31/10/2024
Understanding the Impact of the New Budget
We wanted to take a moment to discuss the recent budget announcement and its implications for our nursery. As many of you may already know, there has been an increase in the National Living Wage, which has risen by 6.7%. Additionally, employers will face a significant rise in National Insurance contributions.
At our nursery, we pride ourselves on offering our dedicated staff wages that exceed the National Living Wage. They work exceptionally hard and are skilled professionals who truly deserve it. However, this increase in the National Living Wage will greatly impact our overall wage bill.
With a team of 22 employees, the new National Insurance rates will cost us an extra £600 per employee each year. This essentially means we’ll need to budget for an additional £13,200 annually to cover these new expenses.
As we look ahead, we are still waiting for the funding rates to be announced for April 2025. Given the current trend, it seems unlikely that these rates will see much, if any, increase. They certainly won't reflect the 6.7% rise needed to offset our higher wage bill.
So, why are we sharing this information with you? We believe in being transparent and honest about the changes that will affect our fees. Due to the increased costs we’re facing, it will become necessary to raise our fees in order to keep our nursery operating smoothly. We’re aware of the media narratives surrounding ‘inflated nursery fees’ and ‘unlawful top-up fees’. However, we want to assure you that our primary goal is to provide top-notch education and care for your little ones, which is becoming more challenging given the current economic landscape. As a profit-making business, if we do not implement a consumables and additional services fee along with raising our fees, we risk going out of business.
We completely understand that everyone is feeling financial pressures at the moment, and we want to reassure you that any fee increase will only be implemented out of necessity.
It’s also worth noting that schools receive government reimbursement for their National Insurance contributions, as the government has acknowledged their struggles. We receive the same funding rates as schools, but lack many of the additional supports they benefit from. Therefore, we kindly ask for your understanding when it comes to why nurseries have consumables fees while schools do not.
We recently came across an image created by another local business that perfectly captures the current situation.
As a small family-run nursery, we are genuinely committed to providing high-quality services for our community and creating valuable career opportunities for our staff. Your kindness and support for local businesses mean a lot to us.
This is so very true after the announcements in yesterday’s Budget 🙏