Average childcare fees for under-twos increased by 9.1% between 2023 and 2024 in England, according to the Department for Education (DfE).

The statistics show that average hourly parent-paid fees increased from £6.05 to £6.60 for under-twos. Fees for two-year-olds increased from £6.07 to £6.56 (an 8.1% increase) and for three- and four-year-olds increased from £5.90 to £6.30 (a 6.8% increase).

Neil Leitch, chief executive of the Early Years Alliance, said early years settings had no choice but to increase parent fees due to many years of under-funding for the early entitlement offers. “Worse still, we know that this trend is very likely to continue,” he said. “When asked what would happen if next year’s early years funding rates did not cover the costs of minimum wage rises and national insurance increases, 95% of respondents to an Alliance survey said that they would be forced to increase fees for parents. And with recent confirmation that funding across all age groups will increase by just 3-4%, despite minimum wage increases of up to 18% plus the significant additional pressure of national insurance changes, it’s clear that these fee increases are likely to be significant.”

The data was collected as part of the DfE’s Childcare and early years provider survey between May and July 2024. The survey found an estimated 54,700 early years providers in total, made up of 21,200 group-based providers, 9,700 school-based providers and 23,800 childminders.

The total number of providers fell by 3%  between 2023 and 2024, driven by a 7% fall in the number of childminders. However the total number of registered places increased by 3% ,with a 5% increase in group-based provider registered places.

The total number of paid childcare staff increased by 6% between 2023 and 2024 to 368,100, with the majority (277,900) in group-based provision.

Patterns of provision varied across regions, with school-based providers making up 31% of provision in the North East, compared with 10% in the South East. The proportion of group-based providers is highest in the South West (43%) and lowest in the North East (29%).