Nursery costs fear after minimum wage risepublished at 15:54 British Summer Time 26 October 2021
Government plans to increase the minimum wage could lead to a rise in childcare costs for parents, a care provider in North Lincolnshire has warned.
Steve Foster, from Scunthorpe, runs a children's nursery and is worried the rise in the National Living Wage announced yesterday will have a detrimental effect on his business.
He says: "We run a children's nursery employing 30 staff. The wage bill is 75% of our turnover. A 6.6% increase in the wage bill means we will have to increase our fees by £15 per week.
"This may mean that parents may decide it is no longer worthwhile going to work.
"In addition, if the government do not increase the rate they pay us for free childcare we will not be able to provide the 30 hours' free childcare to many of our parents.
"I wonder if the government has considered the extra childcare costs for parents when increasing the minimum wage".
Chancellor Rishi Sunak said the rise "ensures we're making work pay and keeps us on track to meet our target to end low pay by the end of this Parliament".
Campaign group the Living Wage Foundation welcomed the increases, but said there was still "a substantial gap" between the government-mandated minimum wage and its own calculations of a real living wage based on living costs.
The foundation's director, Graham Griffiths, called on employers to "commit to go beyond this new government minimum, do the right thing, and commit to pay a real living wage".