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40% of childcare workers on National Living Wage are underpaid

By Rachel Lawler
crayons early years
The Low Pay Commission’s latest report has highlighted concerns about staff wages and underfunding in childcare.
The report says that two-fifths, or more than 40%, of childcare staff on the National Living Wage were underpaid in 2018.
The Low Pay Commission says that this is “by far” the highest rate of underpayment in any one sector. It noted a trend in sectors directly affected by government funding, and said that these sectors were afraid that these concerns would not be alleviated.
Funding pressure
The report says: “Providers were keen to have the best-qualified staff possible (a key factor for parents choosing nurseries being good staff), but funding pressure made this increasingly difficult.”
It also notes that staff are said to be leaving the sector to move into schools or other sectors for better pay compared to the level of responsibility.
Inadequate funding
Neil Leitch, chief executive of the Alliance, said: “While the Low Pay Commission report found that, in some sectors, employers have been able to find ways to adjust to the rising National Living Wage without too much difficulty, the same is simply not the case in the childcare sector.
"No one doubts that early years practitioners deserve salaries that reflect the quality and importance of their work – but inadequate funding rates mean that increases in the national living wage are often a cause of concern rather than celebration in the sector.
Funding frozen
“As highlighted in our response to the Low Pay Commission consultation, staff costs account for around three-quarters of providers' overall outgoings - as a result, increasing statutory wages at a time when funding is frozen at a level set several years ago is putting many in an impossible position.
"With only two local authorities across the whole of England seeing any increase in early years funding rates next April, the implementation of the next increase in the national living and minimum wages is likely to have a devastating impact on some childcare providers.
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