"Childcare In The UK 'Most Expensive In World'" Sky news report

[LittlePickleHead]

news.sky.com/home/uk-news/article/16064005

The cost of childcare is forcing women to turn down jobs or give up work because they can't afford the cost of childcare.

This is true personally, DH and I are holding off on trying for DC2 until DD is in school as putting two into childcare would cost more than I can earn. Much tougher is on those who already have children who have no lost tax credits or subsidised childcare and are now being forced into poverty.

My cycnical side thinks that taking mothers out of the workplace has many benefits for the government...

The nursery i used to work at charged £38 per day Lunch not included, and most of the staff were apprentices and paid £90pw. Once they qualified they were out of a job.

The owner lives in New Zealand.

I earn £2600 a month working full time and spend £1800 on childcare and £400 on petrol for commuting, plus about £40 a month for parking at work. Professional subscriptions are about another £40 a month. It's got so bad I can't eat in the staff canteen now, as that's about £7 a day, and if you don't buy a meal you can't sit down so I sit in my office over lunchtimes and have a sandwich on my own. I am working a 55-70 hour week for way less than the minimum wage if you take all these costs into account. But I have no choice at the moment.

grim reading... i have 3 dc's - older two are school age and i am lucky in that their school provides extended provision until 5.30pm for a minimal amount (as opposed to £30 each for a private day nursery) however at one point we were paying 1000 per month for 1 ft and 1 pt (after nursery) so i packed it in took a career break. Big mistake.. I now earn less pro-rata in my PT trainig job than i did three years ago and am quite anxious about my working future (hubby's earning do not cover the mortgage/bills etc, house in neg equity etc) Last on hol in 2008, drive ancient car, no sky, dont smoke etc....
however i keep working as it is an investment in the family's future and as someone once said to me, childacre is not an expense it's an investment (!!?? ) Still, it was our choice to have 3 kids so we'll suck it up for now!!! Seems also the most flexible careers are those that pay less overall!

Also in Finland child care is subsidised.

Fee depends of how much parents are earning. Maximum fee is 250 euros / month (in 2011).

The staff in day care centres is required to have at least a secondary-level degree in the field of social welfare and health care.
One in three of the staff must have a post-secondary level degree (Bachelor of Education, Master of Education or Bachelor of Social Sciences).

It is well documented that the UK currently suffers from a lack of affordable, high-quality childcare, hence potentially preventing some mothers from working.
Finland was in a similar situation in the 1960s and early 1970s and solved it by creating a large publicly financed childcare sector.
By the mid-1990s, this policy had led to a system of universal, low-cost provision of childcare with a legally guaranteed place for all preschool age children.

The downside of this generous system was that public expenditure on childcare alone accounted for approximately 1% of GDP (compared to 0.01% in the UK) in the mid-1990s.

In Finland, only 15% of the total childcare costs per child was paid by the
parents thus causing large deadweight losses since parental contributions were capped at a low level.

www.nottingham.ac.uk/economics/res/media/viitanen.pdf

www.europarl.europa.eu/document/activities/cont/201107/20110718ATT24319/20110718ATT24319EN.pdf

I think if parents choose to have 3 or more kids, it's quite normal that this will be extremely expensive to fund, so I wouldn't have much sympathy for one parent of large family staying at home.

However, it's not too much to expect to afford to look after 2 children with a graduate job. I will only just break even if we have 2 children and I am 35 with a graduate job - admittedly it is not amazingly paid.

I resent the implication (maybe not on this thread, but general feeling) that grandparents should step in and do the childcare so that the parents can go back to work. Why should they? They have raised their own children, usually making much more sacrifices than we do, and deserve to enjoy their retirement. I am surprised at the number of people who seem shocked my parents (70yo and 50 miles away) have not offered their services.

Childcare costs are a complete nightmare, and that's if you can actually find someone to look after them. I have one DS and returned to work 3 days a week. We pay over £1000 a month for 3 days a week nursery. OK so it is about the most expensive one on the planet, but when DC2 comes along we will have to reconsider - move to a cheaper nursery or look at getting a nanny which would be cheaper.

I think the fundamental problem is that staffing ratios need to be 1 to 3 (for under 2s) or 1 to 4. So you would need to spent about 25% of your income just on staff costs. Add on the extra income tax the nanny/nursery worker has to pay, add on the costs of a nursery building, add administration fees (nursery manager, tax services or agency fees for nanny) and you're getting into 35% plus territory for an over 2 and about 45% plus for an under 2. Its crazy.

My parenting cost manifesto is....

1. make paying a nanny, childminder or nursery tax deductible. That way you don't pay 2 lots of income tax and it makes it a lot cheaper. Also it benefits those who work and earn but is no worse for those who don't.

2. get rid of the stupid school holidays and early closing. Provide good wrap around care (say 8 - 6) and say 8 weeks holiday a year maximum. We no longer need our children to help bring in the harvest thanks very much, so they don't need to be home for the whole summer. Teaching hours don't need to increase, perhaps schools could have a school day like the existing one plus wrap around childcare, or perhaps they teach fewer hours per day but for more weeks of the year. Rather than giving each teacher more work to do, hire more teachers or cover non-teaching hours and weeks with childminder type roles. Yes this would cost more in taxes, but the buildings are already there so the only additional cost would be staff.

Who votes for me?

I have found this thread really interesting as I am about to start a new job after 3 years as a SAHM. The costs of Childcare had been a major factor in getting my new job and the salary that I need to pay for it.

When I last went back to work after having DD1, she was with a CM (she was about 18m) it cost me around £900pm. My work was 1.5 hrs. from home so I could only work PT but she was with the CM FT. After transport I made a loss of about £50 a month so It was better to stay at home.

Now DD1 is in Y1 and DD2 is 2 so costs for childcare have risen. A CM would be about £1500+ a month but DD1 goes to ballet after school and DD2 goes to playgroups with her friends. I worked out that I would need a salary of at least £35k to pay for a CM during term-time around £40K during holidays.

I have a nanny starting next week who hopefully will do everything I need but she is still over £20K. I dont mind paying for childcare but wish it was easier for mothers to get back to work as I would actually like to make some money going back to work not just give it all to the nanny. Luckily I will be in a position to put some money to one side. I wish that to live and work in London you didnt need to have a bankers salary (not that I'm a banker!)

MichaelaS I vote for you

When I worked in the Czech Republic they had amazing childcare facilities.
Maternity leave was 2 years! paid and guarantee of same job!!
Nurseries opened at 5am and closed at 11pm. I worked for Skoda and their shifts were 6-2, 2-10, 10-6. Schools were also 7-1, 1-7. It seemed to work maybe if the government went for a shift type system for childcare then things could improve.
Many nurseries don't open till 8 but if you have to travel to the other side of London it could take you longer than 1 hour, same with them closing at 6.
How many people actually finish at 5 on the dot?!!

School isn't childcare though and the long holidays are enjoyed by many!

We have had to move house and location because of the crippling effects of childcare costs. We are paying £1200 per month for an Ofsted "Good" nursery which in my opinion only scrapes the "Good" status. In our new location an Ofsted "oustanding" nursery which will cost us just £750 and includes a whole variety of extras, language lessons, music and dance sessions. I just don't understand how £1200 is justifiable - it is the equivalent of another mortgage payment each month. And all the nurseries in this area charge around the same rates.

I am having the same issue here. I am relatively well paid on £2000 a month and work and live in London. My commute costs about 300 a month. I had budgeted to have a child and knew it would be a squeeze but budgeted £1000 a month for childcare. We could just about afford this amount and pay the mortgage so it was worth me going to work. But I got pregnant with twins. So now it's £1800 a month which after my commute means I'd be better off not going to work! But we can't afford to pay our mortgage and bills on just my husbands salary so now we're in a nightmare position.

I resent this 'don't have kids if you can't afford them' rubbish. As you can see from my situation, it isn't that simple!

Our joint family income can cover childcare, and it's still worth me going to work (in fact, it would be DH who economically would be the parent staying at home if it ever came to that) - but with 2 kids, the decision was obvious to go for a nanny rather than put the 2 of them into nursery.

As it happens, the nanny came from the nursery that DS1 was in.
We pay her more than she earned at the nursery.
The nursery is registered in Jersey, so the UK won't even being seeing their corporation tax.
The nursery owner makes a fortune.
The childcare vouchers are a drop in the ocean - expecially now you only get the basic rate relief.

I don't resent paying properly for childcare - what I do resent is paying tax twice on that income, as we fund the gross salary out of our net pay. How is that fair? We are essentially a small business - and in our way, helping to keep one person (our nanny) contributing to the economy

However, I try not to think about it and just treat it as a short term situation that we have to suck up. Or I would burst a blood vessel.

Hi HomeEcoGnomist,
I naively didn't realise that when opting for a nanny I'd be paying not just their tax and NI but I'd have to pay for employers tax/NI

As i am not going to earn £100+ and still want my kids to be cared for and I hope my new nanny is going to be OK I know that my £20K is less than some but I live in east London and have found a British nanny who is happy as its £2K more than her last job.

I don't believe that paying more gets you a better nanny. I've interviewed nannies this week with my DD2 next to me and most of them paid no attention to her. (isn't that going to be their job?)

Making nannies tax-deductible would benefit the wealthiest families at the expense of the poorest. People on average or low wages still wouldn't be able to afford a nanny. (Average wage in this country for a full-time worker was about £25k last time I looked it up.)

I sympathise, the cost of childcare is hellish, am grappling with all this myself but I still can't support making nannies any more tax deductible than they are already with childcare vouchers.

What the government should do, but probably won't, is make childcare a hell of a lot cheaper. By subsidising it, and setting up nurseries that aren't run by money-grabbing corporations that charge parents extortionate amounts while paying the workers minimum wage and avoiding corporation tax by registering in Jersey. The last government tried that in a small way with Sure Start nurseries - last I heard, this government was shutting them down. Anyone know what's happened there? Government should subsidise after school clubs and childminders to the same extent. Childcare vouchers do help but not to the extent that is required by our hellishly expensive system and the way it is horribly out of kilter to average earnings.

I wasn't necessarily saying that it should only be nanny costs that should be tax deductible - it just illustrates even more starkly how expensive it is when you get your net pay, then pay your nanny, PLUS her tax and NI PLUS your employers contributions (as lookingforwork discovered...)

Having a nanny is seen as a luxury - but actually, I suspect that it's like a 'childminder plus' arrangement for many families....a slightly more cost effective way of caring for 2+ kids. We certainly don't have the life described in 'What the Nanny Saw', we are a normal family with 2 parents out at work, commuting an hour each way to get there, and need some support to enable that.

I would qualify for only £97 CC vouchers that actually attract tax relief - not even worth filling out the form! I don't think getting tax relief (ok, maybe not on all of it, but a significant proportion) on my childcare costs would be at the expense of poorer families; the govt want my tax ££, surely it would be better to do something that actually supports people to be in, and stay in, the work place.

It's not just low earners who are getting into debt. I am a Director taking home £2000 net, gross £4000 per month. With £1000 a month childcare for my daughter at a nursery, aged 3, £200 for my after school 12/13yrs children per month, along with a mortgage of £1000 pm I am in debt by £200 per month before food, petrol, utilities and pleasures. It is ridiculous for me to not work as after a long (22 year career) to get to my position I would not want to leave now. So instead I have to accept the monthly deficit until my youngest goes to school. My Fridays and weekends are dedicated to my children so my balance of lifestyle makes me a very busy but happy mother - just in a constant growing debt cycle! But there will be a light at the end of the tunnel soon...if the nursery fees could be reduced it would give so many more mothers the opportunity to make choices about their work / family balance.

This is true. While there is some subsidy - eg EYFE and childcare vouchers - the reality is that it really is only a saving for a few short hours - suiting only parents who work from home or do part time work ( a few days a week ). For mothers or both parents who have to be in fulltime work, the hours of 8 to 5, or 8 to 6 suddenly leads to a huge childcare bill, meaning only parents of a certain income level can afford it. I agree with Annamario O. The governments (both Labour and Tory) that put the system into place and keeping it in place haven't really thought about what that actually means to the economy or to families and basically the subsidies are essentially not helpful to most - one suspects because those in charge (MPs and Cabinet) fall into the category of families of a high income level who can afford it without much of a dent to the household income.

Childcare is ridiculous when it does not take into account finances at the household level. Tax credits/childcare vouchers etc look at joint income but at the household level the family look at the one person's (normally mothers) income and say is it worth them working (this is regardless of the other partners contribution).

So with 2 or 3 children it is frequently not worth one person working. But.... if the person who quits their job/career then spends >2 years out of work they are statistically far less likely to get a job (or one that pays as much as they are qualified for). So you lose far more than just that 2 years lack of wage.

There needs to be more state nurseries being funded. What is paid needs to be tax deductable. Keep housing prices down would help (this controls private rents being paid out of housing benefits-or build more state housing...in the longterm lower mortgages would help all future property buyers). It is collective expenses in this country that are the problem (mortgage/rent and childcare etc).Support for childcare does need to be for all as the people I frequently know are well qualified parents who quit and cannot return. Why just subsidise just the lesser paid temporarily and lose the potential future higher earners?

All the qualifications for childcare are they needed (7 years to train a manager!!!! I think was mentioned on one post). The ratios are very tight for under 2s as well.

One of the issues is a lack of flexibility. Like many women after having children I am now self-employed, work from home and my work flows can alter week on week as I play that juggling game of balancing work and children. Without any family support close by I need to pay for childcare but most are pretty rigid in their set up in that you have to book your children in on certain days and that's it. Scaling up is ususally not too much of a problem - it's the scaling back that causes issue. I saw this report on BBC last year and thought what a great idea - typically London-based but if it could roll out across the UK I think it could go great guns. Third Door has an Ofsted nursery downstairs and a separate workspace upstairs and this is the best bit - they are FLEXIBLE! You can use them as much or as little as you need - winner in my book

The good thing for governments in keeping childcare costs high is that it makes it look like the umemployment figures are down.
Unemployment figures tend to be calculated from the amount of people claiming jobseekers allowance.
If a woman decides to be at SAHM because of childcare costs she generally cannot claim jobseekers, and is therefore not considered unemployed.
Additionally as she is not looking for work it means there is less competition, which also decreases the unemployment numbers.
Perhaps there should be tax breaks for companies that set up small nursaries or childminding services on site that are cheaper for employees to use.

Apart from the voucher scheme, there is also the salary sacrifice scheme which is offered by many employers - all to do with "work place nurseries" although confusingly the nursery doesn't have to be attached to your work place. My firm offers this and it means I don't pay tax and NI on any of my nursery fees (i.e. its not just limited to the £250 or so you're allowed via the childcare voucher scheme). Thats a saving of about £300 a month on my current nursery bill. It differs from vouchers in that it has to be a nursery (rather than a nanny or childminder) and there are disadvantages - i.e. your reduced salary (after the salary sacrifice) is deemed as your salary for things like future maternity pay / redundancy pay / may affect pension etc but worth it in my case.

I wonder how much more it would cost the government to set up universal not-for-profit nursery care, in return for dropping tax credits for childcare? Fees could be paid on a sliding scale, dependent on parental income.

I bet it wouldn't cost much more than the present mess!

It's just like housing benefit- the reason the HB bill is so high is that the government is subsidising private landlords, having got rid of most of its low-cost social housing.

The way things are at the moment just seems like inefficiency driven by ideology to me.

It's a big mistake to think of prohibitive childcare being a problem that only affects wealthier families.

Minimum wage earners can't join salary sacrifice schemes for example, as legally it would take their wages below minimum wage - even though, more than anyone - they could really do with the savings they'd get on childcare costs.