After last week’s election results, all eyes are on David Cameron and what the priorities for the Conservative government will be over the coming year. As part of the Tory manifesto, there are a number of policies that the party plan to introduce which will affect childcare providers. Not all of them will be welcome, as we discuss here:
Double free childcare allowance for three and four-year-olds to 30 hours
Currently, parents get 15 hours free childcare per week, so doubling the number of funded hours will certainly help many parents back into work or training. It would also help alleviate some of the financial pressure associated with childcare costs for families. However, most nurseries already struggle with a funding deficit of £800 per child per annum for 3-4 year olds. If the government does not take steps to address the current underfunding issues, many providers will struggle to absorb the extra cost.
Increasing the minimum wage to £6.70 by the autumn and to £8 by the end of the decade
This is great news for Early Years staff, whose passion and dedication for childcare has come at the cost of having to budget carefully for their everyday expenses. Most nurseries are only able to pay the Living Wage to some of their staff (currently £7.85 an hour), with less qualified staff often paid at minimum wage. An increase in minimum wage will put extra pressure on parent’s budgets, as fee increases will be passed onto them from childcare providers.
Creating 3 million new apprenticeships
Currently, the government funds 100% of the training costs for 16-18 year old apprentices. This policy is good news for helping to encourage more young people to work in childcare via an apprenticeship route. That said, the current academic barriers for those who want to do their EYE qualification will still stand in the way of many good practitioners progressing their career.
Taking everyone who earns less than £12,500 out of income tax
Basic rate tax at 20% currently applies to those earning £10,600 or more. Having a higher personal allowance means that income tax will only apply once someone earns £12,500. This will be a welcome relief to everyone, but especially for those working in childcare and earning minimum wage.
Over the course of the first few months of the new government, the childcare sector is waiting with baited breath to see how and when the promised changes will take effect. It is hoped that, amidst the government’s intention to help alleviate some of the financial pressures of childcare for hard working families, they won’t forget that providers also need to be adequately supported so they can deliver a sustainable and high quality service on the front line.