Early years organisations have called out Jeremy Hunt for ignoring the sector in his autumn statement on Wednesday.
The National Day Nurseries Association (NDNA), a charity representing nurseries in the UK, accused the Government of caring more about “pubs and shops" than "our children’s future."
Purnima Tanuku, CEO of NDNA, said: "In his Autumn Statement , the Chancellor announced 110 growth measures to support businesses but not a single one will help the early education and care sector which is at crisis point. The Government seems to care more about pubs, shops and the technology sector than our children’s futures."
Mr Hunt announced the national living wage will increase to £11.44 per hour. Nearly three million "low-paid workers” will benefit and see an increase of 1,800 in their wages.
The national minimum wage will also rise from £8.60 an hour to £11.11 for those aged between 18 and 20.
The NDNA argued, since the national living wage was introduced, it has risen by 52-62 percent but the funding rate for early years providers has remained at 21 per cent.
According to Early Alliance, the early years education charity, 3000 nurseries were closed down by Ofsted last year due to financial pressures with many facing increased energy, food and staffing costs struggle to operate. The NDNA also reported a 50 per cent increase in nursery closures between 2022-23.
London Early Years Foundation CEO, June O'Sullivan, said while she welcomes the increase in the living wage, it will “only be effective if funding and provision are adequate as part of the Government's ambition to create the 'biggest expansion of childcare in history.”
She added: "If the sector is to survive, then Mr Hunt must keep his Spring Budget promise to parents and address the urgent workforce crises at this crucial time when every decision and every penny counts."
The Spring Budget will introduce a 30-hour free childcare scheme for parents with children aged between nine months and three years in 2025, but childcare providers are skeptical this will resolve the issue, especially at the current rate of funding.
Charlie Rosier, founder of Babbu, an early years education app for parent said: "Without any increased funding mentioned, this increase in overheads will put many more nurseries, already struggling, underwater."
The rise in the minimum wage might significantly impact providers as the staff wages account for around 75 percent of their costs.
Nadia Hewston, a retired teacher with 25 years of experience, said the increase in wages will "help the profession in terms of recruitment and retention of early years staff," but without funding, it will lead to a bigger issue.
She said: "In short the Government is seemingly responding to what school leaders are saying but school leaders are being left with an equally challenging conundrum."
"It’s not real investment. Early years leaders and staff are leaving in droves and this may be the final straw for many more."
