to try and explain why nursery fees are so high

[SunsetCurtain]

I opened a nursery two years ago, in an area that desperately needed one. It was all over the local papers at the time about the local childcare crisis, and families were having to relocate etc. I thought I was doing a nice thing.

Since I've opened, I get weekly - sometimes daily - criticism and occasionally abuse about the "extortionate" fees we charge. I've been called a filthy capitalist, a con-artist and endure many, many comments about "printing money" etc.

I cannot comment IRL, I'm in a closed community that would deliberately misunderstand and I'd get even more flack. So please allow me my vent.

Childcare ratios are as follows:
For every 3 children under 2 years old, we require 1 staff member.
2 - 3 year olds is 4 children to 1 staff.
Over 3s is 8 children to 1 staff.

50% of staff must be qualified at all times - that's a Level 3 childcare diploma or higher, which is typically 2 years of college study. I've done it myself very recently and whilst it isn't "hard", it is extraordinarily detailed, long and - frankly - dull.

I pay our Manager £13.50ph, Deputy £13.00ph and all other staff £12.50ph. Excluding employer's contributions. We pay well for the industry, which is typically minimum wage (£10.42ph) - our salaries are reflective of our less than popular area.

All staff are legally obligated to attend a 2 hour long training session run by the local council 4 times a year, with our SENCO and DSL staff required to attend additional specialised sessions again. It is expected - at a legislative level - that each staff member does an additional 20+ hours of CPD a year.
It is also mandatory to have a monthly staff meeting (so add 1 hour extra per staff member each month), and a monthly supervision meeting per staff member (so 2 hours for Manager + staff member).

We obviously have to pay staff to open the nursery 30 minutes before children arrive, and they stay for roughly 1 hour after children have left to complete paperwork, clean and lay out activities for the following day.

The Manager needs 10+ hours a week on top of the time she spends with children for more paperwork than God himself needs to complete. She only gets away with 10 hours a week because I do the majority of the heavy stuff, for free.

I have calculated, roughly, that for every hour a child is in the nursery - it "costs" us 1.4 hours of labour, when including the above.

A minimum of 2 staff must be on site at all times, meaning that the staffing cost per hour is at a minimum of £35 per childcare hour (taking into consideration the training etc.)

If those 2 staff are taking Under 2s (2 staff = 6 babies) - that brings the cost per baby to £5.83ph
2 - 3 year olds would be £4.38ph
Over 3s would be £2.19ph

This is, of course, assuming that there are the maximum number of children per staff member - which is rarely the case.

This does not include - surplus staff for illness, lunches, outings and annual leave.
Overhead costs such as electricity (for us this is roughly £400 a month in Summer), rent and business rates.

I don't really know what I'm trying to achieve here but honestly, I'm going insane. All I seem to see online is people complaining about the cost of childcare, and I know that it is often directed at the gov, but it's also often directed at Nursery owners and I really don't think people have sat down and looked at the maths.

Setting up this nursery cost £75k, and I was doing it on a tight budget with family doing a lot of the renovation.
I have never drawn a salary, and in fact subsidise it by several thousand a month with a full time job.
(Yes, I'm considering closing it - but I know it will make me even less popular in town).

Rant over. Congrats if you've read all the way though <3

I'm on the committee for a non profit preschool where most children are on free hours. Volunteers do things like all the accounts I including paying staff for free. We still run at a loss and have to do a huge amount of fund raising to cover the deficit. It's got a lot worse with minimum wage increases not being matched by equivalent increases in the funded hour rates.

Nursery is expensive- it should be! I want my children looked after in a safe, enriching environment with good resources, and nice fresh food, by someone who is appropriately qualified, who cares about their job and the children and is paid well for doing it. And that costs money.
I don’t think all of that cost should be borne by the parents, especially not if the expectation is that women return to work after 9 months when statutory maternity pay stops. The government need to increase the money they provide to nurseries and stop the ‘free hours’ promises (not the money, just the wording) - Call them subsidies, and let the nurseries charge the top ups they need to charge to make it viable.

I'm a childminder and often get asked to open a nursery or primary school 😅 I'm Montessori trained so effectively they're asking me to duplicate myself. I can't open a nursery or even take on an assistant with the massive expectations of employing people: plus who would I hire?! There's just not the interest in working in early years. Articles like Daisy Jones in the guardian today saying young women want "lazy girl jobs" go a way to explaining it perhaps. Good luck OP.

YANBU - there are a lot of holes in the expectations that any parent, usually the mother, can seamlessly return to work after their 'maternity package'.

One of these 'holes' is the costs of providing the childcare in the first place. Nevermind the 'legals' there's also the need to fulfil the expectations of new parents, with great Mat 'packages', thinking everything else runs so well-oiled when it really doesn't. Once the childcare costs are truly totalled and factored in.

It's no one's particular fault that childcare provision doesn't work so well, not even the current govt, but just the usual lack of joined-up thinking that knee-jerks to suit the greatest pressures of the day, rather than properly think things through.

It is one thing where I don't understand the government stance. Mostly the current lot are very transparent, but not on this.

They seem to want people to work, based on only giving 30 hours/tax free childcare to working parents, but I believe UC/contribution based JSA doesn't make you seek work if you have an under-2. Yet maternity pay runs out at 9 months. So they expect parents back at work after mat leave but not to need childcare until age 3?

What a shame. What about those families where one parent works pt around their partner's job so they can spend time with the children? Will those children be forced to attend FT (and their parents pay FT fees)? It leaves families without a choice, and in fact totally negates the claim that nursery care is about providing a stimulating learning opportunity. Let's face it, it IS about providing care while both parents work, if that is the case.

But it isn't just the govt that expects mothers to return to work, not only do mothers themselves want to, not least because they want to preserve their careers, pay into their pensions and lead fulfilling lives as well as having dc and a family life. And why shouldn't they?

Except, this isn't a choice anymore. Not only does it now need 2 incomes to keep a family-home going - there are societal expectations too, often conflicting and contradictory, creating too many variables to list here.

Whilst I very much welcome the changes to the rights of 'mothers' in the workplace that have become systemic in the past 20 years, it's too fraught to be sustainable.

Because we (the electorate) are predominantly selfish and short-termist. We elect political parties which promise to cut taxes and with it public spending.

You’re not wrong. But I don’t remember any party promising childcare funded to the levels seen in other countries. How do they do it? Higher taxes I guess? I know that’s the case in Sweden and the scandi countries.

You are not wrong OP. Running a small business int his country is impossible. Trying to be productive full stop in this country does not pay.

Consocialists have destroyed enterprise.

While we remain a nation that pays millions to sports players, or people in reality shows, we keep showing our loyalties lie with them and not our children and loved ones

What made you want to set it up?

I ask as a few years ago my wife and I went down the route of investigating it and no matter what I did in terms of modelling I could never turn it into something that looked like a decent business.

The only model I found that looked good required too much capital investment.

That was a soft play centre with restaurant which during the day would be used for the nursery, provide meals, provide a takeaway/delivery food service. Then in evenings and weekends would be a soft play centre/restaurant and at night would do pizza delivery. Then in the early hours of the morning renting out the kitchen space to bakers who would complete before 6am.

I know this isn’t an AMA, but as you’ve put so much detail in, I’m going to ask…

“I thought I was doing a nice thing”

You sank £75K into this, haven’t take any money yourself from the business in two years and have to subsidise it by several thousand a month.

Why are you doing this?

I don’t understand all the stuff about the community being cross with you either. People open and close businesses in my village. Nobody takes it personally.

You’re making some odd choices. The nursery is your very expensive hobby, and it doesn’t even sound like you’re doing it because you wanted to hang out looking after toddlers all day - because you’re actually at your real job that pays for this hobby. It’s all crackers!

We did pay higher taxes in Germany but we got value for money in terms of healthcare and childcare. This was before COL so not sure what it’s like now but most other things were cheaper than the UK too.

I don’t think people would mind paying higher taxes here if it meant affordable childcare and health services without waiting lists. At the moment people can’t afford higher taxes because everything else is expensive and wages are stagnant.

I know people are saying it's impossible to increase ratios, but I think it's worth pointing out that bigger ratios do seem to work fine in other countries. England has unusually small ratios. At the very least, nurseries should be given the option of giving parents the choice of bigger ratios for more affordable fees if they want; other nurseries can opt to keep ratios small and fees higher.

Well yes, of course plenty want to return to work. I did after 11 months. But I was genuinely wondering if the government is making it difficult for both parents of a 0-3 year old to work on purpose (certainly if one is minimum wage) and why this would be, political-gain wise.

Excellent, well-funded childcare means more employed parents, more income tax, more money in the economy, higher house prices (the Conservatives like those). It baffles me.

Same job role. Agree with all the above as well as agency costs as like many nurseries, we don't have enough qualified and permanent staff.
Early years is in tatters right now and only going to get worse with the new funding implementation.

As a parent who worked full time and children attended creche I always think it money well spent understand that they very expensive to run.
From your overview I think you should review the per hour fees. I always paid a set weekly fee same price for all children ( not dependent on child age) until they in school then the after school fees different.
Are you near a school to do after school care? I say good money with that as ratios higher.
Also the extra staff after closing our place didn't do that. Opened 8am with X number staff more join at 8.30, 9 as more children arrive in same for evening. Seem to start tidy up as numbers reducing towards end day.

It is hard to make a profit in nurseries, but is this bit true?
All staff are legally obligated to attend a 2 hour long training session run by the local council 4 times a year, with our SENCO and DSL staff required to attend additional specialised sessions again. It is expected - at a legislative level - that each staff member does an additional 20+ hours of CPD a year.
It is also mandatory to have a monthly staff meeting (so add 1 hour extra per staff member each month), and a monthly supervision meeting per staff member (so 2 hours for Manager + staff member).
I work in this sector and have never come across 2 hour long council training 4x a year, 20+ CPD hours or mandatory monthly staff meetings and supervision. Are you in England?

Paying high wages, and paying 30 minutes before children arrive and an hour after they leave is also very unusual and will be eating into your profits.

People who say the ratios should be higher make me roll my eyes.
Please, volunteer to do some shifts on a 1/4 ratio with 2 year olds, some of whom are SEN, do that 8-6 everyday, then we can talk about extending the ratios....

You’re proving a valuable service and I’m sure people would moan a lot more if you closed your doors tomorrow!

I’ve found that many people don’t know they can claim tax free childcare. This I don’t believe is means tested so most people would qualify for it.

If you get Tax-Free Childcare, you’ll set up an online childcare account for your child. For every £8 you pay into this account, the government will pay in £2 to use to pay your provider.

Basically, you pay in 80% and the government tops up 20%. It really does help. If your child care costs are £500 pm for example, you’d actually pay £400. The government would pay the other £100.

Are your clients aware of this OP? I think this would help if people became aware of this. Again, this isn’t based on people’s finances, most people qualify. Providing the child care centre accepts the scheme. I presume you do OP?

That is so cheap!! We pay £8 ph for our son to go to a local childminder (he is 3!) x

What the hell would you ask this for?
Do you even understand that people (like myself!) work shifts and have no family to support them? Don't be so judgemental!!

I’m just had a thought. For example if you have 12 two and three year olds in a nursery you’d need 3 staff to supervise them.
If a 13th 2 year old came into the nursery , you’d need a fourth member of staff for that age group.
So you’d effectively have to pay out another salary, just to accept that one extra child. Which wouldn’t make financial sense would it?

Huh? What has this nonsense got to do with nursery fees?