Treasury Select Committee inquiry into childcare policy and its influence on the economy
In its response to this inquiry, NDNA outlined the central role that high quality, accessible, flexible and affordable childcare plays in child development and supporting working families. Childcare is a major employer supporting 250,000 jobs in the UK, mostly for women. It is particularly crucial in deprived communities where good quality employment opportunities may be at a premium.
The introduction of 30 hours funded early years entitlement has directly threatened the business viability of nurseries in England due to chronic insufficient funding from central government. Hourly funding rates should be increased substantially to reflect delivery costs. Nurseries should be given the flexibility to make mandatory charges to parents to ensure the ongoing viability and sustainability of their business models and control how and when they deliver their funded offer.
Staffing makes up the lion’s share of costs facing nurseries. Increases in the National Living Wage and national insurance and pension contributions are expected to increase staffing costs by 6% from April 2018. The UK Government should make private nurseries exempt from business rates, following the lead of the Scottish government who are bringing in exemption from April 2018 and the Welsh Government who are significantly increasing the rateable value for nurseries to £20,500. To keep pace with inflation and protect viability and quality of childcare an annual Living Wage Factor increment must be added to early years funding allocations.
The sector is struggling to recruit qualified staff, largely due to low pay caused by underfunding. Nursery staff need to be adequately remunerated for their work to ensure they are productive members of the workforce and to ensure nurseries have a reasonable level of staff retention.