Budget commentary from Courteney Donaldson, Head of Childcare
What does the announcement mean for the Childcare sector?
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One of the key budget announcements today was the increase in the national living wage to £9 per hour from 2020. This will have a big impact on businesses such as those in the childcare and care sectors and whilst the increase in living wage should be welcomed, local authorities need to properly cost care delivery across both childcare and care (residential and nursing) sectors.
A recent report by KPMG which surveyed 64 day nurseries and 15 childminders commissioned by Birmingham City Council found that nurseries would face bills of nearly £2,000 more per 30-hour working week if they all gave staff the same percentage wage rise, equating to a jump of 17 percent. However, relief to small business may come in the form of the announcement today that National Insurance employment allowance will be increased by 50% to £3,000 from 2016, whether this will be enough to cover costs remains to be seen.