Under 5s childcare fee increase consultation

This consultation has ended

Start date	19 January 2023
End date	09 March 2023

This consultation has now ended and the Islington Council Executive has passed a new policy.

Read the findings from the consultation in the Under 5s Childcare Fee Increase Consultation Executive Report, May 2023.

Read report

Under 5s childcare fee increase

The council helps with the cost of childcare by subsidising fees at council-run nurseries, children’s centres, and some school and community nurseries for Islington-resident working and studying families. Fees are charged on a sliding scale according to income, so that families on the lowest incomes receive the most help with the costs of childcare.

The subsidy supports low- and middle-income families with the costs of childcare helping parents to take up and sustain work, while also ensuring that the council fulfils its duty to secure sufficient childcare for working and studying parents.

Islington Council supports families with the costs of childcare over and above national government support, unlike many other councils, and remains committed to this.

There are 11 charging bands in the nursery charging schedule, as well as a non-subsidised/marketed band, as part of Islington’s Early Years Charging Policy.

Childcare fees have been increased for all income bands by 2% each year.

Increases to childcare fees

We are consulting on proposals to increase childcare fees over the next three years as follows:

Fees for households with incomes less than £90,000 (charging bands 1-8) will have a 0% increase in 2023-23; with a 2% increase in 2024-25 and 2025-26
Fees for households with incomes more than £90,000 (charging bands 9, 10 and 11 and non-subsidised/marketed) will be increased by 8% in 2023-24, 2024-25 and 2025-26

Income band	2023-23	2024-25	2025-26
Bands 1-8 (household income less than £90,000)	No increase in fees	2% increase in fees	2% increase in fees
Bands 9, 10, 11 and non-subsidised/marketed	8% increase in fees	8% increase in fees	8% increase in fees

Read details of the proposed fees.

We know that many families are experiencing significant financial challenges and our priority is to support families on low and middle incomes. We are also committed to providing as flexible an offer as possible to all families which responds to local need and demand. However, as with all local nurseries, costs at council subsidised nurseries are rising and therefore an increase is proposed. The council is committed to keeping costs as low as possible for those families in most need of support.

Information session

Parents and carers are invited to a public information session to find out more about the consultation and to ask questions:

Online, 26 January, 6.30-7.30pm

If you would like a paper copy of this consultation please contact EYAdmin@islington.gov.uk

Have your say

To tell us what you think of our proposals, please fill out the consultation survey.

The survey is now closed.

Other sources of financial support for childcare

The under 5s childcare subsidy is part of a wider package of support for the costs of childcare for working and studying families. The Council is committed to supporting parents to access the financial support available through raising awareness of what’s on offer and how to apply. We do this through the outreach and engagement work of our Family Information Service and we encourage all providers to talk to parents about what is available to them.

Islington Council offers a Childcare Bursary which supports parents with the costs of childcare as they move into work or training.

The council also subsidises after-school and holiday childcare at a range of schools and voluntary sector providers.

Parents can also get support with the costs of childcare through the following government schemes:

Tax-free childcare
Universal Credit for Childcare
Care to Learn (Under 20)
Discretionary Learner Support
Childcare Grant

Consultation key dates

Consultation 19 January to 9 March 2023
Report published 23 May 2023
Proposed fee increase implemented, subject to the outcome of the consultation, autumn term 2023

Frequently Asked Questions

What are the reasons behind the proposed fee increases?

The proposed fee increases are designed to ensure that Islington’s subsidised nurseries remain sustainable while supporting the lowest earning families with the costs of childcare.

Do we compare and benchmark Islington fees with private nursery fees?

Yes. We conduct an annual price comparison exercise to ensure that our prices at the top end remain competitive with private sector nurseries in the borough. In the last two years our top rate fees have been at or below the median. Islington charges are currently 7% below the median average for both under 2s and 2-3s.

The Bank of England isn’t predicting 8% inflation over the next three years, why is Islington proposing to increase by 8% for the next three years?

The increases in fees are to ensure the Council can continue to subsidise childcare while protecting those on the lowest incomes, rather than mirror increases in inflation. In order to ensure that the families on the lowest incomes continue to receive the most support towards childcare costs, we are increasing the charges for higher earning families by a higher rate. We will review after the first year of fee increases, making adjustments for years 2 and 3 if appropriate.

How much council tax funding goes into subsidising nursery fees?

The childcare subsidy is forecast to cost £5.1m in 2023/24. There isn’t a direct link between Council Tax and the childcare subsidy. Core Council funding comes from a variety of sources, of which Council Tax is one.

Will the threshold at which higher rate increases apply be reconsidered?

The council appreciates the considerable difficulties experienced by all families currently, but there needs to be a threshold at some point in the charging structure. In the context of Islington households, it was considered appropriate to set the threshold for greater increases for higher earning families at £90,000 plus (band 9 and above).

Why was the option being consulted on considered to be the fairest option and what were the other options?

A range of other options were considered, including higher increases for families with higher incomes and merging income bands, but these options were considered to be less fair.

Are we aware of any similarly proposed increases across London boroughs or non-London boroughs?

We are not aware of any details of increases in other boroughs. A few years ago, Camden stopped subsidising childcare completely.

Are Islington’s nurseries considered not to be sustainable without these increases, and are increases of 8% for the next three years required to make them sustainable?

The increases are to ensure that the childcare subsidy remains sustainable and affordable for the Council while protecting families on the lowest incomes.

Are there any proposals to help families with more than 1 child of nursery age?

We support that with the 25% discount for the 2nd child, 35% for the 3rd child and 45% for the 4th child. We offer sibling discounts in recognition that where families have multiple children under 5, the cost of childcare can be particularly challenging.

Would staff wages be increased as a result of the increased charges?

Islington already pays its nursery staff more than in other boroughs and more than most staff in the private and voluntary sector. There is no proposal to change the staffing costs structure.

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