Nursery workers’ wages could have to be slashed to pay for the Government’s 30 hours of free childcare scheme, according to new research.
The New Economics Foundation think tank found nurseries would have to pay staff £7.33 an hour – below the minimum wage – to break even without passing on costs for the plan.
It would mean a pay cut for 62% of the least qualified staff, and one of 85% for those with at least A-level qualifications.
On average, parents are charged £6 per hour for under twos, £5.30 for two-year-olds and £5.10 for three and four-year-olds – but under the plans the Government is offering £4.27 per hour for the same care.
The think tank said nurseries would look at making savings elsewhere, by cutting services or charging more for other extras such as foods, nappies and activities – leaving parents to fill the funding gap.
Lucie Stephens, of the New Economics Foundation, said: “It’s right that the Government is looking at ways to deal with the crippling cost of childcare for parents. But they have to put their money where their mouth is.
“This research shows that the whole system for funding childcare in this country doesn’t really work. Nurseries will either pass on the extra cost to parents, cut services or squeeze their workers’ wages. None of that is good news.
“We need to support new and better ways of doing childcare. When parents have real control over the design and delivery of the care their children receive, it becomes more affordable and more suitable for their needs.
“At the New Economics Foundation we are working with parents to develop new models of childcare, which combine decent pay and conditions for staff with real control and affordability for parents.”
Children and families minister Robert Goodwill said: “We are determined to support as many families as possible with access to high-quality, affordable childcare, which is why we are investing a record £6 billion every year by 2020 in childcare – more than ever before – and doubling the free childcare available to working parents to 30 hours a week, saving them up to £5,000 a year per child.
“This funding includes an additional £1 billion per year by 2019-20 to pay for the free childcare offers and to raise the national average hourly rate paid to councils for three and four-year-olds to £4.94.
“This was based on a comprehensive review of childcare costs, which took into account current and future cost pressures.
“Recent research has also shown the average hourly cost of providing childcare for three and four-year-olds to be far lower than what we are providing.”