Nursery World reported last week that private, voluntary and independent settings (PVI) in Birmingham had been told that from April 2015 if they received funding to deliver free places, they would have to follow the Birmingham Charter for Social Responsibility, which stipulates that employees must be paid the Living Wage.
However, following concerns from a number of nursery owners, the council has decided to delay the implementation of the Living Wage element of the charter for early years settings until September 2015.
It comes after the Department for Education said it was looking into Birmingham City Council’s move to force early years providers to pay the Living Wage, set at £7.56 per hour.
According to the council, which has sent a letter to all PVI providers, the delay will allow for the conclusion of its current Early Years Review, which will include a review of the level of funding for early education places, and a period of consultation.
Several nursery owners told Nursery World that at the current rate of funding - £3.54 for three- and four-year-olds - paying employees the Living Wage would be unaffordable and put them out of business.
One provider with three nurseries in Birmingham said if she had to pay staff the Living Wage it would cost her £160,000 more per year.
The letter to providers from Birmingham’s cabinet member for children and family services, councillor Brigid Jones, and the cabinet member for commissioning, contracting and improvement, councillor Stewart Stacey, states, ‘ We have listened to feedback and as a result are proposing to delay the implementation of the Living Wage element of the Charter within the contracts for Early Education Entitlement for providers.
‘In order to understand the financial implications of this policy, we intend to start a period of consultation on how it will be implemented. As part of the consultation, one proposal will be to commission an external consultant to undertake an independent analysis of the actual cost and impact on providers and users, including any impact on the charges for childcare fees that parents would be required to pay.’
But the letter goes on to say that the council still intends to introduce formal contracts between itself and providers that receive early education funding from this September. This will mean that settings will still have to follow certain elements of the Birmingham charter, such as committing to protecting the environment, and minimising waste and energy consumption.
The councillors conclude, ‘We recognise the incredible contribution that the PVI sector makes to the lives of children and families in Birmingham. However, we know that as a council, we have to create conditions where you are able to make that change and we hope that in the consultation we can best plan for how to do this.
‘We would like to apologise sincerely for the confusion and worry that has occurred over the last week regarding the intention behind this policy.’
Sarah Presswood, owner of George Perkins Day Nursery in Birmingham, said, 'I don’t think many people within the council realised the extent to which they need the PVI sector to help them deliver the early education places in the city, and it was only when they understood the potential impact of losing a large proportion of those places that they saw the need to look at the introduction of the Living wage in a more comprehensive way.
'I am really pleased that councillors have listened to providers and have understood that this is not only about the Living Wage, but also about the way in which PVI providers are funded to deliver the free places. I look forward to working with the local authority to arrive at a solution which is best for providers, their staff and the children who attend their settings.'
