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.

They are only meant to charge for add-ons, not use the free hours funding to subsidise the standard day rate.

That said, you have highlighted a disparity. Government subsidises private pre-schools, private SEN schools and companies incorporated as charities that offer tertiary education (universities). They even fund Academies and multi academy trusts, which are free to the user, but often short of funds at the classroom level while directors, like your nursery owner, drive porches. The only type of education they don’t subsidise is mainstream private education. It’s crackers really. If we as parents were given a voucher and could choose where to spend it, it might focus the minds of the porche driving directors a bit.

That’s not strictly true. School preschool can still only take the funded hours which are paid at around £4.25 per hour whereas mine is £7.30 an hour BEFORE funding.

Set up your own nursery if it's such a gold mine
Indeed, why isn't everyone jumping onto this gold-laden band-wagon?

People run businesses to turn a profit, they can do this and still struggle to balance the rising costs of utilities/rents etc, wages against keeping prices fair and turning a profit. It is a juggling act. They than have struggles with managing the people they serve and employ, often some are offended they turn a profit, think they have larger profit margins than they do, and think they should forfeit the profits and pass it on to them.
I ran a business for 12 years and some people's views were very ill-informed.

During covid we didn't turn a profit at all, all our equity was being used for the luxury of staying open and paying the bills/wages etc as people still needed fuel etc put footfall was down and costs remained the same. It was a big struggle seeing the money we worked for paying for everything, we nearly lost it all and had nothing to show for years of hard work, stress etc for the benefit of our staff and customers, no one recognised this and if it was pointed out some actually said well that's what you get when you run your own business, you must be loaded anyway.

Long winded post, but my point is I hear opinions like that in the OP and I do get a bit defensive as I have been on the receiving end of opinions like this and even when things are explained it still remains a mystery to them as they have never put their homes, income and general life on the line to go out on their own to run a business meaning if it goes wrong they can loose everything.

I don’t like other people’s kids. I have my own business affairs thanks and I’m not kidding anyone I do it out the goodness of my heart.

@DivergentTris during Covid my husbands business folded and we were still paying a nursery bill for a period of time. It wasn’t unique for nurseries.

Absolutely some do make a profit, some are paid in excess of £100K a term just for funded hours, that's before the top up fee's are added on.

Stop moaning about something you don't have all the facts for then

Op, I think once you look at the cost of salaries, pensions, business rents, business rates and insurance, you will have your answer.

Very few running nurseries will be making vast profits. It is a high effort, low income business unless someone happens to own the building they operate from.

Anyone prepared to take on that sort of risk deserves a little profit.

For example have you seen how difficult it is to get a mortgage if you are self employed? How many years accounts showing a consistent profit you need. The higher interest rates charged. You are not fair.

I’m not moaning that they make a profit, I’m moaning they try and pedal a myth that they don’t.

They are not a publicly-owned service but not difficult to argue that they are a public service, much like care homes.

If nurseries disappeared overnight productivity would plummet (as in March 2020)

It's entirely possible that the expensive cars mentioned above were a gift, bought with inheritance, bought with partner's money etc.

Nursery is my biggest expense after my mortgage. I’m allowed to be critical of a
service I pay handsomely for.

Ironically it’s a family business so the inheritance would have been from the nurseries…

Ironic you’ve come to the thread to moan about me moaning.

You're forgetting that some parents will just use the free hours and so don't pay top ups.

Your high fees are effectively subsidising those parents.

I was one of those who managed to wangle it to just use the free hours.

Not moaning, dearie, just pointing out that you are moaning and making assumptions based on outward appearances

Yes, they all plead poverty but the ones near us make a fortune. They are making even more by charging top up fees for funded hours too.

The nursery won’t allow that. Your child must do atleast 3 full days to use the hours at our nursery.

When my eldest was in preschool they called the top up a “premium service” they don’t even dress it up now.

The issue for settings is that the government sell this funding to parents as free hours. The parents then get annoyed that nurseries and cms are still charging on top. The myth is that the government rates cover your 15/30 hours entirely, they don't.

The best thing would to have the government admit this is just a contribution and parents wouldn't feel so annoyed at still be charged a tip up.

Instead they make settings come up with fancy ways of still receiving the same amount and parents aren't stupid and feel tricked. You should feel tricked by the government, not the childcare providers.

There are lots of models of delivering childcare, some that are more profitable than others. I have a small preschool and we are struggling. My staff tend to stay with me until they retire and everyone is qualified. We don’t charge a top up and it is really tough to pay for a high quality workforce with just the funding.

It’s not so much that a business is making profit, that’s to be expected - it’s what they’re there for. It’s the pleading poverty at the same time.

I was paying £70 for a day (9 hours) years ago. ‘Free hours’ were scheduled as a few hours in the morning and afternoon, they charged a much higher ‘additional hour’ rate for the hours around the ‘free’ hours, plus an ‘enhanced provision charge’, plus I think lunch. (I didn’t opt for breakfast or tea and managed to avoid any hours around the standard ‘day’ hours as these were double rate. So a funded day was £58. They got more than £12 from the government in funding for the day.

Of course it was my choice to use the nursery but once a child is settled you’re at the mercy of fee increases or a big upheaval, they increased fees annually. Plus group sizes grew hugely and some of the new staff didn’t seem that hands on with the children. Plus it was very hard to work out charges as they advertised the ‘day’ rate, it was only once you got billed with a very complicated calculation it became apparent that you paid a lot for ‘free’ hours.

That was their prerogative of course, but after 2 years the owner pulled her own children out of state school and put them into private… and then actually complained to parents about the cost of privately educating her children!

I switched nurseries. It added another hour round trip to drop off and of course a lot of pain of resettling but it was our only option financially.

Crikey, some posters are taking the OP very personally aren't they? Nurseries are much like schools on Mumsnet @SprinkleofSpringShowers . Must never be questioned. As you are finding out by the weird replies.
I always assumed they made profit due to employing and relying on underage workers. Also the extortionate amount they charge. £1800 a week per child anyone? Yeah, course no ones making a profit 😂. Its a business at the end of the day and the person/company running it isnt doing it from the goodness of their heart. Stupid to suggest otherwise.

Yes, I completely understand how a preschool operating like this will struggle.

My friend has worked at the same small preschool for nearly 20 years @Greebish . Sounds very similar to yours. I hope you manage to stay up and running.