Children: Day Care

Education written question – answered on 15th January 2014.

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Photo of Mary Macleod Mary Macleod Conservative, Brentford and Isleworth

To ask the Secretary of State for Education pursuant to the oral answer of 6 January 2014, Official Report, column 14, on childcare costs, if he will give further details of how the figure of £18 billion was estimated.

Photo of Elizabeth Truss Elizabeth Truss The Parliamentary Under-Secretary of State for Education

The Department for Education has estimated the cost of a full-time child care offer of 50 hours per week for 50 weeks of the year for all children aged one to four in England would be over £21 billion per annum. The assumptions behind this are shown in the following table:

Age Size of cohort1 Hours per year2 Take-up of hours assumption3(percentage) Hourly rate4(£) Estimated cost5(£ billion)
One 665,000 2,500 65 6.00 6.5
Two 665,000 2,500 80 5.03 6.8
Three 665,000 2,500 90 4.00 6.0
Four 225,000 2,500 90 4.00 2.0
Total 21.3
1 Estimate of size of eligible cohort, not referring to a specific year. The size of the four-year-old cohort is reduced to reflect that a substantial proportion of these children will, be in school reception classes. 2 For the purpose of the estimate, a full-time offer is assumed to be 50 hours per week for 50 weeks of the year. 3 Assumption of potential take-up of the offer. This incorporates an assumption of both numbers of parents who will take up the offer, and of how many hours they will use. 4 Estimate of potential hourly rate, taking account of higher cost of provision for younger ages. Please note that these are intended as high level estimates and should not be taken as indicative of future funding levels. 5 Shown to one decimal place.

Government spending on the existing early education entitlement will rise to circa £3 billion in 2014-15, implying an additional cost of £18 billion per annum.

In addition to the ongoing costs, there would be both capital and revenue costs associated with building the capacity to deliver an offer of this scale. These costs have not been included in the estimate.

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