Last reviewed 28 October 2021

Early years organisations fear that the rise to the national living wage announced in the Autumn budget will have a detrimental impact on early years and childcare providers. 

The National Living Wage, paid to employees aged 23 and over, will rise to £9.50 an hour from 1 April 2022 which is an increase of 6.6%.

The National Minimum Wage for employees aged 21-22 will also increase from £8.36 an hour to £9.18 an hour and the minimum rate for Apprentices will increase from £4.30 an hour to £4.81 an hour. All the increases will take effect from 1 April 2022.

Although the early years sector welcomes fair pay for all staff, it has voiced concerns that the additional funding announced in the budget for providing childcare places will not cover the wage increases and inflation.

In addition, although retail, hospitality and leisure will continue to be exempt from business rates, nurseries will be excluded from this relief.

Purnima Tanuku OBE, Chief Executive of the National Day Nurseries Association (NDNA), said: 

“Today’s announcement shows that the Government is still not giving the early education and childcare sector the full support they desperately need. The Chancellor promised to pay providers more, but the additional £170 million a year by 2024/25 amounts to a less than 5% increase over four years.”

“The funding for childcare places must cover the higher costs providers are facing now and next year. The childcare sector went above and beyond, supporting families and children through the pandemic. These childcare providers face a 6.6% increase in the Living Wage and inflation of 4% driven by energy costs. Failing to meet these costs increases through the early years funding package will have disastrous consequences for childcare providers.”

“We have called for nurseries, who are still being badly affected by the pandemic, to be exempted from paying business rates. Childcare businesses must be part of the relief given to the retail, hospitality and leisure sector that has been announced. Nurseries should not be penalised for the space they provide children to learn, play and develop.”