Nurseries are being urged to take part in a survey of nursery pay rolls to explore the impact that the National Living Wage will have on providers.
The National Day Nurseries Association (NDNA) wants as many nurseries as possible across England to take part in the poll so it can lobby effectively for the right funding package.
The Chancellor announced as part of the Budget that the Government is to bring in a compulsory Living Wage for people over the age of 25 next year. Many nursery workers receive the national minimum wage so will see their pay per hour increase from the national minimum wage of £6.50 to £7.20 in April 2016, rising up to £9 per hour by 2020.
This is obviously welcome news for nursery workers. However nursery providers are very concerned about the impact paying the Living Wage will have on their businesses, particularly with the 30 hour offer for three and four-year-olds due to be implemented from 2017.
Purnima Tanuku, chief executive of NDNA, said: “Many thousands of people who work in nurseries are paid at, or close to, the National Minimum Wage of £6.50 per hour.
“The National Living Wage for over 25s, announced in the Summer Budget, will be set at £7.20 from April next year. That means a 10.7 per cent pay rise for nurseries’ lowest-paid employees.
“While we support the National Living Wage in principle, and want to see better remuneration for the talented and dedicated people who work in the sector, this will have a huge impact on nurseries’ pay rolls at a time when increased business costs and chronic underfunding are already causing a financial squeeze.”
NDNA wants the Department for Education to factor increased costs into its current review of nursery funding – and warns a meaningful uplift is crucial for nurseries to provide free places sustainably.
Ms Tanuku added: “It’s crucial that childcare providers get more money to cover the cost of providing free hours. The majority of nurseries currently make a loss on these places - £800 per year on average, for each three and four-year-old place.
“Nurseries need to be able to cover the cost of the high quality care they provide and be able to operate sustainably, with money to invest in training and development for their workforces.
“If the Government does not address this, nurseries will struggle to offer more funded places and costs will rise for parents whose children don’t qualify for free care, or who pay for more hours than the Government offers.
“We want to really understand the financial picture and nursery owners’ and managers’ projections for the months and years ahead, so that we are armed with clear, accurate information to take to the Government.”
NDNA’s National Living Wage Impact Survey calls on nurseries to disclose numbers of staff currently paid at National Minimum Wage, forecasted pay roll costs when the National Living Wage is implemented and the likely impact on the cost of delivering funded sessions.
The survey is here: www.surveymonkey.com/r/NDNANationalLivingWageSurvey2015
It runs until July 31. Findings will be announced in August and presented as part of NDNA’s response to the Department for Education’s call for evidence on nursery funding.