According to a new survey undertaken by children’s charity Coram, annual nursery fees for children under two in England have fallen for the first time since 2010. Figures show that working parents of children under three in England are now paying 56% less for childcare than they were last year, which is undoubtedly good news – but it has some serious limitations. 

The news comes as the government continues to roll out the funded childcare scheme in England, which first came into effect back in 2017 when working parents were granted 30 hours of free childcare per week for children aged three and over. Last year, this was extended to include children under two, but access to the scheme isn’t always as straightforward as it sounds.

Parents in Wales and Scotland, however, are still being hit with increasingly high childcare costs, and the fees for children over three in England have risen by almost 5%, meaning that if you have an older child in nursery, any saving is negligible. Added to this, nurseries are warning that they may be forced to opt out of the government-funded scheme, as they struggle to meet rising costs.

Technically, ‘all eligible working parents’ of children under three years old can access 15 hours a week of childcare paid for by the government, rising to 30 hours from September. Coram calculates that this amounts to a saving of around 22% on current nursery fees in England, and the government appears to be committed to the change, with education secretary Bridget Phillipson telling the BBC that the survey highlights “the real difference the expanded childcare entitlements are making”.

However, it is notable that costs for three- and four-year-olds continue to rise, and once children start school in the September following their fourth birthday, the provision of childminders and wrap-around care to cover outside school hours is also increasing. And if you live in Scotland or Wales, you’ll still be paying over the odds, with Wales topping out as the most expensive place in the UK for a full-time nursery place, at £15,038.

It’s also important to note that not everyone is eligible to take part in the scheme. Parents who don’t work, don’t earn enough or don’t meet any of the other criteria are paying around £100 a week more than eligible families for childcare, which Coram cites as a real risk that disadvantaged children will be priced out of accessing the same early education as those in working families.

Lydia Hodges, family and childcare head at Coram, told the BBC that while the funded hours in England are “a welcome step” for making childcare affordable for working parents, the system still needs work. In particular, she notes that parents ineligible for the funded childcare “are unlikely to be able to meet the cost involved in giving their children the same amount of early education that other children get for free”.

Additionally, the report notes that there are gaps in the availability of childcare provisions, particularly in respect of children with special educational needs or disabilities (SEND). This means that families are at risk of missing out on places or having to travel miles out of their way to attend settings with spaces. 

Even if parents do fulfil the criteria for eligibility, there’s still a risk that a funded nursery place simply won’t be accessible to them, as nurseries say they’re being forced to cap the number of allocated places in an attempt to cover their overheads. With an increase in national insurance set to come into effect in April, staffing costs are rising – a cost that is passed on to parents via ‘chargeable extras’ such as snacks and meals, meaning even funded places aren’t entirely free. 

Despite these drawbacks, this is (largely) a step in the right direction, and while more change is needed, it’s clear that the cost of childcare in the UK is coming to the forefront of the government’s attention, and that can only be a good thing. 

“As part of this year’s survey, for the first time we spoke to parents on their views and experiences of childcare, and many highlighted the positive impact that it has had on their child’s independence, development and happiness,” Hodges says in a statement. “These are things we want for all children, and we call on the government to commit to immediate and longer-term actions so that no child misses out on this vital boost to their outcomes.”

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