Easing regulations around childcare is key to driving down costs

Regulation of childcare is driving up living costs

Commenting on today’s discussions on ratios in nurseries, Mark Littlewood, Director General of the Institute of Economic Affairs, said:

“Nick Clegg needs to wake up to the fact that regulation is driving up living costs. Childcare rates have massively increased because of government interventions, with part-time nursery places skyrocketing to over £5,000 per year. It’s time the government trusted parents and childcare professionals to make decisions instead of thinking bureaucrats know best.

“Increasing the number of children staff can look after is an eminently sensible idea. Far from lacking evidence, nursery changes of this type have become commonplace as a result of their success in countries such as Holland and France. More generous ratios drive down prices, easing the burden for hard-pressed families struggling with a ballooning cost of living.

“Ultimately, the government should be doing all it can to generate more choice for families. The lack of affordable childcare is not going to be solved by increasing subsidies, but by driving down costs. Easing regulation would go some way to addressing this.”

Notes to editors:

To arrange an interview with an IEA spokesperson, please contact Stephanie Lis, Communications Officer: 0207 799 8900 or 07766 221 268.

In December 2012 the IEA published Redefining the Poverty Debate – Why a War on Markets is No Substitute for a War on Poverty.  Chapter Four addresses childcare costs.

In July 2011 the IEA published Sharper Axes, Lower Taxes – Big Steps to a Smaller State. Chapter Five looked at how increasing regulation of the childcare sector has driven up costs.

The £5,000 figure is from the Daycare Trust’s Childcare Costs Survey 2012.

The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.


The IEA is a registered educational charity and independent of all political parties.

Invest in the IEA. We are the catalyst for changing consensus and influencing public debate.

Donate now