Last reviewed 13 November 2020

The National Day Nurseries Association (NDNA) has called on governments in England, Scotland and Wales to increase early years funding so that nurseries can afford to pay staff the real Living Wage which has increased by 20 pence an hour.

The Living Wage Foundation sets the voluntary real Living Wage which is intended to meet the real cost of living and everyday needs. It has announced the new rate for 2020-2021 is set to rise by 20p to £9.50 across the UK and by 10p to £10.85 in London. This compares to the compulsory National Living Wage of £8.72 per hour which is currently paid to those over the age of 25.

This increase will affect more than a quarter of a million employees whose employers are voluntary signed up to giving staff at least the real Living Wage. The new Real Living wage rates are effective immediately, although employers who are already part of the scheme will have six months to bring in pay rises.

The announcement follows new research by the Living Wage Foundation which reveals the scale of low pay during the pandemic. Although 800 employers have signed up to the scheme since the start of the pandemic, 20% of all employees are still being paid less than the real Living Wage in the UK.

Childcare providers in Scotland who are signed up to delivering 1140 hours of funded childcare for three and four-year-olds will have to pay their staff members the real Living Wage once the National Standard for early years and childcare is introduced next year.

The early years sector is now calling for this wage increase to be built into funding rates for childcare providers. Purnima Tanuku OBE, Chief Executive of NDNA, said:

“Nurseries and other childcare settings work hard to pay their dedicated staff the wages they deserve, but are hamstrung by low hourly rates they receive for funded places. Increases to the Real Living Wage are good news for workers in low-paid sectors. While childcare has traditionally been seen in this bracket, the Low Pay Commission has identified the sector as ‘fee takers’ with government funding rates acting as a brake on earnings.”

“In the current pandemic, childcare providers are open for children and families but face higher running costs at a time of reduced income.”

“As nurseries in Scotland look ahead to the full roll-out of 1140 hours of childcare to three and four-year-olds, they will have to pay staff the Real Living Wage once it becomes a National Standard requirement next year. If this is to be a reality, the sustainable rates paid by councils must clearly show how increases like this have been factored into their funding.”

“In England, the Government must factor annual increases like this into the hourly rates providers receive if we are to give children access to high quality early education and childcare. Childcare is essential for any plans for parents to re-enter work or training. A plan for jobs needs a Plan for Childcare.”

“As the Welsh Government reviews the rates for the Childcare Offer and Foundation Phase, they must factor in the increases in staffing costs needed to attract and retain the right staff for the sector.”