Childminders face being driven out of business by a sevenfold increase in registration fees, children’s charities and industry leaders warn the Government today in a letter to The Times.

Ofsted intends to impose a sharp rise in annual charges for nurseries and other daycare providers, which must be registered with the regulator. Among the hardest hit will be childminders, who care for more than a quarter of a million children.

Their registration fees are expected to rise in September from £15 to £103. For day nurseries, the cost will treble from £155 this year to £450 in 2010. Charities and early-years experts have voiced their opposition to the plans in a three-month government consultation that ends today.

They say that nurseries and childminders would be forced to close or pass on their extra costs to parents, resulting in fewer childcare places and less parental choice, at a time when the Government is encouraging mothers to return to work.

The letter, from the chief executives of the National Childminding Association, the National Day Nurseries Association, Preschool Learning Alliance, the Daycare Trust and 4Children, a family support charity, said that fees would rise between 190 and 2,150 per cent in the next three years.

They added: “We are alarmed at the potential impact of these proposed increases upon parents and providers.

“The proposals will potentially undermine the sustainability of many childcare businesses, and cause a number to close.

“Alternatively, childcare providers will have to raise fees.”

The Government wants Ofsted, which costs taxpayers £236 million a year, to start making money to cover some of its costs. Under the plans, childminders who look after children aged between 5 and 7 will pay the new fee from September. Those caring for younger children face fees of £100 a year instead of £20 at present, but the increase will be delayed until 2010.

The proposal was slipped out in a consultation document by the Government, and many childminders are thought to be unaware of the increase.

Critics say that the Government has recklessly expanded the remit of Ofsted, which inspects schools, nurseries, children’s social services and childminders, without considering who is going to pay. Increased bureaucracy has been blamed for falling numbers among childminders, who charge an average of £3 an hour per child.

Andrew Fletcher, a spokesman for the National Childminding Association, said: “This is a significant new financial burden for registered childminders. The majority are single-person businesses, run from home.”

Many private nurseries are already financially stretched because the Government is demanding that they offer more free hours to parents, so that Labour can fulfil its manifesto pledge of 15 free hours a week by next year.

Nurseries say that the funds for the free hours, given through local authorities, do not cover their costs and they are being forced to subsidise them.

The National Day Nurseries Association said that the higher Ofsted fees would inevitably lead to higher prices for parents.

A spokeswoman for the Department for Children, Schools and Families said: “When we consulted on the childcare registration and inspection fees in 2006, the majority of respondents supported our proposals that fees and subsidy arrangements should be changed to achieve a fairer balance between the fees providers can afford to pay and support from the taxpayer.

“We are introducing a fairer, simplified fees system linking fee levels to potential income. We are not removing any of the childcare subsidy, but local authorities will be better placed to target providers who can provide the childcare that parents need in their area.”

Times recommends

• McDonald’s: the world’s local restaurant
• Help me to be a mum: a foyer to fulfilment
• A life online: God likes a laugh