To think some nurseries are pleading poverty unfairly?

[caffelattetogo]

We are currently looking at nursery for our DC and quite a few locally charge a top-up fee for funded hours. When we queried this, they said it was because the rates paid for by the government via the councils are too low.

So, I asked our council what they pay, and it's pretty much the same rate per hour as most of the local nurseries charge normally - which would usually cover their costs.

I'm hearing nationally many nurseries saying they will close if they don't charge additional fees but it seems that some are profiting by getting their full funding and top up fees. I understand that each nursery is a business and they want to make a profit, but I wish things were a bit clearer from them about why they need more.

Don’t forget, council budgets have been slashed by the Tory’s too, yet the same government continue to bring in initiatives where the council are expected to be responsible for additional roles, without any additional funding.
I was part of an independent panel which sets provider rates. The panel included the whole range of providers to make sure the rates were as fair as could be.

My LA had to cut its EY team ( quality assurance, training and safeguarding) going back leaving just one officer. With this initiative, the government expect the council to put it in place and manage it - all without any additional direct funding. The need to employ childcare sufficiency officers to support parents to access this and to manage extra places and funds. Funding has to be found.

This is similar to the DfE suddenly deciding that attendance has to be a focus for schools and LA’s have to have officers with responsibility, according to new government guidance…all without funding and in a system of long running cuts ( £5m to save in Children’s Services alone, this year, again). The LA officer responsible for attendance has another full time role, now with attendance added as their is no money to support employing another staff member.

Are the local nurseries you’re referring to attached to primary schools?

Why don’t you just use one of them if you don’t want to pay a top up fee?

The mistake is to think of it as free hours. The government funding = a big reduction to your monthly fee. That's good enough I think.

Nursery places are in such demand they might just laugh at you and close the door on your face

Was obviously enough profit in the large companies, for private investors to profit! ( although once picked up now donated).
https://www.independent.co.uk/news/uk/politics/rishi-sunak-koru-kids-akshata-murty-b2398515.html

One that I spoke to was one of the big chains and the manager said that they have a company policy to charge a voluntary quality premium, because in some areas the funding isn't as much as others. But in our area it's more generous, and yet they are still applying the charge, unless parents request to remove it, which feels a a bit like asking a restaurant to remove a service charge.

those girls certainly take after their father

I mean, what sort of quality would you like for your child? The bare minimum because thats what the council have funded?

Our fees ensure that there are really enriching activities for the children, well trained staff who are retained because they are paid a good wage with great benefits, healthy food and a lovely well run building.

But the funding seems to be pretty much the same as the hourly rate they charge. So what's the need for the top up?

I used to do the finances for a non profit (charitable) setting. V cheap rent in a community facility, most staff on min wage.

We calculated our "cost to run" per head. It was about £6/hour. The council gave us £4.75.

Based on a 6hr day, 39 weeks per year, 30 kids, it was a £44k loss. Luckily only around half the hours were funded hours, we had to charge just under £8/h for unfunded hours to simply survive.

Bare minimum because that’s ’what the government have funded’. Not councils.

Central, Conservative government cuts to councils are horrendous. I said up thread my LA has to save £5m this year, again, in Children’s Services, so that the council isn’t running a deficit.
Savings in children’s social care, early years, safeguarding, SEND. Work to support the most vulnerable.

For instance, I am continually horrified that in the past we had early years officers that quality assured, trained and supported nurseries. I did that job. In the poorest settings I saw blind cords over a cot, children playing with a gate left open, staff not recognising unsafe practices and not identifying signs of neglect or abuse. Poor early identification of SEND. We provided support, development and regular accountability, keeping safe our youngest children. We worked with, often a very young and inexperienced workforce.
These early years posts have gone completely. In my LA, there is no regular independent quality assurance, no support or development unless already highlighted by the provider ( and good ones are great at this), except for OFSTED, with a length of time between inspection.

Really worrying.

Private nurseries however do often make quite a bit and you won't see it from their accounts. A central chain will charge the nursery all sorts of fees - complicated service fees, inflated royalties for use of brands or "marketing", they will fund the setting with debt rather than investing equity, and will charge interest on it, a central group will own all buildings and charge hefty rents etc.

There's a reason the private equity funds have bought into:

• nursery chains
• care home chains
• childrens homes

Its because they can make a big return on all of it, often not where its easy to see.

They are often also skimming money out of the education academy system by having a profit making company selling goods & services to multi academy trusts.

All these things should be run completely on a not for profit basis, preferably by the state, with total transparency over all payments they make.

The conservative party love privatised public services. They will claim its because it makes them better run. Its not, its because there's often limited competition & inelastic demand, and this offers an opportunity to turn a profit.

Haven’t read through the whole thread but most nurseries if not all have to use agency staff. They are needed everyday in a lot of places which is very expensive and takes up a large part of the budget.

Err, are you aware of normal working hours? Most parents have to work. Nurseries attached to primary schools are great cause they are free, but wholly unsuitable for those poor souls that have to earn a living.

In our area these are only for a pre school year and places are insufficient for demand. And that’s before the 9-3 in school term times issue. Or people would just use them.

Since the new funding has been planned for September, our school nurseries only offer 15 hours per child - to be used 3 hours per day, morning or afternoon sessions. That's zero use for working parents.

Early Years settings are private businesses, they are allowed to make a profit and shouldn't feel guilty for doing so. If they are not making a profit and skimping on everything, you'll get crap food, broken toys, poor education, no outings.

The words top up fees have never been allowed, but the voluntary contribution that was, the government have said it no longer has to be voluntary. So they must be aware that the funding does not cover costs. They just want the votes so do it in a way that makes you think badly of the provider and not the government.

The smaller local settings are struggling to make their business sustainable.

The chains, of different sizes, who are backed by private equity are doing well enough to line the pockets of those at the top. The long term security of the childcare places is yet to be seen.

www.theguardian.com/money/2023/aug/04/childcare-sector-england-not-playground-private-equity-experts-say

Yes, it seems like it's the big chains making big profits and independents struggling. I just wish it was all a bit more transparent.

In my opinion (and an educated one due to experience in both finances and this area of government), most nurseries are poorly financially managed. The vast majority of managers (group managers of the chains and individual managers) have little business or financial acumen for affective budgeting. They are very competent childcare professionals and very nice people who have risen up the ranks by being good at their jobs – but these places really need the equivalent of a finance director or CFO for effective financial management and forward planning.

Busy bees 2023 accounts - link to companies house so in the public domain. Just scroll down a bit.

https://find-and-update.company-information.service.gov.uk/company/03454787/filing-history

@Crikeyalmighty

You pay nursery after parents' income in Denmark so it's pretty important. 0-3 yo (vuggestue) is more expensive than 3-6 yo (børnehave). You also pay a fee for food if provided for 3-6 yo.
However yes, you won't pay more than £400 a month and most parents pay way less.

We paid less in Denmark than UK and only did part time nursery in UK. It was too expensive compared to my income.

SAHM is often a better solution moneywise than to work in UK. I did some evening/night shifts and husband took care of children.

Many school nurseries have been asking for a daily or weekly 'resources contribution' for several years now.

Am I reading that right? £25 million profits in one year?

I work for a Bank and one of our customers was a very large chain of private nurseries partly owned by private equity. They made a huge profit. I

The same goes for care home owners, GP Partners, even fostering agencies and more.

For example older GP partners who own the building had it paid for by national rent from the NHS. So at retirement are selling their share of the practice and property and doing well at exit. It's a business basically.

Councils outsource fostering because they just can't do it and have to pay the private companies twice what they get from government. Example foster parents get £400 and the private company charges the council up to £900!

Care home owners who manage to run a good operating model, the homes are cash cows for them. This is what I see from their accounts and what they tell me.

I have done this role for nearly 20 years and just wish there was a greater awareness of how many private companies are running services for the public and make a fortune out of it.

Not all, but there are many who do.

What a suprise, owned by a SuperCo, and finding structure is that of a private equity owned company. Strip the company, pay staff the least possible and make millions on a quick exit in 5 years.