Nurseries may have to pay their staff less than the minimum wage to break even now that parents are entitled to 30 hours of free childcare per week.
This new entitlement has been the subject of a great deal of controversy because nurseries claim the rates paid by the government to cover the additional preschool hours are insufficient.
Now the think tank New Economics Foundation has claimed the funding is so below par that nurseries may no longer be able to pay their staff a living wage. It insists they will only be able to break even if they pay a salary of £7.33 per hour. The current minimum wage for workers over the age of 25 is £7.50 per hour.
The Foundation based this claim on the fact that the current average rate for nursery care of the three- and four year-olds is £5.10 per hour but the government is only offering funding of £4.27.
Lucie Stephens is head of co-production at the New Economics Foundation. She said:
“It’s right that the government is looking at ways to deal with the crippling cost of childcare for parents. But they have to put their money where their mouth is.”
“If the government is to have any chance of delivering the ‘free childcare’ it promised to parents, it simply must invest what is needed. As it stands, the policy is, quite simply, unworkable.”