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 don't think that's fair. It's not that people are "not willing to pay for it" or "want their precious little darlings looked after for free". Its unaffordable. If I wasn't getting government help we would be fucked. Our nursery fees are 2/3 of our income (luckily we pay 20% through UC). People complain because they physically can't afford it.

2 children is nowhere near excessive, but without parental help or a SAHP (thus losing 1 whole income) its 2.5 grand a month minimum. How many people do you think earn that? They are directing their anger to the wrong person, but I see why they are angry.

It is the issue that once upon a time, 1 persons wages would be enough for the household. But now both parents have to work in order to have the same income standard as before. Which is a shame. So the child or children have to go to daycare. Then the daycare have to charge of course. And in some cases this nearly takes all 1 persons wage or near abouts. So the household is still not earning quite enough to provide a comfortable life for their family. So then the problem then is they are not better off for both working full time. Or for one person working full time. We just cannot win in this day and age.

Our nursery is near three hospitals - the ‘rif raff’ were often doctors and nurses who were trying to force the nursery to work around their schedules to pay the minimum - she got a lot of abuse / parents not arranging pick ups with emergency contacts in advance so nursery staff would need to wait hours. This is despite the nursery being one of the few now that open from 7 and still finish at 6. Then they’d abuse her for even normal things like kids having accidents etc.

She was just fed up because local school attached preschools rarely have the same problem.

There is a misconception that because preschools have a teacher that nurseries do ‘less’ at preschool but it’s not the case. Private nurseries provide childcare AND the same education to the EY framework. Schools only provide education and because they use teachers the pupil to adult ratios are higher. Which is why most school preschools are cheaper.

@JaukiVexnoydimy understanding (and I’m not by any means an expert!) is that it’s pretty common practice in nurseries to essentially have the fees for 3 year olds subsidising the cost for babies so it’s affordable for parents generally.

I’m not totally sure why it’s that way - maybe simply that the cost would just be prohibitive for babies otherwise resulting in trapping parents out of the workplace and meaning that nurseries don’t get any “new customers” as they’d be scared off by the price/go elsewhere where they do this pricing structure. Although theoretically then you might in reality end up with lots of people going elsewhere for the baby bit and coming to OP for the 3 year old bit! Which actually might make good financial sense if they have the highest margins… though people don’t often swap nursery once started. And maybe there are government rules about how many of each age group you can accept for balance etc?

OP may be able to enlighten us further here as to whether it’s feasible to change the pricing structure? Or in reality would this just not work? I do see what you’re saying here, it does feel slightly counterintuitive to be paying the most for the older children who need less staffing ratios and who are able to do more for themselves developmentally.

@newmama2023 I completely agree with you, it all boils down to this really. I really feel it as a single parent that life is not set up at all for a household to live on one income alone. It feels like such a struggle and a rat race these days just to support a very reasonably sized family. When I was a kid I knew so many families with 4 plus kids (the most was 11!) I don’t know anyone nowadays with more than 3 absolute max.

How much is the extra hour in the evening costing you?
You need to get staff to start combining rooms as children leave from 5. One person cleans up the empty rooms. Put the TV on for the last half hour and have one person supervising while everything else is shut down ready for the last child leaving at 6.
Same in the mornings - set up doesn't take half an hour. Have the first staff in 10 minutes before opening time to do a quick safety check before opening the doors. Set up can be done with children there.
Minimise paperwork, only do what is legally required not lots of written observations or making scrapbooks.
Do you have any apprentices? This is where most nurseries save staffing costs.
Your manager and room leads need to be level 3 qualified but your other staff can be 50/50 level 2 and unqualified/trainees. Apprentices are only paid around £5 an hour so many nurseries will aim to have as many as possible. Then if they're good you also have a qualified staff member to employ at the end of their training.

Rather than put up your prices, have you thought about stopping offering food? Or just doing a breakfast and snacks/light tea that practitioners can prepare? Parents send in lunch boxes and you will hugely reduce both your food costs and won't need to employ a cook.

Are you making a loss on funded hours? Make sure you are charging for snacks and consumables on top of funding. Also, get creative with the hours you offer as funded eg 8-11am and 3-6pm as your funded hours instead of 9-3 and then charge a premium for additional hours between 11-3.

@sadlittlelifejane but it is a service..... just like when people require care when they are older. They have to pay for carers to look after them (who are qualified, who will treat them with dignity and respect) and these carers need to be paid!
Would you go to your job and not be paid?

£2.5 grand is more than my monthly wage, that's why I'm a shift worker and my husband can do flexi work days around core hours and we have one child at the moment.

OPs fees aren't extortionate for the service she provides.

@Wenfy that's not riff raff, it's people who are unreasonable and she is unreasonable herself for just wanting full time care. Not once did I say about the difference between pre school attached to the school and the differences between private nurseries. It's just that government funding is provided for 3 year olds for nursery for early years education in term time. Not just for childcare.

Childcare is very expensive, but that's not your fault! They need to redirect their anger at the government, who could and should IMO be supporting the childcare industry a lot better. Hopefully if you stay open you will weed out the whingers.

I'm new to all this but have just signed up my son at a Nursery School. It's very affordable but term time only. I wonder if that's why it's so cheap.

Your fees are around what I currently pay for a lovely nursery, without the 30 hours funding I was paying £1000 a month for 4 days. It's a lot, especially for families on lower income but it's temporary and has more long term benefits- because we've used nursery I've more than doubled my income since having dc and that wouldn't have been possible with a career break.

The nursery always have more than the minimum staff in each room, do lots of activities and have a big outdoor space that the children spend lots of time in, they have lots of different people come in to do fun things. I don't know how profitable it is as a business but fully understand that's what it is, and appreciate that they are exceptional. A large group of their staff have been there at least 7 years, dc1 also went there and they have had very little turnover which tells me it's a decent place to work.

Some of the pricier nurseries are around £12ph are also really popular and always full.

This isn't an affluent area, very average northern town.

It's clear you genuinely care and wanted to provide a service for your community, I'm sorry you've had so much negativity.

I live in Germany, childcare staff are paid much higher than in the UK - around 30-50k (euros) gross, depending on experience and position. The nursery will have to pay out around 20% on top of that in contributions to health and social insurances. (The employee pays 19% too.) And then training etc.

It is HEAVILY government subsidised. We are paying €600 monthly for 2 children, and that is considered an expensive Kita because it has its own private chef, most use catering, and it's full time and the fees are a little bit higher than other local options. It's actually about €480 for the youngest and the eldest is fully funded because of being a 2-child family, so we only pay the €120 for his food. Children go to childcare until somewhere between their 6th and 7th birthday. Ours is year round, just 3 weeks summer holiday, 1 week easter, 1 week Christmas. (Most of them do follow school terms).

But the funding varies a lot by Bundesland and Kreis (county, basically) - I don't think it's as cheap everywhere as it is here. But nowhere is it fully privately funded like in the UK.

@JaukiVexnoydi those rates per hour were just the staff cost, OP then said there’s overheads like rent and energy to factor in too.

How disgusting of you. You do realise that there are people who need such childcare provision.

If the government is going to start giving more loans out to people who will never pay them back, they may as well just subsidise more.

Sounds amazing. Good for the German government investing in this. I think it’s similar in France too.

I think nursery staff do a very important and responsible job and should be paid considerably more to reflect this.

Governments may or may not choose to subsidise the cost but the employees should be paid much better than minimum wage imo.

@BertieBotts this sounds like a dream! I was paying £800 a month circa 2008 for the cheapest nursery I could find locally for full time care for my son while I was at work Monday to Friday (most were charging £1000-1200). Definitely no private chefs! Very down at hell but affordable and the people working there were so lovely and really cared about the kids. My child was very happy there. But it was the same cost as my rent at the time.

@bugaboo218 I agree. Those saying the ratio increase is a good thing clearly haven't looked after children in that set up. Even on the current basis of 1/4, in reality you have more kids per person as you will have someone doing nappies, another preparing snack, setting up the room/paperwork etc. It is incredibly tough especially if you also add SEN kids to the mix (And the number of SEN kids is rising). It's utter mayhem and people who don't work in nurseries have no idea.

Great, so whats your suggestion for those not able to do flexible shifts? No children for those with 2 parents in 9-5? Or maybe, the government could subsidise like in many other countries..?

It may not be optional to pay for childcare but having kids is optional at least. I know we thought long and hard before deciding to TTC and waited quite a while until we were certain we could afford childcare. I agree with everything else in your post.

Some good advice here for the most part (especially the food thing), but TV? What?

If kids are under two then that goes against the WHO recommendations, and I doubt many parents would be happy paying for childcare where the provider sticks the TV on. I get there are challenges but compromising the care a child receives by using screen time as a babysitter really isn't the solution.

YANBU. I hope you aren’t keeping the nursery open out of a misguided sense of community. They sound demanding and ungrateful and it would be a relief just to close.

It's a very common cost cutting solution to avoid having to pay for cleaning time.
As this thread demonstrates, early years is underfunded so of course there have to be compromises on care to keep the cost of childcare low enough that parents can actually afford it.
See also: very young/unqualified staff, absolute minimum ratios, the absolute cheapest low quality food. Compromises have to be made.

Thank you again for everyone's considered responses.

We've cut costs as much as we can but to add insult to injury the governing body are applying a very large amount of pressure on us to be making constant upgrades as well as meet a very large and unrealistic paperwork/admin goal.
We've had a very highly regarded early years consultant come and review us on a charity basis (God bless her) and she has been invaluable in helping us to counter a lot of the unreasonable demands the governing body have made.
But the pressure is very much coming from all sides - parents want us to drop prices and be more flexible with sessions (drop off when suits them, rather than fixed times) whilst the governing body (who we are in the process of filing a very large formal complaint against) are scrutinising us with white gloves and demanding all manner of very expensive and superfluous upgrades, criticising that we don't have extra staff on duty etc etc.

There is one single competitor, a pack up and play service for Over 2s that runs mornings during term times who are constantly spreading rumours about us and doing what they can to undermine us - including relatively frequent slander on social media. They get subsidised accommodation and have lower overheads due to their set up - which means their fees are slightly lower. IMO (and it is my opinion), their offering is of a substantially lower standard, but I will not speak out against them as I don't want to get into a public bun fight.
We have many parents who use us for the Under 2s until they can jump ship to the competitor who is around £1 an hour cheaper. As a PP observed, Under 2s is a loss leader.

I've cut food in order to lower fees following strong demands to do so. My Manager is, understandably, frustrated at my insistence on cheaper activities and using recycled materials. She's young and comes from a chain nursery with a higher budget.

The industry is already on it's knees, and we've got those problems plus a strange, out of touch community and horrifically abusive governing body.

I'm not quite prepared to give up as there are some decent families that need us, and I'm really fucking stubborn.

What is the point of continuing? Its adding nothing to your life