Living wage introduced on 1st April means rise in fees for childcare providers
The rise in the National Living Wage will mean many childcare providers will not be able to pay staff costs unless they raise childcare fees. The National Living Wage has increased to £7.20 an hour for employees 25 or over.
Neil Leitch, of the Pre School Learning Alliance, said, ‘We fully support the principle of the “National Living Wage”. That said, the reason that the early years sector has historically been a “low-pay sector” is because it has also historically been significantly underfunded by Government. The vast majority of childcare providers would love to be able to pay their staff a higher wage, but simply cannot afford to do so at current funding levels.’
Many childcare providers will have no other choice but to raise childcare fees by 5 per cent this year. It has been said that the rise in the National Living Wage will increase a settings payroll by an estimated 10 per cent.
Not only are childcare setting going to have to put up childcare fees but they potentially may lose qualified practitioners. Many qualified employees are disgusted that those who are 25 and over and less qualified are are being paid more than those that are higher qualified, many people are asking the question where’s the incentive for higher qualified staff?
We would like to hear how this is going to affect your childcare business?