Nursery charging top up fees

[Squidrings]

I just got my nursery invoice for my DS. 3 years old and 30 hours funded. Normally the bill is quite small, just charged for meals as the funding covers all of his hours.

The bill is a lot more than usual and they have written a note to say that 'due to a shortfall in funding from the council this year, they have added an admin fee to bring the funding in line with their hourly rate'.

I totally see their point of view, nursery funding is crap and should be raised. However...

1. This came out of the blue and is a lot of money that we haven't budgeted for... surely they should have given us notice that this was going to happen, especially as it sounds like this is going to be an ongoing thing.

1. After some research I have seen that the guidance says that childcare providers are not allowed to charge top up fees to make up the difference between the funding and their hourly rate.

I'm not sure what to do, does anybody know anything about funding? Is there a loophole that allows them to do this? The wording definitely states that this is what the fee is for rather than 'extras' such as food or outings.

I just feel as though the 30 free hours are no longer free, I don't want to have to change nursery as I am happy with everything else they do.

So aibu to question this with the nursery?

Yes I’d definitely question it, armed with evidence incase they dispute what they can and can’t do.

You can question it and yes they should have consulted with parents first but if they’re not getting enough money to cover their costs how will they survive?
If no one pays You run the very real risk of the nursery going under and have nowhere to send your child.

Yes, I get this, and this is why I am hesitating. My child has been at this nursery since they were a baby and I would be gutted if anything meant they had to change.

However

I have another baby ds at the nursery and pay full fees for them. When I went back to work after mat leave our decisions on days etc were based on my eldest having free hours. This is our current entitlement and I feel a bit aggrieved having to pay more than I should.

A one off charge I wouldn't mind at all and through covid we opted to continue to pay full fees, even though we were given the option to pay nothing or a % of usual fees because we wanted the nursery to be able to stay open.

Hi op, I'm a childminder who offers funded hours. Currently our borough only pay around 75-80% of a typical hourly rate. The funded hours are literally for the hours only so I charge extra daily for food, drinks, nappies, wipes, days/trips out, etc to bring it up to my normal daily rate. Also funding is term time only so I charge for any additional hours needed above the funded amount. It wouldn't be sustainable for me to have funded hours without a top up from the parent unfortunately.
However the fact the nursery have suddenly put up their fees without talking to you first and giving you notice of a fee increase is terrible. I would never change or put up my fees to parents without at least 3 month's notice.

After some research I have seen that the guidance says that childcare providers are not allowed to charge top up fees to make up the difference between the funding and their hourly rate.

Eh? Really? Do you have a link to that? My nursery definitely charges extra on top of the funded hours... I currently spend £2600 a month on childcare (even with the 30 hours 'free') for my boys, and would love to bring that cost down further!

My nursery charged for a lunch hour coverage and lunch itself so £18 a day to top up its funded hours. They're not fully "free" hours.

I would be very wary of where it will end up if nursery decides to stop taking funded hours children.

The funding doesn't cover snacks / materials etc as I understand it, so I would expect that to be charged on top.

You may also well discover that the fees for your non funded child shoot up to even out the funded children if they stop charging a consumable charge.

www.pacey.org.uk/working-in-childcare/spotlight-on/30-hours-funding/information-for-practitioners/

Legally they're not allowed to charge 'top up fees' they are allowed to charge for optional extras such as meals and resources but it must be phrased as such. Also bare in mind that nurseries are running at such a tight budget tho they might not be able to sustain if parents don't pay these fees so that's worth considering if you do decide to query it

Yes, they are allowed to charge for ‘consumables’ at whatever rate they want. The funded hours are enough to fund childcare provision. Sadly most childcare settings are inefficiently managed financially. They are also private businesses that run at profit.

Yes, this is what I am wary of. I keep going back and forth as I understand the nursery perspective 100% but I am also having to balance my money quite carefully with the rise in cost of living (as everyone is) and this unexpected extra charge was a surprise!

It sounds like they are desperate and hoping parents complain to the council about their inadequate allocation of funding.

It's a shame that the government has parents believe they are so wonderful that they give you 30 hours of free childcare every week.

The true fact is they pay diabolical rates for this care and then has the audacity to ban those settings from charging the difference.

I'm a childminder who offers funding, I'm not prepared to find that out of my own pocket, I just can't afford to pay for part of your child's fees which is what I would effectively be doing. Luckily the parents I have agree with me..

No issue at all with paying extra for consumables/days out etc. That already happens and I am happy with that. Both boys are term time only so no additional hours to pay for.

I’d just write back and tell them that contract law doesn’t allow them to unilaterally change their fees with no notice. Plus you’re aware that top/up fees are not allowed.
but, that you’d be willing to come to an agreement as you’re happy with the nursery, but that you need to be consulted first.

bloody cheeky nursery!

Go ahead and question it. They will likely go bust.

Most councils pay about £4.50/h for the funded hours, even in very expensive areas where the cost of provision is more like £6/h.

Those rates have not been uprated for inflation - increased energy costs, rising staff costs, food costs, resources etc.

People need to stop viewing it as "free hours". They are funded hours. The government doesn't pay the full cost, its a subsidy and you need to pay the rest or nursery providers will simply cease to operate.

Genuine question, when you pay fees to private nurseries, where does all the money go? My kids have finished now, but it was £50 per day, there were lots of kids and yes, lots of staff but they are very poorly paid especially for the amount of responsibility they have. I understand there will be other overheads like energy costs etc and the £50 did include food but not nappies. I don’t think I’d have minded so much if the staff looking after my kids were getting paid well but I don’t think they were at all.

They definitely should have given you notice. That's outrageous!

But the top-up fee is normal, it just can't be called a top-up fee, it has to have some other name, but as you've said, it's blindingly obvious why this is the case isn't it? If the council is only paying them £3 an hour for your child, but their normal rate is £5, they're actually funding your child's childcare at £2 an hour! That's clearly ridiculous isn't it? A private business paying £2 an hour to look after your child!! I don't think so! If anything, you've been lucky that this hasn't been the case up until now.

Talk to nursery but you find most do this as they can't survive on 'free hours'. Eg You taking a place of a child who pay so you pay for the time nursery open excluding the core times eg 9-11 and 1-3 . That's one example. Nurseries are closing sadly judging by the selling pages.

Should have gave you notice regardless

@Partyatno10
*
I charge extra daily for food, drinks, nappies, wipes, days/trips out, etc to bring it up to my normal daily rate.*

Aside from the day trip but what if the parent is supplying everything on your list above though? Surely you then can't claim a "top up" and can't imagine you go on a day/trip out for which there is an entry fee every day?

Nurseries are closing left, right and centre round here-it sounds like yours is trying to avoid closing, but if people refuse to pay, they will close anyway.

Can you look further afield and see what other providers are local to you?

Insurance, rent for premises, maintenance, heating, admin staff... I am amazed any nursery can make a profit tbh.

The funded hours are enough to fund childcare provision. Sadly most childcare settings are inefficiently managed financially. They are also private businesses that run at profit.

This is not always true. Ive worked with a non profit (reg charity) one recently in the an affluent/high cost area. Budget is managed well & for years they have managed to not requestups - enough parents understand the situation and choose to donate.

Not this year. Every single cost has risen. The budget deficit is catastrophic. Its likely the setting will fold within 12 months.

No they can't change their fees with no notice like this, but if you refuse, they'll likely put them up as soon as they can, and find a way to legitimately charge the top up. My attitude would depend on their set up. If they're a small operation who will obviously be struggling to cover their costs atm, I'd probably just pay it as long as their fees were still competitive. But if they're part of a big chain, where the owners are obviously doing very well off the back of lots of other people's hard work, I'd be less forgiving. It all depends what else is available to you really, could you get a place somewhere else that's cheaper?