Raising the Bar, commissioned by the Trades Union Congress (TUC) and written by the Daycare Trust, comes a week after the Children's Workforce Development Council announced a new list of qualifications for early years staff (CYP Now 6-12 November).

The report made a number of recommendations to the government, including establishing a partnership between employers and trade unions to examine the impact of poor pay and conditions in the workforce. It also suggested setting new standards whereby pay and conditions improve in line with qualifications and the inclusion of these details in Ofsted inspections.

Ian Murray, policy officer for TUC, said: "You can continue up-skilling the workforce but is it tenable over the longer term with many of them earning a complete pittance?"

The prospect of government intervention has heralded a mixed response from private, voluntary and independent providers, who the report says need help the most.

"Subsidies need to be made accessible and not too prescriptive. We don't want to be jumping through hoops to get funding," said Linda Baston-Pitt, manager of the privately run Old School House Nursery in Cambridgeshire. She also said a national framework for subsidies would not work as different settings have different local issues: "I wouldn't want the government to tell me how and where I can spend my money. Salary scales can be very different from one area to the next."

Lisa Harvey, manager of Doddington Green and Keystone nurseries, which are run by the Pre-school Learning Alliance in Birmingham, said she would welcome intervention. "Anything that reviews our pay and conditions can only be a good thing. We don't get recognition for the professionals we are and it's reflected in our poor pay."

A spokesman for the Department for Children, Schools and Families said it was not the government's role to intervene in the pay and conditions offered by the private, voluntary and independent sectors.