Nurseries cannot charge extra to access free hours: updated guidance

[MidnightPatrol]

The DfE has updated their guidance to say while nurseries may ask for voluntary contributions towards nappies, food etc - they may not have mandatory top up fees to access free hours. Councils will have the power to fine providers who are asking parents to pay extra.

news.sky.com/story/amp/parents-must-not-pay-mandatory-extra-charges-to-access-free-childcare-government-says-13313166

This is surely only going to reduce access to free hours for the majority, and push up costs for those paying for unfunded hours? And quite possibly, lead to nurseries closing.

Other consequences which we are already seeing:

• Minimum attendance to access free hours (4 days for the 30 hours or 3 days for 15). I am not clear if this would be banned under the guidance.
• Nurseries not offering the free hours
• Unfunded hours becoming more expensive to offset

YABU - nurseries should not be able to charge extra
YANBU - nurseries need to be able to cover their costs

Given the funding is not enough to provide places, what exactly do the government expect the nurseries to do?

It shouldn't be this difficult - the government are right to introduce the funding that they are, they are wrong to involve so many stipulations that nurseries have to jump through, most of which mean it is financially not viable to open their doors!

Daughters nursery is considered one of the best in the county, we had to put her on the list 18 months before she started, it is a wonderful setting that does so much good.. and yet it is struggling to stay open. It is currently battling the council to ensure the policies are in line with everything. The council are battling back instead of supporting .. all v difficult!!

I am more than happy to pay a top up fee if it means the funded hours can continue and the nursery is viable to stay open!! It's a small price to pay compared to the 100s per week we were paying before funded hours came in!!

Yep, another dumbarse government oversight.

My sons nursery recently sent out their new fees and I noticed for the under 3s the daily rate has gone up by 25%. That’s not a coincidence, it’s to subsidise the free hours they are having to give.

Not in the UK but I can't understand how it makes sense that the rate is the same regardless of where you are. Staffing and premises costs are going to be far higher some places than others. So I can understand how some nurseries manage fine, but realistically if you live somewhere with high staff costs, high turnover of staff, expensive premises costs, it just doesn't make sense.

The biggest typical cost to a nursery is the mortgae/ rent - nothing to do with wages

Any child over 9 months with working parents will be entitled to some free hours from September. One nursery locally have put their prices up in advance of this as their top up charge is high, the owner has openly admitted putting the price up means the top up only price looks like a bargain.

(The owner doesn't believe funded places shouldn't exist - they are very open about that)

You are very naive if you think that that £320 will result in a profit.

There are on costs beyond the minimum wage for NI, sick and holiday pay. It adds a further 25% to the wage bill typically.

Nurseries pay business rates. My daughter’s nursery pays £110 per business day in business rates.

The premises are usually rented, ballpark figure is £30,000 per year (low side). That’s another £120 per business day.

The nursery also needs heating, lighting and insurance. Utilities typically £10-15k
pa so another £60 a day. Insurance another £15 per business day.

So far we’ve chewed through well over £320 in fixed costs and the nursery owner is yet to pay herself, nor feed and entertain your kids.

Tell me again how the subsidy works?

Also what top ups some places feel the need to charge will also depend on what rate their LA pays them as it does vary somewhat.

I know from a friend who is a childminder that there is quite a wee difference in our LA and the next one along. Multiplied by the number of children the average nursery can take that could add up to quite a sum.

This is incorrect.

If one parent earns over the upper earnings limit, they are eligible for £0 of childcare help between 9 months - 3 years, and only 15 hours after that.

I'm confused.

So our nursery has a minimum number of days you can attend as part of the contract (3) and have a monthly charge above funded hours to cover unfunded hours and extras. It works out as £60 a day with funding.

It's quoted in the invoice as

"Consumables / Sustainability charge for funded hours, Universal 570 pa / 12 mths, Extended 1140 pa / 12 mths. Includes but not limited to food, snacks, drinks, nappies, nappy creams, sun cream, use of waterproofs, sun hats plus activities such as teacher led sessions, campfires, etc."

Are they saying they can't do this? And as far as i know is not optional at all.

This isn’t a new thing. The most stupid thing of all is the government promising funding and extra nursery places, but actually relying on the private sector to provide these. The private sector doesn’t want to and doesn’t have to! How many disused classrooms have we seen converted in advance of the September 30 hours? How many extra staff trained? Sweet FA. Good luck to anyone wanting childcare from September, is all I can say!

I don't know how nurseries have survived for so long as it is. The staff (at my childs nursery) are on minimum wage, even those who have been qualified EYPs for years. They put so much effort into the children and make their nursery experience a great one. It's not an easy job, I think it's a disgrace what they are paid.

The whole issue here is the Government trying to sell it as free childcare, rather than what it is, and what most parents would very much appreciate - heavily subsidised childcare.

Even more so since they have lowered the ages of the children eligible.

When the free places for education for 15 hours a week was introduced from the term after the child's birthday, the cost of the Nursery subsidising each place was more easily met from what they were able to charge parents of 2, 1, and under 1 yr olds. Since then, workplace pensions became compulsory, minimum wage has risen considerably, this year Employers NICs are increasing, plus Nurseries have been affected by the same CoL increases everyone else has - utilities and food being 2 big bills increasing. Don't get me wrong, I'm fully on board with workplace pensions and with increase in NMW, but the maths doesn't add up for the Nursery owners.

The bit that's changed is that invoices must be clearly detailed with any optional extras. And they must be optional.

The rest was in the guidance before, nurseries just aren't following them. I get why, I'm a childminder and this change will affect me. But some nurseries in particular make their invoices very complicated to understand and parents aren't sure what they're actually being charged for.

I signed local authority contracts for twenty odd years, the phrase used was 'free at the point of access' so you could add on extras but only is they were optional.

My understanding is that the extra £60 per day has to be optional, ie you don’t need to pay it.

I’m not clear on the rules around a minimum number of days.

Leaves nurseries in a very difficult position if parents start refusing to pay - presumably they can’t just ‘expel’ the children for this reason without potentially facing legal action?

When mine were young, it was normal for hours to be in set sessions. So they could do 8-11 free for example, but you have to pay for 11-6pm if you didn't pick up at 11am. Or indeed, having the second session as 3-6pm. As long as there's the option to pick them up between 11-3pm...

Childcare businesses and their CEOs are making huge profits off the backs of children and their parents. My sister's nursery charge between £4 & £8 PER HOUR as a 'consumables fee' for children who use the funded hours, meanwhile the company made 2.5 million in profits last year

Yep they've closed the loophole on split sessions years ago....

And quite possibly, lead to nurseries closing

Yes, they will either refuse to take 'partially' funded places or close altogether.

Interesting. The sustainability charge for funded hours does seem like it would be difficult to enforce. Wonder if any parents will raise it. They're an excellent nursery. But they continue to increase costs. It went up 10 percent in January and going up another 4.5 in April.

Guess the risk is they'll go fully private and won't accept any funding.

My childminder just subtracts the total funding amount she gets for us from our bill, so I know exactly what the council give her per hour.

It's about £12 per hour for under 2s (more than her hourly rate) and about £6 per hour for older kids.

Imo nurseries are just greedy. The funded hours significantly reduce our childcare bill, even on the lower rate

The change is they can't call it a blanket sustainability change. They need to break down on the invoices exactly what they are charging for and at what cost.

You can also Google and find council nursery/childminder funding rates across the country, if you're interested. They all pay a lot per hour for under 2s

She's not supposed to do that either. She's supposed to subtract the hours not the rate. Lucky for you it works out better but not for her.