Nursery have used funded hours to repay furlough money

[KittyKat1983]

Hi, just after a bit of advice if anyone knows where I stand with this. My DD was due back at nursery next week as I am going back to work. She gets 30 hours funded by the government which I have been renewing all through lockdown and she hasn’t attended since March. The nursery are now saying we will have to pay for her place as they have used the funded hours to repay the furlough money they claimed off the government. Does anyone know if they can actually do this? It’s left me stuck because I can’t afford to pay the full rate so won’t be able to return to work. Thanks in advance.

@Tiggytigert

Also as PP have stated. You don't get to choose your 30hrs funding. These are only in term time and between 9-3 unless your nursery has set stretched hours and continues in the half terms. It's now the summer which means yes, you will have to pay.

That’s not true. Different nurseries have totally different policies and hours. My DC’s one will allow 8-6 three days a week in term time or will allow 21ish hours stretched over the year including the summer (although they specify odd hours like 8-12 and 16:00-19:30 etc to make people pay for the hours in between)

This is, as others have said, due to the government not being clear around the furlough arrangements. When furlough was announced on March 20, a lot of nurseries, like other employers, assumed they would be covered.

However, some three weeks after Furlough had begun, the Govt announced that companies that already paid their staff through government funds (like nurseries paying staff using the funded hours) could not claim Furlough. Many will have already done so, so need to pay the money back, and they will need to (and are entitled to) use the 30 hours funding to do so. Not doing so would involve the Government essentially paying the salary twice.

The problem lies with the communication with the parents. Essentially, the arrangement you have with them to use the hours continued whilst on lockdown; the funded hours continued to be paid, you just couldn't use them, unfortunately.

The issue you specifically now have is that because you normally "spread" them over the year, there are no more hours left for you to use, as the nursery was entitled to use the maximum 30 hours a month during lockdown. This is because that is how the Government pay them - the nursery allow you to spread them, but that's really just an accounting issue. They don't have to offer to spread the hours.

It's unfortunate, and I suspect no-one in Govt thought about the impact on those who normally spread their hours over 52 rather than 38 weeks.

How did they spend two lots of income? They've had the Govt childcare funding AND the furlough - that's duplication. No wonder they've had to repay the furlough. Their expenses wouldn't have doubled. Sounds like they just spent/pocketed the extra and are now struggling to pay it back.

@lyralalala

Given the headache this will cause nurseries it may mean the end of the goodwill of averaged hours.

Especially as a lot of people don't understand how the funding works and don't realise there iis actually only funding 38 weeks of the year. The nurseries just average the bill out.

I agree. The problem is, in essence spreading the hours means that the parent overpays in June but underpays in August. That's fine if both happen. What's happened here is that the parent paid nothing in June (I assume - OP hasn't mentioned retainer fees) but wants to keep the underpayment in August. Looked at like that I still feel sorry for OP but I can't see how anyone feels the nursery is being unreasonable?

@Badbadbunny

How did they spend two lots of income? They've had the Govt childcare funding AND the furlough - that's duplication. No wonder they've had to repay the furlough. Their expenses wouldn't have doubled. Sounds like they just spent/pocketed the extra and are now struggling to pay it back.

Have you read any of the thread?

Nurseries claimed furlough because they were told they were allowed. They were then told weeks after that that they couldn't so had to pay it back.

There's nothing fraudulent on the nurseries part here. There are a lot of nurseries in the same boat because of the govt cock up.

OP, does your DD only attend for the equivalent of 30 hours per week during term time (even if stretched over the year)? Or does she attend more hours and do you pay for those? In the first scenario, I'm not sure what to advise. In the second scenario, did you continue paying for her private hours when she wasn't attending? If not, then the money you saved there should cover the fees that are now due.

I also feel sorry for nurseries given that, going by this thread, almost no one knows what a crap position they were put in.

@Hardbackwriter I agree. The problem is, in essence spreading the hours means that the parent overpays in June but underpays in August. That's fine if both happen. What's happened here is that the parent paid nothing in June (I assume - OP hasn't mentioned retainer fees) but wants to keep the underpayment in August. Looked at like that I still feel sorry for OP but I can't see how anyone feels the nursery is being unreasonable?

The nursery really aren't. I don't think it's always clear to parents who don't know the ins and outs of termly funding that their bills are averaged, rather than there being funding every single week.

I feel sorry for the parents and nurseries. Nurseries are going to cop all the flak over this, plus they are going to lose places when parents simply can't afford to pay more than expected. I think some will go under because of this.

@lyralalala
There are funded hours in the holidays
The nursery can either deliver 30 hours for 38 weeks or 22 hours for 52 weeks
It’s called stretching and means a child can attend all year round

I don’t think anyone is suggesting nurseries should “take the flack” but ultimately this issue is between nurseries and their client and then nurseries and the gov separately. Whatever the stance on fees, this should be made clear to parents and their ability to change their existing agreements with parents in whatever way they have decided be clearly set out in policy.

Any issue with furlough etc is entirely separate as far as parents are concerned, who do not have access to the nurseries accounting system. Parents should not be bridging a gap without really understanding why.

I belive the government are trying to claim the money back, however, my understanding is that they are asking the insurance companies to pay it, not the nurseries themselves. Of course, this may mean that the nurseries have to claim it themselves from their insurance companies then pass it on to the government once they've received it from the insurance companies.

Do you have the agreement that the nursery would stretch the hours for you over the course of the year in writing, even if it’s an email or text? If so, and there is no clear resolution, pop this over on Legal Matters. I’m not UK trained, but it’s unlikely that they would be able to break that agreement as it doesn’t meet the parameters of a force majeure based voidance. The likely outcome will be that your daughter goes back and they receive the cost of top up hours you had planned for (if any). It’s a difference in accounting, and ultimately their responsibility to manage their finances.

I’d be surprised if it’s just you who is impacted, I wonder if they have done this to other parents? Might be worth discretely finding out, as a group is always going to have more power. Make sure you don’t agree or imply you won’t send your daughter, as that gives them a way to take the place back - you want it to be clear that if they do that, it’s because of their failure to abide by contract, as them you may get compensation for emergency childcare.

I’d contact your local authority and ask for clarification about whether you can use your funded hours going forward. They manage this. I’d be surprised if you couldn’t use this going forwards, but not surprised if it can’t be backdated.

I will also add to what some have implied - the money from funding will most certainly not cover all staff wages. It’s a disturbingly low amount. It’s certainly not 80%!

The loss many nurseries will have made will be horrific. I’m not saying what OPs nursery have done is right, of course it’s not, it will leave many parents in an impossible situation. But ultimately the government have screwed them over and, like with everything else in this pandemic, lined everything up to point the blame away from them and put nurseries in the firing line.

OP I missed your point about only having a few weeks left! I’m assuming you can’t pull your child out earlier because of notice period? I would contact them, don’t go in all guns blazing, and try and make a compromise. We have a case of double stitch up here.

My old nursery, who I am still in touch with, have withdrawn from the 30 hours scheme from this September. It was already hard enough and now they can’t afford it. I think many should brace themselves for the scheme being pulled.

I'm a chilminder in Scotland who provides government funded hours, stretched through 49 weeks of the year.
The funding belongs to the child and can only be used by the child.
Childminders were still receiving the government funded hours during lockdown, this helped keep a lot of Childminders businesses viable, i dont think the nursery can then ask you to pay just because they have spent all the government funded money, they've been paid for your childs space, how they chose to use the funds is their problem, not yours!

@Hardbackwriter

I also feel sorry for nurseries given that, going by this thread, almost no one knows what a crap position they were put in.

I agree. As if the nurseries are on the take all the time. Such a shitty way to think about the people you trust to look after your kids for the majority of their early years.

@Justkeeepsmiling

I belive the government are trying to claim the money back, however, my understanding is that they are asking the insurance companies to pay it, not the nurseries themselves. Of course, this may mean that the nurseries have to claim it themselves from their insurance companies then pass it on to the government once they've received it from the insurance companies.

Business interruption claims are being declined because the majority of insurers don't cover pandemics. The lack of BI cover is going to kill businesses.

How they have spent their money in the lockdown is down to them, they contracted your funded hours to be spread so fine that they used the hours during the lockdown but they owe you the hours for the summer, how they arrange that financially should not be your problem.

I remember the utter panic and horror when nurseries were told, with just a few days notice, that the Government had changed its mind and they were now expected to use the funding in place of furloughing staff - almost a month after many of them had followed the advice to furlough and close.

This is emphatically not the nursery's fault. Childcare, and its survival, has been way down the list of Government priorities.

To quote Caroline Nokes:
"“I just get crosser and crosser the longer time goes on, that this is a recovery designed by men, for men, and it’s not giving the answers families need.”
https://www.theguardian.com/politics/2020/jul/19/keir-starmer-accuses-pm-of-placing-parents-in-impossible-position

I'm really struggling to understand how nurseries are finding it so hard.

They are allowed to furlough staff with a wage bill up to the value of their private income. They still receive the funding from the government, which is then used to pay the remaining staff.

If a nursery has an income 70% private fees and 30% funded fees, then they are allowed to furlough staff to the value of that 70%. Then pay the remaining staff with the 30% funded from the government. Unless they have a ridiculously high wage bill, that should have covered their remaining wages, since the private and funded fees together would pay for wages, insurance, premises, consumables etc.

I really dont understand how furmoughing staff up to the value of their private income, and then using the funded money haant been enough.

Of course when they need to top up the furlough payments, the will leave them in the shit.

But up to that point, there have been loans available and part use of the furlough scheme. They'll he struggling, but I dont know how they've ended up so stretched. Unless I've got it totally wrong.

@BobbieDraper

I'm really struggling to understand how nurseries are finding it so hard.

They are allowed to furlough staff with a wage bill up to the value of their private income. They still receive the funding from the government, which is then used to pay the remaining staff.

If a nursery has an income 70% private fees and 30% funded fees, then they are allowed to furlough staff to the value of that 70%. Then pay the remaining staff with the 30% funded from the government. Unless they have a ridiculously high wage bill, that should have covered their remaining wages, since the private and funded fees together would pay for wages, insurance, premises, consumables etc.

I really dont understand how furmoughing staff up to the value of their private income, and then using the funded money haant been enough.

That's exactly what they are doing. They are using the funded hours.

It's just that they normally let the OP average out the hours so she gets a lower bill in the summer, but they can't do that because the hours have been used up (financially).

@BobbieDraper

I'm really struggling to understand how nurseries are finding it so hard.

They are allowed to furlough staff with a wage bill up to the value of their private income. They still receive the funding from the government, which is then used to pay the remaining staff.

If a nursery has an income 70% private fees and 30% funded fees, then they are allowed to furlough staff to the value of that 70%. Then pay the remaining staff with the 30% funded from the government. Unless they have a ridiculously high wage bill, that should have covered their remaining wages, since the private and funded fees together would pay for wages, insurance, premises, consumables etc.

I really dont understand how furmoughing staff up to the value of their private income, and then using the funded money haant been enough.

Lots and lots of parents didn't want to pay whilst their kids weren't there so there was no private income.

This is not right. You need to go back to them and insist you have the hours already agreed on your parent agreement form which you should have signed at the beginning. The nursery has received funding for all the hours on this parent agreement form even when not attending. You can’t get back any of the hours you haven’t taken during this time but you can get the hours you would normally have been expecting. If you get nowhere contact the Early Years childcare and free entitlement at your local authority - google early years and your local authority and you should find a number.

I would change nursery personally. You are entitled to use your 30 free hours. They cannot use it to pay their staff, that is ridiculous