Is my nursery overcharging me?

(10 Posts)
OmarLittle Wed 14-Mar-12 13:28:25

Hi,

I really hope you can help me - am very confused! Sorry this is a bit long winded.

I have just enrolled my daughter in a new nursery

She's 4 in April, so is entitled to the early years funding. But as she only does 2 days at the nursery, she only receives 12.5 funded hours a week, out of the 20 hours that she's there.

Therefore I have to pay a top-up for the 7.5 hours a week that are not funded. That's all fair enough.

The nursery claim they do not have an hourly rate. However, non-funded children are charged £45 a day (for a 10 hour day). Therefore if my daughter received no funding, I would be paying £390 a month (£45 * 2 = £90 a week; £90 * 52 = £4680 a year; £4680 a year divided by 12 = £390).

The nursery have asked me to set up a standing order for a monthly payment of £323.69, which they say is the correct charge for my daughter with the funding.

I was not expecting it to be so high! When I queried it, they told me that funded children are charged at a 'higher rate' than non-funded children. In other words, the 7.5 hours a week that I pay for are charged at a higher rate than the £45 a day charged to non funded children. When I asked them what the higher rate was, they could not tell me. However, I calculate it to be roughly £10.79 an hour, and therefore roughly double what they charge non funded children. (7.5 hrs a week * 4 weeks in a month = 30 hours a month; £323.69/30 = £10.79 an hour).

In addition, as their 'higher rate' is so much more than their standard rate, it seems to me that they actually make more money from a funded child, then they do from a non funded child. For example, they receive roughly 4 weeks of funding in May 2012. I understand that my local authority pay them £3.49 an hour for the funded 12.5 hours. So this means that in May they will receive roughly £174.50 in funding (12.5 * 4 weeks = 50 hours; 50 hours @ £3.49 = 174.50)

If I also pay them the £323.69 in May, then they will receive a total of £498.19 - that's £108.19 more than a non funded child!

I know they won't always get that much more, because some weeks are not funded, but on balance, they will get more overall from a funded child than a non funded child.

My question is - are they allowed to do this? And do I just have to swallow this much higher than anticipated charge, bearing in mind that they did not explain this to me beforehand, and that they appear to be making extra money from funded children, on top of what they would get if the child were not funded?

Really appreciate any help!

BikeRunSki Wed 14-Mar-12 13:36:40

I am confused too.
My DS is 3, he does 3 x 10 hour days at nursery and has done since he was 1 and I went back to work. He started getting the Ealy Years funding in January and they just knock off the equivalent of 15 hours. They don't have an hourly rate as such ie: if you go for part of a day you have to pay for either a full day or half day, but for the purposes of incorporating Early Years funding into the bills for children who also have day care, then they reduce the bill by 15 x 1/10 daily rate and add £2.50 for meals. If the child does not do 15 hours, then they just use the funding - ie no extra cost to parent. it doesn't seem to matter how many days the hours are spread over.
Based on this, I think your nursery may be overcharging you.

Pozzled Wed 14-Mar-12 13:57:03

I think they are overcharging you.

Do you know how many hours you'd be entitled to if you only claimed for one day? Is is 10 hours? (Tried to search online and couldn't immediately find out). Because you'd actually be better off if you had one free day and one day paid at the normal rate.

My nursery uses a similar method to BikeRunSki's - they calculate all the free hours for each term and subtract them from the bill.

I'd go back to the nursery and ask to see exactly how they arrived at that figure. They are a business, and you wouldn't pay for any other service without knowing exactly how the costs break down. They can't just give you a figure and expect you to take it on trust.

dribbleface Wed 14-Mar-12 20:04:34

So they are charging
£1657.75 grant funding (38 weeks funding)
£3884.16 fees
=£5541.91/12 - £461.83 per month plays £390 for non funded?

Thats outrageous. I have sympathy for settings where the grant means they make a loss and they find inventive ways to make up the shortfall (I'm a nursery manager and we do not do this!) but they are clearly taking the micky. Are the funded and non funded children in the same room/do same activites etc? Our contract with the council specifically states that we must not charge funded children more per hour than non funded children for hours outside of the nursery grant. They should have a similar contract with your local authority as they are all based on the same code of practice. Also why 12.5 hours funding, most settings offer up to 15 per week so over two days we would claim 12 hours.

Ask for a clear explanation and if not take up with the early years department at your local council.

dribbleface Wed 14-Mar-12 20:05:44

Also in our local authority we can only apply up to 6 hours to any one day pozzled, however some local authorities have decided on 10.

Our LA gives 6hrs for 1 day, 12.5 for 2 days and 15 for 3 days.

The pricing structure seems a bit wierd and I dont buy the not knowing how much they charge per hour story someone has obviously decided on the pricing structure and if you can figure it out by doing some simple deductions I am sure they can also. In saying that the guidance www.education.gov.uk/childrenandyoungpeople/earlylearningandchildcare/a0072533/code-of-practice-for-las-on-delivery-of-free-early-years-provision-for-three-and-four-year-olds
Just follow the link to guidance.
Clearly states that the FFE must be free at point of delivery so if a daily session is £45.00 and the session is 10hrs say 8am to 6pm then simple maths will conclude that the hourly rate is £4.50 so your child should get either 6hrs x £4.50, 12.5hrs x £4.50 or 15hrs x £4.50, also we are not able to charge for food as this can discriminate against families that may not be able to afford £2.50 extra for meals parents should have the option of sending a packed lunch, the whole point of the FFE is that it is free, universal and available to all who want to use it without additional costs.

If a child attended for 50hrs per week ie 5 full days and the cost works out at £225 per week the each week 15hrs x £4.50 would be deducted "at the point of delivery" the parent would simply pay the remaining 35hrs IYSWIM. It gets a bit more complicated if the parent chooses to stretch the entitlement over the full year rather than term time only, but not that complicated that the nursery provider would be unable to figure it out. I also find that some nurserys still charge a registration fee, if your child only accesses the FFE a registration fee is not allowed to be charged. Have a shufty at the guidance and see whether they are following the code.

OmarLittle Thu 15-Mar-12 08:34:42

Thank you so much for replying - it's very much appreciated. I'm not surprised that it's not the norm at other nurseries. It does seem to be taking the proverbial, and also blatantly profiteering from the government funding.

They are, apparently, going to give me a breakdown of their fee structure today. So, I'll check that out and go back to the Early Years Team at the LA.

Like you, Dribbleface, I am sympathetic to nurseries making a loss when they take funded children, and I've no wish to short change them. However, I can't help but feel angry that they're exploiting the governement funding in this way. In all other respects, they've been excellent, and it's such a shame that I have to contest this with them.

Massive thanks, atworknotworking for the code of practice link. I will check that out. Ideally I'd like to have some kind of argument about the legality of what they're doing, but I'm confused as to whether private nurseries have the right to charge whatever they please for non funded hours, or whether they are legally bound not to charge more than they charge for non-funded children. Presumably if they have a contract with the council which states they cannot charge more, then that is legally binding?

I'm also wondering whether I can contact Trading standards or something similar, as they don't advertise their 'higher rate' anywhere that I can see, and they didn't inform me before I enrolled my daughter. Or is that going too far?

Massive thanks again for your help.

OmarLittle Thu 15-Mar-12 08:36:28

Sorry forgot to say, atworknotworking - they do claim that the 12.5 hours are free at the point of delivery. It's just that the non-funded hours are charged at a much higher rate than a non-funded child would pay.

tomhoban Tue 25-Feb-14 20:48:22

We are having trouble with our nursery not charging the right amount, or at least I am unable to work out how they got to their figure.

What was the outcome omarLittle?

Thanks

Tom

Littlefish Wed 26-Feb-14 22:35:23

This is a very old thread Tom. You will get more answers if you start your own thread asking for help.

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