending £6bn on supporting childcare every year, it adds.

The report notes that during the course of the current Parliament, the government will have put an additional £1bn into supporting childcare.

All children in England, Scotland and Wales qualify for part-time free early education in the term after their third birthday.

In England, they receive 570 free hours every year, but even with this help some parents are contributing a substantial part of their income to childcare.

In 2012, only Swiss parents contributed a higher share of their salary than British parents, who on average spent 26.6%.

The average costs for all OECD countries is 11.8% of parental net income.

The report said that the current system was not working for anyone.

"Children are losing out on vital early education and families remain trapped in poverty because they cannot make work pay.

"Childcare providers struggle with debts. Women fail to return to the labour market after they have children and the economy loses their skills and their taxes."

The study is based on information gathered by the trust from local authority family or children's information services in England, Wales and Scotland.

Lynne Keeble gave up her job because she was paying for before and after-school care as well as a full-time childminder for her three children.

She said she was forced to quit a job in London she loved because of the costs of childcare for her children, aged six, four and one.

Better use of school premises and children's centres for childcare is urged

"You can't go to work and then have nothing at the end of the month to show for it," she said.

Anand Shukla, chief executive at the Family and Childcare Trust, called on the government to extend early free education to all two-year-olds.

He said the government was currently funding childcare for some families with incomes of up to £300,000 a year.

"We would weight it differently to get some funding to lower income families", he told BBC Radio 4's Today programme.

But this measure is opposed by some.

Stephen Davies, of the Institute for Economic Affairs, said: "If you have taken the decision to have a child - which these days is a voluntary decision - why should you then expect other people, in the shape of the taxpayer, to help pick up some of the costs of that decision?"

'Costs stabilising'

Education and childcare minister Elizabeth Truss said the survey showed that costs in England had fallen for the first time in 12 years in line with her department's Early Years Parent Survey from earlier this year. The drop in England was about £15 over the past year.

"This means more parents are able to access affordable childcare and support their families", she said.

However, Neil Leitch, chief executive of the Pre-School Learning Alliance, said cost reductions were due "entirely to the efforts of early years providers" and not because of government efforts.

He said: "For the government to attribute this positive trend to their own 'reforms' is completely disingenuous."

Lucy Powell, Labour's shadow minister for childcare and children, said childcare costs under the coalition government "are soaring, adding pressure to family life and shutting parents out of work".

Scotland's minister for children and young people, Aileen Campbell, said while average costs were lower in Scotland than in England and Wales the issue "remains a significant challenge for many parents".

"That's why we're acting now, delivering increased and more flexible early learning and childcare of 600 hours a year for three and four-year-olds and the most vulnerable two-year-olds from August," the minister said.

Liz Bayram, chief executive of the Professional Association for Childcare and Early Years, added: "To help more parents access affordable, high quality childcare, government needs to invest appropriately in childcare and recognise the economic benefit of supporting families to balance work and caring responsibilities."