Falling family incomes and rising costs put out of school childcare at risk

- first national survey of out of school childcare since local budget cuts -

As the new school year begins, research published by national charity 4Children has identified serious potential threats to the future viability of out of school childcare. In the first national survey of out of school childcare providers conducted since the local spending cuts, falling parental income and rising operational costs were cited as the biggest concerns for the future sustainability of out of school childcare services in the year ahead.

Family incomes

The survey revealed that the vast majority of providers of out of school childcare are not reliant on funding from their local authority or school. However as the activities are typically financed directly by parents paying to use the services, recent falls in family incomes have sparked new fears for the future of these vital services.

The 4Children survey found that 66% of providers said falls in parental income and ability to pay was their biggest concern for the year ahead

Recent figures from the Office of National Statistics show that UK households have experienced the biggest fall in disposable income for more than 30 years. And in a further blow to family finances, earlier this year Government reduced the amount that parents can claim towards the cost of childcare through the tax credit system from 80%-70% of the total cost - leaving a significant shortfall for thousands of low income families.

4Children is now calling on central and local government to encourage more parents to access the financial support available to them via the childcare element of the tax credit system, which currently has a disappointingly low take up rate by families with older children. Beyond that, the charity is urging government to ensure that sufficient support is provided to meet childcare costs when the Universal Credit is introduced in the future.

Survey responses from out of school childcare providers

“Parents are changing work patterns and younger children are walking home alone to avoid paying after school club fees.”

“Parents are changing their working patterns to make it worth their while working and avoid childcare costs.”

Rising costs

Another major threat to out of school childcare, highlighted by the survey, was providers’ difficulty in meeting soaring operational costs. Anecdotal evidence shows that changes in local charging policy and the move of schools to Academy status have in some cases resulted in unprecedented increases in running costs for childcare providers, such as being charged rent to use school buildings out of school hours, for the first time. The charity is therefore cautioning local authorities and schools against passing on inflated costs to struggling childcare schemes whose services are already seriously at risk.

The 4Children survey found that 50% of providers said rising costs was their biggest concern for the year ahead

Survey responses from out of school childcare providers

“It is very difficult to keep childcare affordable for working parents in the current climate. Staff costs are rising again in October and food costs are high. To sustain the level of care we are offering at the moment may become difficult next year.”

“There are many worries this year. Last year, one school decided they would increase our rent from nil to £34,000.00 per year. This wasn't even our income, let alone minus wages and so on. Three of the other schools we work in have increased their rent by 66%. We just don't know how we will be affected.”

Findings from the national survey of out of school childcare providers

When asked about their biggest concerns for the year ahead: 

• 66% said falls in parental income and ability to pay
• 50% said rising costs
• 26% said reduced priority for out of school activities
• 19% said reductions in funding
• 10% said changes to the way education is organized locally with more academies and free schools

Anne Longfield OBE, Chief Executive of 4Children said:  “The good news is that out of school childcare has not suffered from local budget cuts as much as some may have feared – in large part due to the fact that so few were in receipt of public funds in the first place. However, this research should sound alarm bells over the risk that falling parental incomes combined with soaring operational costs are presenting to providers.

“Out of school childcare provides crucial support to hundreds of thousands of parents and important opportunities for older children. We urge local authorities and schools to think twice before hiking up running costs, such as rent, and carefully consider the wider impact on parents who rely on out of school childcare to allow them to work.”