Government research reveals childcare costs have risen - even as funding costs remain the same

Neil Leitch, chief executive of the Early Years Alliance, said:

“Yet again the government’s own-commissioned research puts the scale of the crisis in black and white: hourly costs have risen more over the last three years than can be explained by inflation and the minimum wage and pension contribution policy changes. Despite this, funding rates have been frozen by the government throughout that time. Things are looking increasingly unsustainable and, with staffing costs making up over three-quarters of provider outgoings and due to rise significantly next month, the need for government action on childcare funding has never been more compelling.

“These findings – taken as snapshot of a small proportion of providers in the busiest term – are just the latest in a long list of studies which show the level of crisis in the early years. Independent research from sector experts Ceeda – using a sample size ten times larger than today’s study - found almost two thirds of a billion pounds black-hole in childcare funding. This underinvestment is causing untold financial problems to childcare settings, and this will ultimately impact on families who will see prices increase, or childcare settings close for good. The government knows this but continues to find ways to defy mathematics rather than increase funding.



  • The Early Years Alliance (formerly the Pre-school Learning Alliance) is the largest and most representative early years membership organisation in England. A registered educational charity, it also provides high-quality affordable childcare and education to support children and families in areas of deprivation throughout the country.
  • The Alliance represents 14,000 member settings and supports them to deliver care and learning to more than 800,000 families every year. We deliver family learning projects, offer information and advice, produce specialist publications, run acclaimed training programmes and campaign to influence early years policy and practice.
  • The Alliance website is