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Soaring demand for childcare puts families with young children at risk, warns new report

More families with young children will be driven out of London if the city is unable to cope with an expected rise in demand for childcare, a London Assembly report warned today.

An investigation by the London Assembly Economy Committee into early years childcare in London found that the capital has the highest childcare costs in the country, with prices up to 33 per cent more in London than the rest of the country.

The government is extending free childcare places to some children as young as nine months, with the first stage of the major reforms beginning in April.


Experts told the London Assembly the childcare sector in London does not have the capacity or infrastructure to cope with the rise in demand that these reforms will create.

Neil Leitch, CEO of the Early Years Alliance, said: “On the surface, it should of course be a great offer. Yet the reality is what it creates is chaos because we do not have the infrastructure to deliver it.”

The London Assembly economy committee called on the government to review the funding rates for the free places because it currently does not cover the cost of delivery.

It said: “For the expansion [of free hours] to be a success in London, it must be properly funded and implemented with input from the childcare sector, to ensure providers have the capacity and infrastructure to address the increase in demand.

Currently children aged three and four are eligible for free hours. This will increase until September 2025 when all under 5s will get 30 hours free childcare.

Nurseries are already being forced to increase other costs to make up for the shortfall in funding from the free hours, the committee heard. This includes increasing prices for parents of children who are not eligible for free hours, and for additional items such as nappies and food.

Joeli Brearley of campaign group Pregnant Then Screwed said the underfunding has put some nurseries out of business, resulting in “childcare deserts in areas of deprivation”.

The report said: “The high costs of childcare in London, along with other pressures such as housing costs, are making the capital increasingly unaffordable to live in. If we do not take action to address this soon, even more families and even more children will be driven out of London.”

The committee’s Labour chairperson, Marina Ahmad, said: “We know that there are hard-working staff in nurseries across the capital who are doing all they can to care for and educate our young children. But we heard that the sector is struggling, with severe staffing shortages and workers feeling undervalued.

“While we welcome the Government’s plans to expand the free entitlements for children under the age of three, we are concerned that the childcare sector in London will struggle to cope with the expected rise in demand for places.”

Ms Ahmad, who represents Lambeth and Southwark on the Assembly, added: “If we do not take action to address this soon, even more families and even more children will be driven out of London.”

A spokesman for Mayor Sadiq Khan said: “London parents face some of the highest childcare costs in the world, while the early years sector is struggling from chronic underfunding and a nationwide staffing crisis.

“The huge challenges that parents face to find spaces are only set to get worse if ministers fail to address the significant issues facing the sector.

“The mayor is committed to doing all he can to build a fairer and better London for all, and will consider the committee’s report and respond in due course.”

A Department for Education spokeswoman said: “We are confident in the strength of our childcare market to deliver the largest ever expansion in childcare in England’s history and have increased the hourly funding rates with a £204 million cash boost this year and over £400 million next year.

“The rates reflect extensive data gathering on the costs early years providers face and how they vary across the country.”

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