Minimum wage rise hits nursery fees

Earlier this month the Government announced that the minimum wage for employees aged 22 and above would rise to 5.05 an hour in October, up from Pounds 4.85. The rate for 18- to 21-year-olds will rise to 4.25 an hour, up from 4.10 an hour.

Kim Welsh, owner of Springboard Nurseries, a group of four settings in Bournemouth, said that the rise would 'impact fairly substantially'.

Although Ms Welsh pays all her staff above the adult minimum wage, she said there would be an inevitable 'knock-on effect'. Her fees will rise by 6 per cent, partly to take account of the increase. She said, 'You can't push fees up too much because you would price yourself out of the market. It eats into our profit margins, because you can't push all the costs on to parents.

'It's good for staff, because it recognises their value, but it is cause for concern because we do not have access to a never-ending pot of money, and there is only so much parents can pay.'

Debbie Wylie, owner of Little Angels, two nurseries in Cramlington, Northumberland, said, 'It's a constant anxiety for me, how much I can pay my staff. They are worth so much more.' She said she had always strived to pay employees above the minimum wage, but '5.05 is a huge increase.

I think a lot of settings will struggle. I don't believe I can squeeze parents any more.' She said her wage bill would increase by 5 per cent.

Rosemary Murphy, chief executive of the National Day Nurseries Association, said, 'We all support better wages, but unless more Government investment comes direct to providers, the only way we will support higher salaries is through higher fees. Affordability remains the key issue that unites childcare providers and parents.'