10% discount for Nursery worker's own children?

[Whose]

I'm opening a day nursery and approaching the recruitment stage. Word is out locally, but nothing official has begun.

A local lady has said she'd be interested and asked if there would be a free place given for her child, or at least a discount.

Profit margins are really tight and the childcare ratios lean, especially for Under 2s (3:1) which is the majority of the current demand.

A lot of the local staff available will have their own young children. I'm anticipating needing 6 members of staff initially, I wouldn't be surprised if all of them had their own children... meaning that I could be looking at 6 staff with 6 kids, leaving only space for 12 full paying places.

Would I be unreasonable to limit the discount to 10% for under 2s, and perhaps 15% 2 to 3 year old, 20% over 3s?
Or is that super mean?
Google shows a huge range.

If anyone has direct experience please let me know!

Perhaps look at other incentives like generous annual leave if that works out cheaper?

@AmanitaRubescens - I don’t know that they do make that much money, but I suppose if you own 200 nurseries and they all make £25,000 a year, it adds up.

They own their own buildings as well, which obviously saves them a lot of money. And they are probably claiming back the VAT by some other means. Bright Horizons runs an emergency childcare scheme, which operates like a babysitting agency effectively. Nurseries register with the scheme and Bright Horizons send clients looking for emergency childcare to whichever nursery has a place. There’s probably some loophole which enables them to be VAT registered for that part of the business, enabling them to use a VAT number to claim back the 20% on purchases.

I don’t know this for sure - it’s just a guess.

The local authorities keep a huge chunk of the EY Funding in return for ‘administering’ the scheme. If the government was serious about supporting the childcare industry, that’s where they could start - by cutting out the middle man - because the Early Years department’s of the local authorities provide no support whatsoever to nurseries, and in fact do more harm than good, encouraging parents not to pay for meals, etc. The government should pay the funding directly to the providers. If they did, it would increase a nursery’s revenue by 20%. Then if they abolished business rates for private nurseries and allowed them to claim VAT relief (as local authority nurseries can, of course), it would add another 20%. THAT would save the childcare industry, but they obviously don’t want to do it or they would.

Economies of scale help the big companies make more profits as well.

It’s cheaper per portion of food to buy thousands than it is a couple of hundred.

All those wee bits help.

[quote EYProvider]@AmanitaRubescens - I don’t know that they do make that much money, but I suppose if you own 200 nurseries and they all make £25,000 a year, it adds up.

They own their own buildings as well, which obviously saves them a lot of money. And they are probably claiming back the VAT by some other means. Bright Horizons runs an emergency childcare scheme, which operates like a babysitting agency effectively. Nurseries register with the scheme and Bright Horizons send clients looking for emergency childcare to whichever nursery has a place. There’s probably some loophole which enables them to be VAT registered for that part of the business, enabling them to use a VAT number to claim back the 20% on purchases.

I don’t know this for sure - it’s just a guess.

The local authorities keep a huge chunk of the EY Funding in return for ‘administering’ the scheme. If the government was serious about supporting the childcare industry, that’s where they could start - by cutting out the middle man - because the Early Years department’s of the local authorities provide no support whatsoever to nurseries, and in fact do more harm than good, encouraging parents not to pay for meals, etc. The government should pay the funding directly to the providers. If they did, it would increase a nursery’s revenue by 20%. Then if they abolished business rates for private nurseries and allowed them to claim VAT relief (as local authority nurseries can, of course), it would add another 20%. THAT would save the childcare industry, but they obviously don’t want to do it or they would.[/quote]
@EYProvider

Do you feel that the government actually want nurseries to close down and all children over 2 to be cared for in schools?

@Freddiefox - I’m really not sure. In the part of London I’m in, the local authority struggles to fill the nursery places in schools, so it’s possible.

ICYMI: Mumsnet recently petitioned the government to carry out an independent review of early years funding (along with numerous other companies). Lots of MPs debated* it and the result was that the Petitions Committee have recommended the review goes ahead.

*Wasn't really a debate, almost seemed unanimous that the sector funding was a shitshow, with one or two odd Tory MPs trying to defend it.

Assume most of you saw it, but thought I'd mention if not.