Government funding rates need to factor in Living Wage increases

The Living Wage Foundation which oversees the voluntary Real Living Wage has announced an increase of 20p today to what they believe is a fair hourly salary.


This takes the Real Living Wage to £9.50 per hour compared with the compulsory National Living Wage which is currently £8.72 for those over the age of 25.

This will affect more than a quarter of a million employees whose employers are signed up to giving staff at least the Real Living Wage.

Childcare providers in Scotland who are signed up to delivering 1140 hours of funded childcare for three and four year olds will have to pay their staff members the Real Living Wage once the National Standard is introduced next year.

NDNA has called for this increase to be built into funding rates for childcare providers.

Purnima Tanuku OBE, Chief Executive of NDNA said: “Nurseries and other childcare settings work hard to pay their dedicated staff the wages they deserve, but are hamstrung by low hourly rates they receive for funded places.

“Increases to the Real Living Wage are good news for workers in low-paid sectors. While childcare has traditionally been seen in this bracket, the Low Pay Commission has identified the sector as ‘fee takers’ with government funding rates acting as a brake on earnings.

“In the current pandemic childcare providers are open for children and families but face higher running costs at a time of reduced income. 

 “As nurseries in Scotland look ahead to the full roll-out of 1140 hours of childcare to three and four-year-olds, they will have to pay staff the Real Living Wage once it becomes a National Standard requirement next year. If this is to be a reality, the sustainable rates paid by councils must clearly show how increases like this have been factored into their funding.

“In England, the Government must factor annual increases like this into the hourly rates providers receive if we are to give children access to high quality early education and childcare. Childcare is essential for any plans for parents to re-enter work or training. A plan for jobs needs a Plan for Childcare.

“As the Welsh Government reviews the rates for the Childcare Offer and Foundation Phase, they must factor in the increases in staffing costs needed to attract and retain the right staff for the sector.”