The Department for Education’s increased level of investment was based on our ‘Review of Childcare Costs’. The review looked at both the current costs of childcare provision and the implications of future cost pressures facing the sector, including the National Living Wage.
We have commissioned new research from Frontier Economics to provide further data on the cost of providing childcare, which will look at the effect of National Living Wage. This year we will also be enhancing our annual Survey of Childcare and Early Years Providers with more detailed research on provider finances and childcare costs, which will take into account the National Living Wage.
In terms of the rate of the National Living Wage, the independent Low Pay Commission makes recommendations, taking in to account the state of the economy and evidence from a wide range of business and workers representatives.