Could my DD's nursery be in financial trouble or preparing for a sale?

[MGMidget]

The management of my DD's nursery (part of a small chain) has started making 'policy' changes over the past few months. These have involved gradually amending the terms of the contract but in subtle ways. They send out a 'parent bulletin' advising that certain concessions/'favours' are being overused by parents (implying parents are taking advantage) and therefore 'effective immediately' they are stopping them. These have included a 15 minute 'leeway' at the end of the day (e.g. official finish time is 6.30 but parents are allowed a 15 minute 'leeway' so must pick up by 6.45 or they get fined. In addition, the nursery allowed parents the opportunity to swap days on an ad hoc basis by arrangement and payment of an admin fee. This is also now being stopped, although all these 'favours' were clearly stated as readily available in the contract. Add to this, the are now making even more changes, all increasingly detrimental to their customers (and most changes 'effective immediately' and they have sent a new contract asking parents to print it sign and return it (with even more new changes). They have also (apparently) made some detrimental changes to staff contracts and they have stopped the programme of activities for the children which involved outside providers coming in for music, exercise etc. Instead they say they have trained their own staff to do this. Having seen one of the staff in action doing a bit of this one morning it was rather uninspiring and I felt sorry for the staff member! She was singing rather untunefully to the children while encouraging them to sit in a circle and giving them musical instruments to bang/rattle. I'm sure the toddlers were perfectly happy with this and don't really need a talented performer but I can't help feeling this is another sign of the nursery cutting back. All this started around the time of the rise in the minimum wage.

I am now starting to wonder if the nursery may be in some financial trouble. It seems highly risky for them to make so many changes in such quick succession when they may alienate their customers and staff. I'm wondering if the owners may be getting desperate and these are last resort efforts to keep it financially viable? I checked the financial information registered at Companies House and it looks like the nursery chain made a profit in the most recent set of filed accounts although that relates to a period that ended over a year ago and the next accounts don't get filed until end of March. There are two 'sister companies' - a nanny agency and a catering company (presumably supplying the nursery food) and both of these are making a substantial loss at the moment.

So I am wondering if anyone else would think this nursery chain is in trouble or might they just be getting more 'business savvy'?

[SpotTheDuck]

I'd suspect they were in trouble TBH. Might be sensible to start looking at other childcare options just in case?

[MGMidget]

Thanks SpotTheDuck. Yes, I'm already thinking what to do. I was considering giving notice as this would take me up to Christmas. However, in my area, most nurseries have long waiting lists. It could just be that they know they have customers over a barrel as they can't just switch nurseries very easily and hence they can force contract changes to suit themselves without needing to worry what their customers think. On the other hand I'm wondering if I'm going to turn up one day and find the nursery shut for good, my deposit and a months advance fees gone forever and no childcare!

[HenryIX]

I suspect, as you say, they have had a massive rise I costs, with the NMW, national living wage and new pension rules. Also, the new 30 hour 'free' childcare is going to cost nurseries a huge amount of money. Almost all nurseries are struggling with this at the moment, and many are making losses.
I doubt your nursery is the only one making changes like this.

[HSMMaCM]

It could just be that their costs are rising drastically, due to rules outside their control, so they have to make cut backs. The 15 mins at the end of the day may simply be that parents were taking the mickey and always coming 15 mins late, so they are cutting that out.

[Dlah]

It's sounds like they're actually just trying to run a business!

I work within a nursery, the leeway for starters must cost them money - we'd have plenty take advantage of it, so unless it's costed in, it's not really a favour just draining money for those 15 mins when at least 2 members of staff need to be paid.

Same as the day swaps - we do, where we can, but sometimes we have to say no, as if we left spaces for this purpose it would hinder our ability to offer the spaces permanently to someone else. We also find some parents take the mickey, ie our policy is holidays/sickness must still be paid for - but they'd ring and not advise of these issues to get swaps instead so they didn't loose out. I'm under no disillusion nurseries are bloody expensive, but as a small nursery ourselves we've just got to protect ourselves or we'd have no nursery anyway.

I wouldn't panic too much, it genuinely sounds like they're just trying to be more 'business' like and stopping money leakages, as every penny really does count, especially as someone mentioned the funding hours etc, we have to make up the difference we loose from the low amount the council pay us.

Even down to staff doing outside activities - quite common, we paid £35 for a 30 min music & movement session, we had them in a few times but staff were quite happy to take this on and we just provided the resources, which was much more cost effective and allowed us to utilise the sessions more often

I think you're safe :)

[Karoleann]

Are any of these changes contractual?
If so, just don't accept them. We had a nursery that tried to do something similar and I just stated that I wasn't willing to accept these changes to my contract. They could of course given me notice, but I was willing to accept that chance.

[Racheyg]

It may be that the have a new management? My nursery have started to do things like this. I think it's more the company that own the nursery are clamping down on certain things.

[BackforGood]

I agree with Dlah Nothing you have said is anything different from the majority of Nurseries. If you are actually going to have a serious look at other Nurseries, I suspect you'll find the same rules apply there - particularly regarding the being late for pick up.

I suspect they are just looking at all costs as all Nurseries costs have gone up considerably in the same year and the choice is to either be more business like in their approach and to cut some 'luxuries' or to put the fees up by a considerable %. Which would you rather ?

[RandomMess]

I too think they are bringing their policies in line with the competition because financially they need to.

[MGMidget]

To answer a question raised, the changes are contractual. The day swaps and leeway at beginning and end of the day were in the contract. Indeed the leeway was proactively offered to me when I asked them about drop off and pick up times before I signed up. Also, since then I've been told on various occasions that I can drop off from 7.45 if I want (I have never done this but there are some other customers who do and who rely on this to get to work on time).

And yes, not many nurseries do this. I think though that there will be a proportion of customers who chose the nursery over other choices because of some of these terms and they are risking losing some customers. So, I suspect that either they have calculated the number of customers currently benefiting from the terms they are changing and have decided they can afford to lose some of them or they are getting desperate and taking risks.

[Lucked]

If the nursery does announce it is closing every child currently attending will be placed on one of the other waiting lists and it will be a nightmare. I would look at the other nurseries now and beat any rush.

My kids love the activities outsourced to companies and I would not be happy if they were all withdrawn.