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?

Consumables such as paint, paper, craft items, toilet rolls etc.......

Most nursery's charge a consumables, lunch hour charge etc.... which is a top up in all but name! Out childcare used to charge £1 an hour consumables fee, but we all knew it was a "top up" to cover the difference in funding rates.

Some childcare do it so funded hours are 9-12 and 1-4 every day so you have to pay for lunch, after 4 and before 9 and the charge they have for the other hours will top up the rate from funding.

Its not a new thing at all.

Thanks everyone, every thought that has been typed here has echoed my own.. on both sides of the argument 😅

I think I will tell them that I could have done with some notice but leave it there for now and watch how it affects my finances.
If it comes down to paying a top up fee or finding a new nursery I would rather pay the fee tbh and I don't want to ruin my relationship with them by questioning it. My boys are happy there, and that is the main thing!

No they can't charge a top up fee. However they can charge for consumables such as outings, activities, nappies etc. They can also ask for a voluntary contribution towards the cost of providing the care as often the funding rate does not cover the complete cost but this does have to be voluntary. I would ask for a cost breakdown to see what the top fee is for. They should however have given you prior warning of a change in fees. Most contracts have a notice time frame for changes in conditions. Perhaps see what is in yours.

Where do you get that from? Do
You work in the industry? The nursery management groups are full of managers struggling to make ends meet. It's a real thing, it's not just some of them it's most of them

You can definitely question it as they should have given you notice but I would find a way to pay it if you can.
My kids nursery went into insolvency 4 months ago (with 12 hours notice of closure) and I've only just last week managed to get them both started at a new one. All the nurseries around us are more or less full so I've had to accept what hours I can find for two kids at the same nursery ( a few nurseries had space for one but not the other) so I've have to change my work hours. This new nursery charges for a lot of extras but I don't have any choice - it's this or I have to give up work for the next year or so.

Private day nurseries make a very healthy profit for their owners if they're run properly. Best to judge what kind of setting it is and how squeezed they might be before you go back to them. Take a look on Companies House and see how they're doing.

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.

Often the headline rate for 1-3 year olds is subsidising the government underfunding of hours for 3-5 year olds & low income 2 year olds also eligible for funded hours.

Costs include:

• premises rent or mortgage
• insurance
• training
• safety measures
• electricity/gas/water
• ancillary staff like cleaners, cooks, repairs/maintenance contractors
• toys/equipment (these don't last the way they do at home due to heavy usage).
• paying an accountant and or admin staff who deal with financials eg working out fee rates, claiming funding, preparing acounts, onboarding new joiners, communicating with parents, dealing with ofsted and regulatory paperwork, employment contracts, grant applications
• a manager who may not be included in ratios of staff actually in the room with children who is: planning the provision curriculum wise, planning staff rotas, recruiting new staff, coordinating training, doing performance management (required by oftsed), liaising with local schools, health visitors, social services, applying for grants eg for high need block funding for children with additional needs, supporting families applying for EHCPs etc.

The government doesn't promote childminders enough. Childminding is actually a more sustainable model, as its a much lower cost base through using a family home as a setting. Smaller settings are also much less complex mitigating the need for extra finance/admin/management staff, meanwhile the childminder usually earns as much as double what an employed nursery nurse does.

I would refuse to pay on grounds of notice. If you are prepared to pay and have sufficient funds I'd agree to the uplift in 30 days time or whatever your standard contract notice period is.

If it's an over subscribed nursery then it's quite possible they will give you notice.

If you can't afford it, you can fall back on the rules but will probably just get a whacking bill for extras anyway. So you may need to make a difficult choice to cut hours and juggle more.

Private day nurseries make a very healthy profit for their owners if they're run properly

Tbf, bigger chains can. But how they achieve it isn't what i would call being "run properly".

They often rely on high proportions of very young staff eg aged 17 who can be be paid quite a bit less than full minimum wage, will run extremely tight ratios and thus often resort to making excuses to send well children home to manage numbers if there's a staffing shortage as they have NO head room. They will typically have high staff turnover as they are paying too little to retain experienced staff.

They can save money by bulk buying resources, centralising finance, management and admin to reduce costs etc.

Many charge very high fees and have session structures that make it extremely difficult to use only funded hours without paying for extra hours at a premium. Most cross subsidise funded hours by charging high hourly rates to younger children.

Many limit how many funded hours can be claimed, lots will resist taking children with additional needs who can be costly to accomodate.

Building rent, energy costs, maintenance and upgrading equipment / grounds, non ratio'd staff - that sort of think I would expect

I’m new to all this. So I’m aware that the nursery doesn’t receive enough from the funded hours and accept the extra charges for food etc but what I find difficult is that they are wanting to charge substantially more for the extra hours we need. The usual nursery day for 10 hours is £85 ie. £8.50 per hour if you are paying full fees. Extra hours would usually be charged at £10p/h. However the nursery is charging £11.95 per extra hour if you have the 30 hour entitlement. So over the course of the year (they do 48 weeks) there won’t actually be much difference in what I pay - they are still charging £980 per month.
I didn’t think they could do this? I would be happy to even pay the £10 per hour as they seem to be a good nursery(we have only recently moved to the area and started using them). What do people think?

They are actually not allowed to have mandatory top-fees (it must be voluntary) and if challenged may have to repay all those 'top-up' fees so I would mention it.
www.nurseryworld.co.uk/features/article/guide-to-charging-for-extras-feel-free

sorry I meant this to be the link
www.nurseryworld.co.uk/news/article/local-government-watchdog-warns-nurseries-over-top-up-fees-for-free-entitlement

I'm a treasurer at a preschool that works as a charity and of course we'd like the extra funding and are being squeezed like the rest of them. We've had to resort to upping our non-funded rates substantially and have included an optional top-up fee for funded hours as we appreciate that some parents can afford a little extra while others can't.

And addition we have always given warning of any price increases or policy changes to give parents warning, so having this sprung on parents doesn't seem like very good practice!

They are not allowed to charge top up fees all they can charge for are extras such as meals, snacks, nappies, specialist lessons etc .

You could contact the early years team at your local authority and ask them to investigate.

They definitely should have given you notice. However, I think most nurseries add fees on top of funded hours somehow. Ours only has funded sessions between 9 and 12 & 1 and 4, so if you want a full day you have to pay 8-9, 12-1 and 4-6 basically. There's no nurseries in my area where you can actually have your child go for a whole day and not pay anything. It's understandable and they are upfront so I don't mind.

Mine charges top up fees but they have an explanation so it isn't officially top up fees. It's things like only 7 hours of the day are funded hours the rest we have to pay for, paying for 3 meals too. So it still costs me £36 on a funded day. There are some nearby that charge very little extra but I liked this nursery more. DD starting school in September. I'm currently pregnant I think for cost of living reasons this baby will have to go somewhere cheaper unfortunately

Ours want over £50 a day after the funding 🙄

How much is that an hour?

Not sure but they want £680 per month for 3 days with 30hrs funding.

How much is the day fee usually? If you're doing an 8 hour day, the nursery may only be receiving £30-something...

The government and their stupid vote grabbing schemes have a lot to answer for! I’m a childminder and finding is paid £2.50 an hour less than my usual hourly rate. Without the voluntary contributions I just wouldn’t be able to offer funding. I would be essentially topping up peoples childcare so I could look after their children.

settings, which include nurseries, preschools and childminders etc are closing their doors left right and centre. We have fought and fought to have changes brought in, even to just call the hours ‘funded childcare’ rather than ‘free childcare’ but nothing ever changes. They simply say they will offer more training but even then not everyone is eligible for it.

I’ve always said a voucher scheme would work better. To give parents and carers a voucher than can only be redeemed by a setting. A voucher that says ‘Here’s X amount towards childcare costs but anything after that amount needs to be paid for’

The parents who use my setting have always agreed that the system is flawed and have always paid a voluntary contribution. Future parents may not though. I know of a couple on a joint income of £198000 who complained to the local authority about their nursery trying to add on charges when care should be free. The nursery is now on the brink of closure, it’s a small privately run nursery and the manageress was barely keeping her home as she took such little pay in order to pay her staff.

Obviously, in your case the nursery should have discussed this with you, explained why and also advised that they can’t make you pay it