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<p>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.</p><p> </p><p>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.</p><p>
</p><p>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.</p>
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