Nurseries and Freechildcard Allowances

(18 Posts)
wms77 Thu 11-Feb-16 18:29:17

I appreciate there are many threads on this, and up to know I thought I had a good understanding of this, however on looking at a

new nursery today, this pricing was very unclear until i dug a little deeper and asked for a breakdown. On the surface all they

currently report is day and half day rates so I wanted to understand the breakdown.

I would appreciate if you would let me know if you think the way the Free Childcare hours has been used is not only in the spirit of

the policy but also if this is even legal?

The example is as follows

Nursery fees lists
- £69 per day
- £47 per half day
- Calender month full time = £1,420
(this is a reduction on the daily rate which would be £69 x 5 (no of days) x 4 1/3 (no of weeks in calender month which comes to

£1,495, therefore a full time place gives you £75 per month saving).

However, when I enquired about the 15 hours per week in term time (or 570 hours per year, or 47.5 hours per calender month), they

said the monthly pricing would be reduced to £1,282 (a saving of only £138 over the fee above).
From calculations, this works out at a rate of only £2.90 per hour they are passing on to parents, even though I believe they are given £4.93 by the Government.

I have challenged this, and they came back with how they calculate it, which roughly is as follows, this was over the phone so do not have exact workings as yet
- as you get 15 hours a week, they provide you with 3 x 5 hours (so 3 x 1/2 days free per week)
- therefore, on a 5-day week they give you 3 mornings for free, meaning you only pay for 2 full days @ £69 per day
- however for the other 3 remaining 1/2 days, they now charge you the half day rate of £47 per half day
- they also split the sessions over three days, where as giving 2 free sessions on Monday and 1 on tuesday would mean a saving of

over £110 per month as shown below

Their model
- 2 full days x £69 = £138
- 3 half days x £47 = £141 (plus they 3 free 1/2 days equal the 5-day week)
= £279 per week (or £1208 per calender month, this is under the £1282 they quoted as you do not get the 15 hours every week, so they factor that in)

If they counted a monday as 2 sessions, and the third session of 5 hours on the Tuesday it would be work more in the parents favour as follows, you would then pay for
- 3 full days x £69 = £207
- 1 half days x £47 = £47
= £254 per week (or £1100 per calender month)

So, depending on how you allocated the days, and how they have manipulated the pricing, they are taking an extra £100 off you which

in my opinion was designed to save the parent money, not provide extra funds to the nursery.

One last example,

- if i just pay in cash, they cost is £1420 per month
- if i use the 15 hours entitlement, they get £1282 per month, plus 47.5 hours x £4.93 from Govt) = £1,516 per month

So they are profiting to the tun of almost £100 per month from a scheme which is meant to benefit parents., and not passing the savings on to the clients.

Any thoughts or comments?

insancerre Thu 11-Feb-16 20:16:02

The scheme was not designed to save parents money on the costs of childcare

It was designed to ensure every child had the best start to life and narrow the inequality gap

And the nursery can decide how they offer the funded hours

wms77 Thu 11-Feb-16 20:43:58

My understanding was that narrowing the equality gap and providing every child with access to these resources prior to starting full-time education was only one (of three) objectives of the scheme, with the other two being
- allowing parents to work additional hours to fulfill career/family aspirations
- the final was to help with families with the costs of childcare

so I do not entirely agree with your point.

The aim of the scheme was not to allow nurseries to manipulate their pricing models to profit at the costs of those who the scheme was looking to help.
I would of thought the minimum they should pass on the parents is what the Govt is subsidising, rather than keeping half of the Govt subsidy for their own pockets?

superram Thu 11-Feb-16 20:53:25

They get about £3.20 per hour from the government-nowhere near £4.93. If you don't top up they will either not take your child or stop offering the funded place-your call. I love my nursery and I like the discount-they would close if we didn't top up so worth it to me.

ceeveebee Thu 11-Feb-16 20:55:15

It's £3.72 where I live (and it was similar when we lived in London so I think it's a national rate). It's nowhere near enough for them to run a nursery - if they didn't make up the income somehow how do you suggest they stay open? They are not charities

Cuttheraisins Thu 11-Feb-16 21:04:10

For their own pockets? The scheme isn't working because nurseries receive less money per child if they offer free childcare places. I am a childminder and in short, if I was to offer funded places/hours I would have to work harder for significantly less money. That would take me below the minimum wage. And I would be paid in arrears by months I.e. Look after a child for about four months without being paid, then paid in a lump sum.

wms77 Thu 11-Feb-16 21:12:08

I am basing my calculations on a sign they had on their noticed board which stated

Hourly rate = £6.90
Govt Sub = £4.93
Gap = £1.97 per hour

So its their calculations rather than mine.

In terms of lining their own pockets, look at the numbers in original post. They will make a greater amount per month by using the govt subsidy rather than me paying directly without the subsidy, even if they receive just £3.93 per hours which others have mentioned as the correct number.

So they are not working harder for less, they are working the same amount for more - not sure how i can make that point any clearer.

Cuttheraisins Thu 11-Feb-16 21:32:30

Maybe they take into account the admin costs associated with the funded places which is significant. They may also be taking into account that on occasion they may lose money - I was treasurer for a pre school for some years and if a child would start with a funded place and leave half way through the term, the pre school had to refund the entire term's worth of fees therefore having looked after a child for free for one, two or three months.

Also i believe the scheme is designed mostly to offer free early years education, not free childcare. The 30 hours of free childcare is different and calculated if parents are entitled is lower income. I believe the nurseries model of charging it as blocks of half days comes from that initial offer of 15 hours of early years education.

Their model is complex and I think you are right to be questioning it, maybe your local authority could clarify? Or have you tried comparing it to other nurseries?

Somethingkindaooh Thu 11-Feb-16 21:42:16

Nursery manager here..

It is actually illegal to 'top up' NEF, what you actually need to do is work out the hourly rate.

So example..

You want your child to attend for 30 hours per week. 3 days a week for 10 hours each day..

Day rate is £69.. Hourly rate is £6.90

You will be paying for 15 hours per week which would be £103.50 per week.

It's that simple, unless you were going to 'stretch' your entitlement and then you would get 11 hours per week.

If a nursery is advertising their day rate to be X amount which = X hourly rate they cannot decide to increase those fees based on their government funding.

Nurseries / pre schools and childminders have every right to refuse funded children, they cannot however charge extra to top up

wms77 Thu 11-Feb-16 21:54:28

Thankyou.

The challenge is they are charging £69 for a 10 hour day, so as you say, £6.90 per hour.

However the 15 hours a week they provide is split into three 5 hour sessions in the week, meaning i have 2 full days at £6.90 per hour, but i am then left with 3 x 1/2 days to make the subsidised 1/2 days into full days.
Their rate for 1/2 days is £47 so £9.40 per hour so they basically charge an extra £2.50 per hour to offset a good proportion of the 15 hour subsidy, meaning very little is passed on to parents, even though we are in for the full day, they charge us half day rates.

Cuttheraisins Thu 11-Feb-16 22:08:19

Most nurseries and childminder will have an hourly rate, a half day rate and a full day rate, and many will offer a discount for full time place and for siblings. So for example I charge £55 a day for 10 hours but 6.50 an hour if a parent wants just a few hours in a day or wants over time, early morning late evening. It's common practice I think and part of the contractual terms.

Somethingkindaooh Thu 11-Feb-16 22:23:43

wms it's not a challenge.. It is illegal as it is topping up. You should ask your local council to confirm, but in my area we would be crucified at audit if found to be doing that

insancerre Fri 12-Feb-16 06:02:00

The half day rate is higher to offset their losses on selling only half a day.

HSMMaCM Fri 12-Feb-16 07:33:37

They don't have to offer two sessions in one day and they quote day and half day rates, so these should not be converted into hourly rates.

Ethelswith Fri 12-Feb-16 07:45:17

I've come across a nursery which did this, back in 2005, and it was sharp practice.

Basically, they were trying to apply the free hours across the monthly rate across the whole year, irrespective of child's attendance pattern and when they arrived/left their setting. They were rather counting on parents not noticing.

I did notice, insisted that as my DC had received the designated hours, all the refund should be passed on.

Reporting to the Under-8s department of your local council is the next step if you think the nursery is not using public funds correctly.

When I told the nursery that as there was no agreement between us on how the ELG scheme was intended to work, I would refer it to the council to adjudicate, they caved on the spot.

lanbro Fri 12-Feb-16 07:53:33

When I see these threads I realise my fantastic nursery is in the minority! Both my dc get 15 hours free. I have them in 2 days, 9-4, nothing else to pay. If we go on holiday in term time they let us use the hours in school holiday time.

If you don't like the way the nursery charges your only option is to use a different nursery. They are a business. I run my own business and nothing puts my back up more than customers thinking they get to decide my charges!

Ethelswith Fri 12-Feb-16 07:57:22

I am a taxpayer, and nothing puts my back up like people misusing public funding.

Nurseries can set their rates as they like. That's not the complaint I made.

They mustn't abuse public funds. That was what I took up.

Those which go in for sharp practice are (I hope) a tiny minority.

namechangedtoday15 Wed 17-Feb-16 16:27:25

I think you're barking up the wrong tree.

They publish a day rate and a half day rate, irrespective of funding. Its a standard commercial practice - part time / part day sessions are always more expensive than full time / full day places. If they don't have another child to full the other part of the day, then they lose money. Its obviously much better therefore to have children in full time.

There is absolutely nothing stopping a nursery saying it has to be used over 3 days (so 3 sessions). They're not asking for top-ups, or inflating the hourly rate, you're paying the standard price for the afternoon session following a "free" session.

You have no way of knowing why they specify it has to be over 3 days - yes, it makes financial sense for the nursery, but there could be a whole host of reasons as to why it works better for them.

You would be saving over £200 on the monthly rate paying in the way that they've outlined.

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