Childcare shortage worsens as costs rise – report

Granby nursery in Nottinghamshire has a waiting list until 2025

The availability of places at nurseries and childminders has worsened for pre-school children across all age groups in Great Britain, a report says.

Fewer than one out of every three (29%) councils have enough spaces for children under two, down from 42% last year, Coram Family and Childcare found.

Parents say they are having to travel longer distances and even borrow money to meet childcare costs.

It comes as the government in England expands its funded-hours offer.

• Who gets 15 hours of free childcare and when do I apply?

Kirsten Buckley and her husband started searching for childcare straight after their 12-week scan.

But most of the 30 nurseries and childminders they called had waiting lists until the end of 2025.

It took more than a year to find a place for their twins, Taran and Evie.

And last month, Ms Buckley received a call to say the childminder they were booked in with had to pull out because of personal circumstances - leaving the family "scrabbling" once more.

Kirsten Buckley thought she was being organised when she started looking for childcare straight after her 12-week scan

The couple, who live in Severn Beach, South Gloucestershire, expanded their search to Wales, where they have now found a nursery space two days a week.

"We will be spending a lot more money on petrol driving across the Severn Bridge," says Ms Buckley, an NHS hospital librarian who works near Bristol.

The day rate at the nursery, for both twins, will be more than her daily wage - but after years of training to specialise in her field, she is keen to keep working.

The family have put all their plans to move house and upsize "on hold".

'Incredibly stressful'

And Ms Buckley's parents have just recently moved nearby so they can care for the twins when they are not at nursery.

"It's been incredibly stressful," she says.

"The search for space has been longer and harder than I ever expected."

The South West was among the worst-affected areas, with only one out of every five (21%) councils having enough spaces for children under two, Coram's report found.

But availability has dropped for pre-school children across England, Wales and Scotland.

Coram managing director Ellen Broome says families are facing "a double whammy of above inflation price rises and dramatic drops in availability".

Costs have risen 6% this year - above the rate of inflation, which stood at 4% in January 2024 - with the average annual cost of a full-time nursery place for a child under the age of two now £15,709.

To help parents with increasing costs, funded hours, sometimes known as "free hours", are available for three- and four-year-olds across Great Britain.

In England, this scheme is due to expand to include all pre-school children of working parents, with the first phase opening in two weeks' time.

The Department for Education (DfE) says 150,000 children are set to benefit when 15 hours' free childcare a week will be offered to two-year-olds of eligible working parents from April.

Spending more

The changes are expected to increase demand for spaces.

But the early-years sector has been struggling with underfunding and a severe shortage of qualified staff.

And some parents have told BBC News they will not be seeing a reduction in their bill.

In Northamptonshire, Therese and Toby Mower are spending more on nursery fees than their mortgage.

This year's bill will be £13,000.

The couple, who have two daughters, Nora, six, and Quinn, two, were delighted when they first heard the government's announcement.

But Quinn's nursery has opted out of offering any government-funded hours from April.

Nurseries are mostly privately owned, so while most are choosing to deliver what the government has offered, they have no obligation to.

Five nurseries in the Mower family's area have closed

"It's devastating," Mrs Beaini-Mower says.

"Now we can't actually access the little help that there is."

The family considered moving Quinn to another provider.

But five nurseries in their area have closed and the only other nursery in the village is also questioning whether it can afford to run.

The family do not blame the family-run nursery but say the scheme "is not fit for purpose".

'Significant margin'

Sipra Deb, who owns Granby Nurseries in South Yorkshire, says: "Most of the eight nurseries are full and those that do have spaces can't fill them due to a lack of qualified staff."

The fees here have had to rise "by a significant margin" this year but still cannot meet increases in business rates, energy and the minimum wage.

The promise of "free" hours has not been explained carefully to parents and many "are bewildered by the whole nature of it and how to access it".

Nursery owner Sipra Deb says staffing issues need addressing for the expansion of funded hours to work

Pregnant Then Screwed founder and chief executive Joeli Brearley says the rise in fees means any cost savings for parents eligible for the extra funded hours are lower than expected - and some are having to borrow money or withdraw their savings.

The rate the government pays nurseries for younger children has increased this year - and the DfE has promised it will rise further over the next two.

But Christine Farquharson, from the Institute for Fiscal Studies, says the challenge comes with three- and four-year-olds, who are already receiving funded hours but for whom rates have been "squeezed by around 12% over the last decade".

Also, the extended funded-hours offer will be rolled out in September to include children from nine months - and that is when "more capacity" will be needed.

'Concerted effort'

The DfE in England is confident the childcare market remains strong enough to deliver further expansion but "a significant minority of settings hold waiting lists over six months" and parents should secure places for September now if they have a preferred provider.

The Local Government Association, which represents councils in England, says underfunding and wider pressures have left them "less prepared" to support nurseries and childminders with the expansion of funded hours, "despite concerted effort".

The Welsh government says it provides 100% business-rates relief for registered childcare premises and childcare for all two-year-olds is being rolled out across Wales.

And the Scottish Government says it offers 30 hours a week in term time to all three- and four-year-olds regardless of their parents' working status.