To challenge the 22% price hike our nursery is trying thru?

[Blankiefan]

Email today re: impact of National Living Wage and other above inflationary cost increases forcing a fee increase. I'd accept a reasonable increase but 22% feels excessive.

In an unrelated admin blunder a couple of months ago, the nursery sent an email to all parents without bcc-info the addresses so we all have all of the email addresses. AIBU to consider contacting all parents to organise a rebellion? I've no idea what this would look like

Maybe really it's more of a wwyd... I'd really rather not move dd.

Unfortunately living wage plus the extra cost of providing work place pensions etc will mean a lot of things are going to go up, plus if they haven't put prices up for a couple of years anyway. Chances are they have had to take a serious look at costs and viability because of all the extra wage/ compliance/ pension cost the government are implementing and they realised that it was 22% or they may as well close! I had to do this and for me it was no longer worth trading so I just closed my business.

Sorry Katy

I do think it would be reasonable to ask for an update, but staff costs have risen sharply - not 22% it's true - but where I live, they are getting a lot of pressure to take the funded places, but the funded places don't anywhere near cover the costs. For nurseries to be viable as a business, they need to get the money in from somewhere.
As others have said, things that used to be provided by Local Authorities (such as training for first aid, food hygiene, safeguarding etc, etc) now has to be bought in in many cases. Funding that used to be available to give a bit of flexibility around support, additional support for dc with special needs etc., has all been cut too. However, the amounts they have to pay out are ever on the increase.
Without finding out how your Nursery costs compare with others near you, it's difficult to know how unreasonable this hike is - maybe this has prompted them to look into it and they've found that they've been undercharging for a while?
Obviously, that's really difficult for anyone who is paying the fees from their own tight budget to suddenly get notice of such an increase, but that's not to say it's an unfair charge they are proposing.

The nursery I use will be putting their prices up by 4p per hour next month which is just to cover the living wage increase. They have a small annual price hike every September to cover other running expenses.

22% seems a lot for the average working parent to suddenly stretch to.

Very often, price hikes are 'tied' to one feature that the policy makers feel people are less likely to argue with. I would guess that the NLW is a part of the rise but not the only part.

If it had been 10% last year and 10% this, would you be "ok" with that?

So sorry to hear that news Katy my Dd is a nursery nurse and I worry for her future in this industry. The nursery business is not a profitable one.

I really feel for you Katy I have some insight into this, in Scotland at least and I agree Nurseries are coming under ever increasing pressure ...
First National living wage plus Employers Ni - after the increase to NMW in Oct - its two pay rises in a year - 'its only 10%' -if your wage bill is £30k per year it is another £3k a year to find...
Then automatic enrolment. By 2018? I think it is all employees (Unless they opt out and that will be a nightmare) will have to contribute 5% of their wage to a pension and the employer 3% - low paid workers are going to get what amounts to a 5% pay cut in their pocket and the employer won't be able to compensate.
And training costs and minimum qualifications - to be the manager of a nursery or even preschool/playgroup in Scotland you now need to have or be working towards a specific degree. ..some teaching degrees wouldn't be good enough - how much would you expect to be paid an hour with a degree? (And for lots of preschool groups with part time workers it isn't financially worthwhile for someone to do the degree - they often only work 20 hrs or so a week - lots of groups are going under cos they can't find a manager...and it is only going to get worse).
Even with your highly trained manager you can't pad out your workforce with 'supervised helpers' - they need to be qualified to a certain level depending on their role too - which either the low paid employee or the employer pays for.
And increased admin costs ...there are more and more hoops to jump through - just keeping track of the changes is hard enough ...
Looking at auto-enrolment. In addition to paying the staff every month or whatever a declaration of pension payment will have to be made, for each staff member and then a separate payments transfer made to the pension company. Increase the wages work load by 20-25% easily.
To receive preschool funding (in our area at least) the council have pushed the responsibility onto Nurseries/groups. They will be responsible for checking eligibility, doing things like checking birth certificate/passport numbers, proof of address...then it all has to be entered into a database which will basically then be used throughout their school years. Once that is done then any changes to the hours/contact details need to be updated asap. And 'to prevent fraud' the parents need to be notified, accept/authorise payments which will involve multiple actions including entering codes into the database - for each child, 4 times a year...
The list is truly endless...
And our private council tax has been frozen for years ...so the council have been increasing the business rates to compensate. Just before he sold his business (not childcare related) 7 yeara ago now his business rates increased by 33% in a year and on top of that a 'small business' rebate (reduction) he had been eligible for had been discontinued. And at the same time the rubbish collection fees (paid for on top of rates) had gone up by 3%...

unlucky don't you just love the SNP?

carol What makes it worse is people thinking how wonderful they are...they have screwed up education, the police, the NHS..basically anything they have been responsible for...yep love them!

You think things are any better in England?

they can charge what they like and have no need to justify their prices to you.

its either pay up or find a new place

Nurseries are being hit in all ways, they are having to put up wages, pay pensions, compulsory courses that used to be paid by the LA are now charged at high rates, rents on the buildings have gone up massively in some areas while 'free hours' funding has frozen or dropped. If the funded hours aren't going up then the percentage increase in the extra hours has to make up for it or they will go under.

Our nursery also had a pay increase in line with living costs but it was 3% not 22%!!

I would not be happy and would look and loving nurseries.

😂 at the 23.04 post

thyme no I don't ...but then you don't get people in Scotland saying they wish they could vote for an English party because they are a real alternative and would do a fantastic job... blah blah blah...when it is all smoke and mirrors...
One good eg the announcement of increased funding for 3yr olds to 600hrs a year ... great! Except that works out at 15hr 50min a week ...an increase from 12.5 hrs and slightly more than the 15hrs people in England had been getting for years (and the 600 hrs really is a completely stupid figure - it works out at 3.1758 hrs or 3hrs 9.47 mins per day...)
I could rant but I'll stop ...but believe me they are useless...

Nursery costs may indeed be rising, but it is extremely bad business management to foist a sudden 22% rise on your customers. Rising costs wouldn't have been unforeseen.

In any other sector, where your customers were less dependent and freer to shop around, you'd rapidly lose a lot of custom pulling that one.

Do they have a lot of apprentices? I think employers are now having to pay them instead of the government so that will have an impact too.

Our nursery is increasing fees for the same reason, but the percentage increase is way lower than 22%. Though it's a pretty expensive nursery to begin with.

Ours hiked 15% in january this year. In past three years they have added £1 per hour each year.

I wrote a letter to owner - it's a chain as an increase of £8 an hour over the last three years is madness. I voted with my feet and moved daycare.

Even more ridiculous when found out owner isn't increasing room leaders wages so they will only be earning 10p more an hour then normal nursery nurse

The nursery sector is screwed. The 15 "free" hours with funding set at less than it costs to provide and no top ups mean there is a cap on income. That will get worse when the 30 hours "free" comes in. Add to that the new minimum/living wage forcing more money being paid out...

Ironically, the "free" hours for less well off parents will make the bottom end of the sector collapse leaving the lower paid with no childcare. Exactly the opposite of what was intended.

Screwed I tell you.

Ironically, the "free" hours for less well off parents will make the bottom end of the sector collapse leaving the lower paid with no childcare. Exactly the opposite of what was intended. exactly Tiggy

& I charge £5 an hour & get paid £3.30 plus a 61p bonus because I have a degree & I'm open 8-6....so I lose £1.09 an hour for 15 hrs - about £600 a year per child

There is a rumour that the second 15 hours will be paid at half that!!

the hours will be paid at 4.88 (from 2017), staffing ratio is 1:8, so £39 income per employee. Staffing costs are 65-85% of a nursery costs, so at £10/hour for staff (inc hols etc) making 70% of costs, other costs are 4.28 - total costs are £14.28.
Nursery therefore breaks even with 3 children and makes a profit of about £24/hour with 8 children (per head of staff) - looks easily profitable to me.

Stepping stones (a childcare charity) made a surplus of £29k on £362k of income, so 8% net margin - which is more profitable than Tesco

Do they have rent to pay, carol?