Capital lacks infrastructure to support government childcare expansion, says London Assembly

The report, published by the London Assembly Economy Committee, warns that there is a shortage of childcare in London, with existing provision in the capital costing 25 to 30 per cent more than across Great Britain as a whole.

The government is planning to expand free entitlements for children under the age of three, set to be introduced gradually from April until September 2025, yet the committee warns that for the expansion to be successful in London, there needs to be additional funding to increase staffing, capacity and infrastructure.

The report highlights the high cost of living in London as posing issues for the government’s expanded childcare offer to be rolled out effectively, stating: “There are clear concerns about the impact this will have on the childcare sector, and its capacity and infrastructure to cope with the rise in demand.”

This is due in part to “providers generally spending more on wages and rent or mortgages in London than in other parts of the country” and “severe staffing shortages” with “workers in the sector feeling undervalued, while wages and the lack of career progression also act as a barrier to recruitment and retention”.

This coincides with the reduction in childminders operating in England, which the study also highlights. A report published by the Early Education and Childcare Coalition and the University of Leeds last year also revealed that 57 per cent of nursery staff and 38 per cent of childminders are considering quitting the sector.

Marina Ahmad, chair of the Economy Committee, said: “Our investigation found that London has the highest childcare costs in the country. These soaring costs are causing serious concern among parents, who are worried about their ability to save and provide, as well as impacting major life decisions such as whether to have more children.

“We heard that the sector is struggling, with severe staffing shortages and workers feeling undervalued. While we welcome the government’s plans to expand the free entitlements for children under the age of three, we are concerned that the childcare sector in London will struggle to cope with the expected rise in demand for places.”

The report includes a set of recommendations for Sadiq Khan, and the deputy mayor for children and families Joanne McCartney. These include calling for the Mayor to lobby government to review funding rates, run an awareness campaign to recruit and retain more early years workers and encourage employers to offer onsite childcare to staff.

A spokesperson for Khan said: “London parents face some of the highest childcare costs in the world, while the early years sector is struggling from chronic underfunding and a nationwide staffing crisis.

“The huge challenges that parents face to find spaces are only set to get worse if ministers fail to address the significant issues facing the sector. The mayor is committed to doing all he can to build a fairer and better London for all, and will consider the committee’s report and respond in due course.”

The committee collected information for the report at two evidence gathering sessions.

On the report’s findings, Neil Leitch, chair of the Early Years Alliance said: “Of course, while it’s clear that the capital is on the brink of a childcare and early years crisis, we must not forget that providers across the remainder of the country are also grappling with the very same issues, resulting in more than 3,000 settings closing in the last year alone.

“As such, while we agree that the funding rate in London must be increased to match the reality of delivering high-quality early years places, the same action must also be taken for the remainder of the country if there is any chance of settings being able to sustainably deliver both existing and upcoming early entitlement hours.”

Purnima Tanuku, chief executive of National Day Nurseries Association said: “This report echoes our own concerns that we have been taking to the government regarding the funded childcare expansion. We gave our own evidence to the inquiry last year and are grateful to the Economy Committee for focusing on these issues which are crucial to any thriving society and economy.

“We would whole-heartedly support their first recommendation to review the funding rate to ensure they enable providers to deliver high quality provision which all children should be entitled to receive.”

This report comes as the New Economic Foundation revealed that there are more than three children competing for early years places in some areas of the UK.