Early Years Wales welcomes the positive news announced by the Welsh Government on 10th September, stating that public sector workers, including teachers, will receive a 5.5% pay rise [1]. The pay increase reflects the real value that the public sector workers play in our society and a desire to support the professions working with children in Wales. Staff working in childcare make a significant contribution to child development, early education, and supporting the families of children aged 0-5 in Wales, however, almost all settings will struggle to match this kind of pay increase for their own staff based on the current models of financial support to the sector.
Last week, the Welsh Government produced a piece of research detailing a review of business rate relief for childcare properties. Business rate relief is vital for settings across Wales, as it means they do not have to foot the bill for unanticipated business rate hikes. In April 2019, the Welsh Government's Small Business Rates Relief scheme was enhanced in April 2019 to provide 100% relief to all registered childcare premises in Wales for a three-year period. This was extended to March 2025 in September 2021 [2]. Providing business rate relief for childcare settings in Wales is vital during the current cost of living crisis, allowing settings to provide affordable childcare for their community.
In England, where business rate relief is not provided, research by the National Day Nurseries Association (NDNA) found that the April 2023 UK Government budget caused a 40% increase in bills for nurseries [3]. This increase in costs led to negative impacts on staff wages, as well as the amount of money the setting was required to charge for their services.
A 2022 survey conducted by Early Years Wales and ARAD found that 42% of staff who left the childcare sector did so to find better pay in another sector [4] with 54% of respondents saying that the salary on offer was too low to attract new staff [5]. Therefore, any increase in costs caused by the removal of business rate relief would have a catastrophic impact on the survivability of settings.
Sustaining and developing sufficient affordable childcare for children and families is crucial in tackling poverty and promoting the importance of equality of opportunity. Removing the 100% business rate relief will only worsen existing inequities, forcing nurseries to charge more for their services in order to meet the costs of business rates, an action that in turn prices out families on lower incomes.
Therefore, whilst early years staff are not benefitting from the public sector pay increase, a promise from the Welsh Government to extend business rate relief will come as a significant relief for the sector, in a time where financial uncertainty is causing more issues than ever before.
David Goodger, CEO of Early Years Wales, said:
“Business rate relief is vital to the survivability of childcare settings here in Wales. Existing research shows that many private settings are struggling with the current cost of living crisis, meaning that Business rate relief frees up vital funds allowing settings to continue paying their staff and providing a crucial service to their local community. Ensuring childcare is available to and accessed by the most disadvantaged children and families in our society is vital. This is an important aspect of realising the Welsh Government's anti-poverty strategy and championing social justice.”
ENDS
Early Years Wales: https://www.earlyyears.wales/en
More information on Welsh Government rates relief: Rates relief extended for childcare providers until 2025 | GOV.WALES
NDNA research: Childcare crisis: business rates bills shoot up by 40% for nurseries - NDNA
Early Years Wales and ARAD survey: https://cwlwm.org.uk/our-work/reports
Welsh Government's Public sector pay increase: https://www.gov.wales/first-minister-announces-public-sector-pay-rises