Future early years minimum wage rise 'unsustainable'

By Nina Jacobs

| 18 July 2019

The early years sector has warned it cannot afford another minimum wage increase - unless the government plugs a claimed £662m funding shortfall.

Early Years Alliance chief executive Neil Leitch has warned of ongoing pay pressures

The Early Years Alliance chief executive Neil Leitch said early years professionals deserve better pay, but highlighted new figures from research firm Ceeda, which shows that despite average pay rises, earnings are lagging "woefully behind" other sectors.

Leitch was due to reveal the findings during his evidence to the Low Pay Commission yesterday.

Ceeda found that nursery practitioners and managers received 3 per cent and 4 per cent rises respectively after the minimum wage increased this year.

However, nursery manager pay is on average £13.97 an hour compared to £20.42 per hour for other comparable professions.

Practitioners earn an average of £8.74 compared to £9.59 an hour for roles in the same occupational class, according to the Ceeda early years sector skills survey.

The Alliance said the impact of low pay was "being sharply felt" in recruitment.

There were 14,300 vacancies last year with 77 per cent of providers finding at least one vacancy hard to fill.

Early years teacher enrolment also plummeted from 2,327 in 2013 to a 365 new entrants in 2018.

"The government cannot on the one hand freeze funding for its flagship childcare schemes and with the other, enforce statutory pay rises on providers," said Leitch, adding: "It's completely unsustainable.

"The sector will fall deeper into crisis if it has to bear another minimum wage increase without government stepping up urgently and plugging the £662 million shortfall in early years funding."

The Ceeda analysis shows more than one in two childcare settings report skills gaps in their existing workforce (55 per cent) compared to 13 per cent of employers across all sectors.

Staff turnover rate for the sector is 15 per cent, although more than one in 10 providers have rates of 26 per cent or higher, the study shows.

Dr Jo Verrill, Ceeda's managing director, said: "The early years workforce plays a vital role in improving children's life chances, yet workers are amongst the lowest paid in the country.

"The shortfall in government investment is increasingly impacting on the sector's ability to recruit, retain and develop staff in a tight labour market where employment rates are at record levels."

  • The early years sector also reacted angrily to government proposals to hike Ofsted registration fees for childcare providers, without a wider funding increase. The consultation, launched today, will run until 9 October.
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