This report presents original research to understand the gaps in childcare provision for school age children of working parents in London and identify possible solutions. Coram's research finds that many parents struggle to find and afford childcare for school children and that this is affecting their choices about whether and how much to work.
The price of school age childcare has increased in London over the past decade at a rate higher than inflation. Childcare costs represent a significant proportion of average earnings in London, and the average price of childcare varies substantially between local authorities.
- After school club prices in London have risen by 25 per cent in the decade since 2008: above inflation and wage inflation. Holiday club prices have increased by 62 per cent in the same period.
- During the school holidays, families are likely to need more hours of childcare, and this almost doubles childcare costs.
- A week of term time childcare in London is equivalent to 21 per cent of earnings from a week of full-time work at the National Minimum Wage, while a week of holiday childcare represents 48 per cent.
- There is wide variation across London in the price of wraparound care. The average price of after school childcare in Richmond Upon Thames (£4:83) is 65 per cent higher than in Hounslow (£2:93).
Parents can receive help with their childcare costs through Universal Credit or Tax Free Childcare. The support available helps to make childcare more affordable, but leaves parents on low to middle incomes with little incentive to work more than part time, and payments in arrears on Universal Credit can leave parents without the support they need to manage fluctuating childcare costs, which often need to be paid in advance.
- For single parents on low to middle incomes, receiving support with Universal Credit, it pays to work for up to three days a week, after which the marginal returns from working more rapidly diminish.
- Universal Credit supports parents with up to 85 per cent of childcare costs. This means that parents' incomes are up to £20 a week lower than non-parents in term time, and up to £40 a week lower in the holiday.
- Families face higher childcare costs during the school holidays, but support through Universal Credit is paid in arrears. This means families have to pay these higher bills before claiming back any additional support.
- Most childcare providers require payments in advance, most commonly one week before - making it even harder for families on Universal Credit.
Less than half of local authorities in London have enough childcare for all the school age children who need it; less than in the rest of England.
- 75 per cent of primary schools in London offer breakfast clubs and 61 per cent offer after school clubs. While 85 per cent of schools in Sutton offer after school clubs, this drops to 31 per cent in Lewisham.
- Families with children with a special educational need or disability (SEND), families with more than one child, and families with older children find it more difficult to find suitable childcare than others.
- Children who attend schools where a higher proportion of pupils are of White British origin or to speak English as their first language are more likely to have greater access to breakfast and after school clubs that are open for more hours than those in schools where a higher proportion of pupils are in receipt of school meals and whose first language is not English.
Universal Credit makes working while paying for out of school childcare substantially more affordable. However, there are three areas where Universal Credit could be improved to make work pay for more families. The Department of Work and Pensions should make the following fixes to Universal Credit:
- Switch to upfront payments so that families with school age children who face fluctuating childcare costs between the school term and holiday periods can get help with paying for childcare in time to pay their bill. This will help to provide a more stable income for families with school age children.
- Raise the childcare element of Universal Credit from 85 per cent to 100 per cent of eligible costs to improve the financial incentive for parents paying for childcare to work or work more hours. This would save parents in London up to £20 a month in the school term, and up to £40 a week in the holidays.
Coram's research found significant gaps in the availability of childcare. It found a desire about parents to be able to access more childcare provided in or associated with schools, which are often highly trusted and convenient for parents, as well as offering children the familiarity of the setting and their peers.
In the longer term:
- Government should make available dedicated funding for extended schools, working in collaboration with voluntary and private sector providers, with a view to providing a basic guarantee of provision to all school age children in term time and the holidays, offering a variety of different enrichment activities for children.
In the shorter term:
- Government should strengthen the ‘right to request’ policy so that it tackles the persistent gaps in school age childcare provision. This should include better support to schools around assessing and responding to requests and setting up on-site childcare and providing better information for parents on making effective applications.
- Local authorities should open up council-owned premises for private and voluntary providers to operate out of, support good relationships between schools and providers, and subsidise ferrying services between them.
- Government should introduce inclusion funding for school age childcare. It is clear from our research that children with a special educational need or a disability (SEND) are among the least likely to be able to access suitable childcare. Introducing inclusion funding – money available to childcare providers to support children with SEND – for school age children could help to increase the number of childcare providers who can offer care for children with SEND, improve the quality of childcare, enable parents to trust providers, and offer parents respite or the opportunity to work.
- Government should prioritise making sure there is enough year-round childcare for the groups that currently face the biggest shortages: 12 to 14 year olds and disabled children.
- Central and local government should work with families and childcare providers to build understanding of the types of provision that appeals to parents and children and supports children’s development. This should be widely shared with families and childcare providers to support quality improvement.
- Local authorities should provide business planning and training services to school age childcare providers. This could include basic training such as health and safety and first aid, as well as specific training for caring for children with SEND. As well as improving quality, this could help to improve staff retention and provider engagement with local authorities.
- Local authorities should provide high quality and up to date information for parents on school age childcare. Statutory information duties on local authorities should be better-enforced, with supporting funding from central government, to ensure that local authorities have the information they need about school age childcare in their area.
- Local authorities should work more closely with schools and childcare providers to boost the number of parents they can reach with information about the local childcare offer. This could include linking up local authority information on local childcare providers with schools’ communication with parents (e.g. via school websites).