Nursery staff 'require pay cut' for 30 hours childcare to be sustainable

As of this month, working parents in England are now entitled to 30 hours of free childcare for three- and four-year-olds, up from the previous 15 hours.

Research by the New Economics Foundation found that for nurseries to break even without passing on costs they would have to pay their staff £7.33 an hour, which is below the national minimum wage for 25-year-olds and over of £7.50 an hour.

The think-tank said the discrepancy comes because, on average, parents are currently charged £6 per hour for childcare for under-2s, £5.30 for 2-year-olds and £5.10 for 3- and 4-year-olds, but the government is offering providers £4.27 per hour for this same care, "leaving nurseries with a significant gap in their finances".

It said that, in order for nurseries to break even they would have to cut the pay of 62 per cent of the least-qualified nursery workers in the country.

Of nursery workers with at least A-level equivalent qualifications, 85 per cent could expect a pay cut.

Lucie Stephens, head of co-production at the New Economics Foundation, said nurseries are faced with either passing the extra cost to parents or squeezing workers wages.

"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.

"This research shows that the whole system for funding childcare in this country doesn't really work.

"We need to support new and better ways of doing childcare. When parents have real control over the design and delivery of the care their children receive, it becomes more affordable and more suitable for their needs."

Neil Leitch, chief executive of the Pre-school Learning Alliance, described the figures in the report as "shocking".

"How can it be that the government's flagship childcare policy is so underfunded that early years staff would theoretically have to be paid illegally low wages in order to make it work?" he said.

"It is vital that all those working in the early years are paid a fair wage for what is a vital job.

"And yet we know that many childcare providers face a renewed struggle to keep their doors open every time the national living or minimum wage goes up.

"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."