Nurseries cannot afford higher wages, sector tells pay body

Giving evidence to the Low Pay Commission, chief executive Neil Leitch said that without a substantial increase in Government funding the sector will ‘fall into a deeper crisis’ faced with wage increases for staff.

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Despite nursery managers receiving an average 4 per cent pay rise this year, and practitioners 3 per cent, early years staff are still underpaid compared to other sectors.

Mr Leitch cited new data on hourly pay rates compiled by early years data experts CEEDA.

This has found that nursery manager pay now averages £13.97 an hour compared to £20.42 per hour for comparable professional occupations, with practitioners earning an average £8.74 compared to £9.59 an hour for roles in the same occupational class. 

Sources

Sector data: Ceeda About Early Years Spring 2018 and Spring 2019 survey waves. Comparable roles: Office for National Statistics EARN06: Average gross hourly earnings by occupation Jan – March 2019. Comparable occupations are defined as those in the same major occupational group of the Standard Occupational Classification 2010.

The impact is being felt sharply in recruitment, with 32 per cent of childcare providers recruiting to 14,300 vacancies in 2018, and 77 per cent of providers finding at least one vacancy hard to fill, according to CEEDA. 

Early Years Teacher enrolment has also dropped from 2,327 in 2013 to just 365 new entrants in 2018, according to Government figures.

The evidence session was part of the Low Pay Commission’s annual consultation on wage rates with sectors traditionally associated with low pay, including retail, facilities management, and care sectors.

The evidence will contribute to the commission’s recommendations for new minimum wage and national living wage rates in its report to Government in the autumn. Any increases would come into force from April 2020.

Neil Leitch, chief executive of the Early Years Alliance said, ‘There is no doubt that dedicated early years professionals deserve better pay. But the Government cannot on the one hand freeze funding for its flagship childcare schemes and with the other, enforce statutory pay rises on providers. It’s completely unsustainable. 

‘Giving evidence to the Low Pay Commission offers us another route to tell Government decision-makers what they already know: that 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.’

CEEDA analysis also shows that 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. The staff turnover rate for the sector is 15 per cent, although over one in ten providers have rates of 26 per cent or higher. 

The data comes from Ceeda’s About Early Years Sector Skills Survey, and its report Counting the Cost, published earlier this year.

Dr Jo Verrill, managing director, CEEDA research 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.’

CEEDA analysis also shows that 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. The staff turnover rate for the sector is 15 per cent, although over one in ten providers have rates of 26 per cent or higher.