NLW increase could be "final nail in the coffin" for early years settings without adequate sector funding, Alliance warns

Commenting, Alliance CEO Neil Leitch said:

"While in theory, today's announcement should be warmly welcomed by the early years – especially given the historic low rates of pay in the sector – in reality, this news is likely to spark serious concern among providers.

"For years now, government funding for the so-called 'free entitlement' offers has failed to keep pace with the rising costs of delivering places. With staffing costs accounting for around three-quarters of provider costs, there is no doubt that the announced increase in the national living wage – and plans to extend it to employees aged 21 and 22 - will have a huge impact on setting budgets.

"With the phased roll-out extension of the entitlement offers to one- and two-year olds just months away, ensuring that the early years sector is adequately funded, not just today, but in the long term, has never been more vital.

"It is critical, therefore, that the Chancellor uses the Autumn Statement to commit to the additional funding settings need to remain sustainable. If not, this could be the final nail in the coffin for settings across the country."