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How much does childcare actually cost in England? Have your say!

There has been a great deal of debate in the past few years about how much high quality childcare and early education costs to deliver, inspired in large part by the doubling of the free entitlement for three- and four-year-olds of working parents in September 2017.

PACEY research last year found that the average childminder in England charges £4.64 per hour. However, the average hourly rate paid by local authorities in 2017-18 was just £4.28 – and almost 30 per cent of councils paid below £4. Based on the 1,140 funded hours per year, we found the average childminder experiences a shortfall of £410.40 for every 30 hour place offered.

Previous research commissioned by the DfE has yielded a range of results. The 2015 Review of Childcare Costs found that a childminding place costs between £3.07 and £6.12 per hour. A 2017 study by Frontier Economics found that it costs £4.77 on average per hour to deliver a childminding place for three- and four-year-olds, and £5.35 for two-year-olds.

Six months after the rollout of 30 hours, the DfE is now giving childcare providers another opportunity to explain how much it costs to deliver a place by submitting their financial information. DfE has developed a costs template, which it says is ‘will provide the opportunity for providers to supply evidence of the hourly costs of delivering the free entitlements, and how that compares to their hourly funding rate.’ Providers are being asked to return the completed template to DfE by 30th April 2018 at the latest.

PACEY has been calling for years now for the free entitlement to reflect the actual cost of providing high quality childcare, and for a long-term sustainable funding settlement for the scheme. If you agree and want to see change, we strongly urge you to submit the template to DfE by the end of April.

Our childminding cost calculator may help you to do this. It will help you think about the various expenses that come with running a childminding business – from  essential insurance to paper for your printer. Enter the number of places you offer and we can help you calculate the cost of the childcare you provide.

You can either email your template over to or post to 'Laura Smith, Early Years and Childcare, Department for Education, Sanctuary Buildings, Great Smith Street, London, SW1P 3BT'.

If you have any questions or comments, get in touch with the PACEY policy team.