Childcare costs will be cut by £40 per week under new plans from the Department for Education and Department for Work and Pensions.
A new consultation will look at increasing the number of children that can be looked after by each staff member in early years settings, with proposals to change staff-to-child ratios from 1:4 to 1:5 for two-year-olds.
Ministers say this will give providers more flexibility in how they run their businesses while maintaining safety and quality of care. The Government said this could "potentially eventually" reduce the cost of this form of childcare by up to 15%, if providers adopt the changes and pass all the savings on to parents.
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The Department for Education and Department for Work and Pensions said: "This could potentially eventually reduce the cost of this form of childcare by up to 15%, or up to £40 per week for a family paying £265 per week for care for their two-year-old, if providers adopt the changes and pass all the savings on to parents.
The Government said it will also support more people to become childminders, streamline the Ofsted registration process for providers and encourage the growth of Childminder Agencies.
But plans have been dismissed by the country's top trade union leader who said they "won't help". TUC general secretary Frances O'Grady said: "High-quality affordable childcare should be available for all.
"But too many parents are spending a massive slice of their pay packets on rising childcare costs, while their wages stagnate. These proposals won't help. Cutting staffing ratios will just put more pressure on underpaid and undervalued childcare workers.
"Instead of making policy on the hoof, ministers should listen to childcare workers. It's time for a proper funding settlement for childcare that delivers high-quality care, keeps the costs down for families and guarantees decent pay and conditions for workers."
Bridget Phillipson, Labour's shadow education secretary, said: "This is a pathetic announcement that fails to deliver the ambition families need to tackle spiralling childcare costs.
"Tweaking ratios is not the answer parents want and not the answer children need. The vast majority of providers have made clear this would make no difference to costs for parents.
"What's more, parents have said the current system of tax-free childcare is too complex to use even once explained. The Government is out of ideas and failing children and families alike."
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