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Thursday, June 13, 2024

Unaffordable childcare driving Londoners into debt

More than half of parents and carers in London are struggling to afford their childcare, with the cost pushing many into debt, according to a new survey.

The poll asked more than 1000 parents and carers that use childcare services – in the capital by BusinessLDN and the Central District Alliance business improvement district – to rate their cost, accessibility and quality.

It revealed that on average, Londoners are spending more than a third (36%) of their monthly personal income on childcare, with 53% rating it as unaffordable, and nearly half (49%) saying the cost had pushed them into debt. Despite this, over two-thirds (68%) rated the quality of their childcare as good or excellent.  

With businesses experiencing chronic skills shortages and families facing a cost-of-living crisis, BusinessLDN is calling on the Government to take further steps to boost the affordability and availability of childcare to support labour market inclusion. 

Reformed childcare needed

Muniya Barua, deputy chief executive at BusinessLDN, said: “The current system of childcare is not working for families, businesses and the economy.  

“While the government has announced some helpful measures to expand free hours and provide extra funding for providers, these do not go far enough. A bold and comprehensive plan to reform childcare is needed to get more parents and carers into jobs and to help address the juggling act that they face. 

“At the same time, employers can also help by offering greater flexibility on working hours, boosting their maternity and paternity packages, and providing childcare vouchers.” 

Debbie Akehurst, CEO of Central District Alliance, added: “Following our Un_Biased Report earlier this year, where childcare was also identified as the most prominent barrier to success in women’s work lives, we are concerned about these latest findings.   

“The career progression of many is often restricted by a lack of affordable childcare, which inhibits their ability to work. With businesses facing high staffing vacancy and turnover rates, the need for a urgent reform of childcare provision is now more vital than ever.  

“By creating more affordable childcare solutions, more parents and carers will be able to rejoin the workforce or increase their working hours; not only relieving their own financial pressures but enabling businesses to flourish and boosting the economic growth of our business centres.” 

Support from employers

The survey also found that parents and carers value support from their employers to help with childcare, with the following most highly prized: paid maternity/paternity (67% rated positively or very positively), flexible working hours (67%) childcare vouchers (65%), working families network (65%), onsite childcare (62%) and returnership programmes (60%). 

In addition, many parents and carers are flexing their hours to accommodate their childcare needs, working either shorter hours (64%) or earlier or later in the day to make up time (65%).  

Later this autumn, BusinessLDN, KPMG and CDA will publish detailed recommendations to improve the current childcare system and boost labour market inclusion.   

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