Call for investigation into 'living wage' childcare plans

Neil Leitch wants the Department for Education to formally examine proposals put forward by Birmingham City Council, claiming they are a clear breach of government guidelines.

Under a government scheme, all disadvantaged two-, three- and four-year-olds are entitled to up to 15 hours of free childcare from a local provider, with funding for the initiative allocated to nurseries through local authorities.

Statutory guidance states that local authorities must automatically fund all “good” and “outstanding” providers to deliver the scheme unless there is a safety concern.

But Birmingham City Council wants to require all nurseries in the private, voluntary and independent (PVI) sectors to sign the Birmingham Business Charter for Social Responsibility if they wish to contract with it and continue to receive funding to deliver the free childcare scheme from April 2015.

All signatories to the charter are required to pay their employees the living wage – an independent rate set annually by the Centre for Research and Social Policy at Loughborough University on behalf of the Living Wage Foundation – which is significantly higher than the minimum wage that many nursery workers are paid.

Leitch said the plans highlight the impact of underfunding in the sector.

He said: “We of course agree that all early years practitioners should receive a fair level of pay and have long lobbied on this point.

“However, forcing providers to pay the living wage as a condition of free entitlement funding, without any increase in funding levels is naive, unrealistic and unsustainable.

“Such an approach would also appear to directly contradict the DfE’s assertion that local authorities cannot withhold funding from ‘good’ or ‘outstanding’ providers for any reasons other than safety concerns.”

A spokesman for the DfE has confirmed that the department is looking into the proposals.

However, a council spokesman has defended the move and said the proposed changes will put the authority’s relationship with PVI nursery owners on a “sounder footing”.

A formal consultation on the proposals will be launched later this year.