To think someone MUST be profiting from private nurseries?

[SprinkleofSpringShowers]

Nursey saying that the free hours cripple them. My bill has gone down by £200 from £940 to £720 for the 15 free hours. My child is booked for 3 days/30 hours (not that he’s ever there 30 hours) I don’t really understand how they are struggling so much when any shortfall in the funding is just made up by parents.

The branch we use charges £73 a day now. They’ve open two new sites in the last year. Can’t be doing that badly can they?

Also think it’s really poor taste when they seem to pedal this image they’re struggling and the staff are likely paid NMW and the directors turn up in 2 year old Porsches.

Of course they are struggling, they are driving 2 y-o porsches

Well they are not a charity

They are businesses, if they weren’t making a big old profit, they would not be running. They are like dentists, always pleading poverty … but making a mint.

Also, why not have a discussion about profit with a nursery owner? Get the facts rather than make assumptions?
I am sure they will be delighted to discuss your finances too

That hasn’t escaped me. My point is they must be solvent than they let on and less vulnerable to the free hours. Parents make up the shortfall, so whatever they don’t collect from funded hours is still paid - so how can it create the deficit we’re told it does?

The school preschool doesn’t charge top up for funded hours so I can see why they might struggle more, but private nurseries just seem to be pedalling a myth.

The government aren't paying enough for those free hours is my understanding. So they make a loss on what they give. But being a business they just charge the parents that loss. It's more the independents that will struggle I think.

Back when DD went to nursery they said the same and then the company (group of nurseries, Kiddi Caru) posted saying they made 11 million profit. Didn't quite fit the narrative. That was 12 years ago.

@CommeUneVacheEspagnole yes exactly. The nursery manager had a chat with me saying how much they’ll struggle with the free hours and how it’s crippling. But they’re not taking a hit.

The nursery we used was definitely making a profit due to the cars the owners drove, and why would they do it otherwise. £73 a day is insane, it was around £45 a day when mine were little. Back then the other parents who used nurseries were working parents as that was before the government started offering free hours for younger kids. I can understand why some parents try and work from home with young kids around when it’s £73 a day, though I don’t agree with it.

There's a reason private equity providers have backed some of the chains - There's absolutely money being made.

1. the buildings. Rental charges etc
2. service fees charged for things like marketing materials, access to any IT systems, financial services.
3. use of young staff & trainees who are paid lower minimum wages

There are other areas i won't go into here.

This government love large nurseries because they don't understand, childcare provision is something you cannot scale up easily to reduce cost. The biggest costs of caring for children are the staff & the premises, and ratios mean you can't reduce the staff. Scaling up actually adds complexity and creates a need for extra costs for marketing, finance support etc.

If the government truly wanted childcare to be cheaper, they'd be on a huge campaign to encourage childminding, which is a much lower cost model as people do it from their own home using toys/equipment they often already own.

The birth rate has fallen markedly over the last 15 years. Childcare demand should have reduced, not risen, yet in most areas there are not enough places

I've often wondered about just how much money nurseries make. Given how much they charge and how little they pay their staff I always come to the conclusion that it must be loads

Most nurseries will be part of a limited company.

Look them up on companies house and look at their accounts.

If they are small they may only have a balance sheet but there are giveaways.

Look at - movement in profit/loss reserve year on year.
Payments to directors/directors loan accounts
Amount of tax paid
Cash at bank (although be careful, holding cash doesn't mean profit)

These can give a ssnse of scale of what's being made.

Why don't you ask them? Would save you an awful lot of speculation and satisfy your curiosity.
Of course, go with all the facts, such as how much they pay their staff (rather than assuming), how much they pay per month for rent, utilities, insurance, checks, training, equipment, food, etc, and have that total set against income from parents/govt.
Then you can really tell them what's what about running a nursery and profiteering from it

To be honest they are not a public service .. you choose to use it so .maybe pick a fight with the government .

The small chain that my DCs is part of (5 nurseries) also pleads poverty and puts up the fees by eyewatering amounts to 'cover costs'. The owner of the chain is seeing profits of > £1m a year if Companies Hse is to be believed- which im sure it can 😬

A friend owns a chain of 8. She openly admits they are doing very well; staff are mostly paid min wage and she and the other owner take the rest.

Private daycare nurseries offering after and before school, as well as holiday cares

I’m not disputing the fact they’re a business. I’m just pointing out that their claims they’re struggling etc aren’t accurate and in poor taste given the cost of childcare to working partners and the climate right now!

Are you suggesting they run the chains for the benefit of my kid’s education? I don’t go to work out the goodness of my heart, I’m not suggesting they should but telling the end user they’re struggling to stay afloat then arriving in your bloody Porsche is in poor taste.

I'm suggesting no such thing, as you are well aware.
I am suggesting that instead of making accusations of such profiteering, you do some research and get your facts together.
You do not have to be rich to be driving a 2 year-old porsch. Plenty of 'percieved to be poor' are driving in brand new fuck-off range rovers, etc. Outward trappings of wealth are not indicator of actual wealth (or taste)

In making some basic assumptions I could see how they wouldn't make much money. If a nursery worker is paid £11.50 min wage plus employer costs for that person of 15% then that is £13 an hour. Each person can look after 3 children so cost is £4.50 per hour. You pay £73 a day so £7 an hour. The remaining £2.50 an hour has to contribute to buildings, utilities, management costs, toys, food and a huge amount of other costs which will be very high given CoL. I can't see it making much money. This is also based on what you pay not what the government pay so a lot less. Like I said there is a lot of assumptions in these calculations but it give a view of how profits could easily be low

The 1-3 ratio is only for babies, it’s now 1-4 too. In the 2 year plus room it’s 1:6 and then the preschool is 1:8 or 1:13 if there’s a qualified teacher.

@Plmoknijbuhv

Most have a hefty chunk of staff under 21 who are not paid full minimum wage. Some will have a constant stream of 17/18 year old trainees earning far less - a 16/17 year old or apprentice is on only £6.40/hour and an 18-20 year old is on only £8.60

You have to have a fair amount of disposable income. I’d hazard a guess it’s atleast £1000 pcm on PCP.

Yes our nursery has room leads and then junior staff.

Our bill has gone up by £200 a month to take into account the reduction when the free hours kick in. So when we get those, bill will be the same. £1700 a month for one child.

But I actually see no evidence of big profits. Building is a bit tired. Lots of toys are second hand from parents. Staff walk to work/ get the bus.

School preschool won’t need to charge a top up because they are only open term time. The funded 15/30 hours are term time only, so most families are stretching that over the full year. Our 15 hours a week becomes 11 when spread over the 51 weeks a year nursery is open.