Unfair nursery fee increase?

[Bexyla]

Hi Mums,

In despair at the moment at the hiking up of nursery fees!
Our nursery has not only increased the day rate by £11,but also shortened their “full day” hours and excluded breakfast.
It means that for the same hours/ meals as before,it is a 33% increase 😱😱
Really unhappy and I know a number of people have contacted the nursery but they don’t care (I won’t even get into what their profits were last year…)
I don’t really want to move kiddo elsewhere,as they are really happy - but I’m sure that “unreasonable” increases are not permitted by law,from what I’ve read.
How do I determine what constitutes “unreasonable”,and who else could I speak to outside of the nursery to raise my concerns?

Thanks x

Is it to do with minimum wage rising from April maybe ? It is an awful big hike.

What does your contract say about increasing fees? A business can increase their charges - nothing illegal about it so long as it’s inline with your terms and conditions.

A lot of nurseries are out of pocket with this 'free hours' scheme. The government are not paying them enough to cover wages and running costs and also as the other poster points out minimum wage is going up again.

I doubt very much there is anything you can do except either pay the increase or find other child care. I do sympathize though. But its a relatively short time of your working life.

Inflation is still significant, utility costs are high, food is very expensive and wages and interest rates are rising. Nurseries are a type of business that's affected by all these issues. I don't know how you are privy to their profits but they may have decided to maintain their margin or they may be struggling.doesn't really matter as either way you are unlikely to get a change. It's walk or put up with it I think.

Honestly, they can do what they want.

Costs of everything are rising.

You either pay their rates or move elsewhere. Can’t see any other options.
Minimum pay is going up by10%, elec and gas going up again in January, so they have to increase their charges.
I feel sorry for you, but all costs are increasing and you don’t have many options but to bite the bullet and find the money.

Is it a small nursery or one of a chain? Why are you so convinced they had huge profits last year?

Probably a huge chain. Possibly the same as ours who are hiking up their day rate by £7.50 a day soon. Genuinely might have to quit my job as I only just cover the fees as it is and we can't afford for me to pay to go to work. It's a huge chain mostly owned by an American private equity firm!

Can you say why you think ‘unreasonable’ increases are forbidden? I thought private companies could put up their prices as much as they wanted? I’d be delighted to be wrong!

Agree - what makes you think unreasonable increases are forbidden?

Contracts usually specify you have to be given reasonable notice of any change. If you have to give a month’s notice to leave the nursery, I would expect them to give you at least a month of notice of fee change and allow you to cancel the contract and leave without penalty if you don’t accept the new terms.

Can you provide breakfast and avoid that cost, at least?

Thanks for your messages.It was easy to find the information on Companies House regarding their profit last year.They are a medium-sized company - locally based with a few branches around.
In terms of the contract,I don’t seem to have a copy which is annoying so I can’t say too much about what their terms are - but they do state a minimum time for changes to contract which they haven’t stuck to themselves.
It was my husband who found something about UK Competition Act which prohibits companies from engaging in “unfair” pricing.
I appreciate costs are rising and I don’t object to a small annual increase - but this seems quite extreme and has taken it from being one of the more reasonably priced nurseries in the area to the most expensive.Yes - we could look elsewhere but we’d rather look into this more before disrupting our child’s care.I didn’t think there would be any harm in just asking other people’s understanding of this,but I’ll admit I’m quite disappointed by a small number of passive-aggressive “if you don’t like it - tough” comments.It’s attitudes like this that enable price hikes to continue.I have no issue with companies making profit (that’s what they exist for!) but 30% in one go just doesn’t seem right.Does cost of living not affect us too?!

and has taken it from being one of the more reasonably priced nurseries in the area to the most expensive.

Well, that is relevant.

If they were underpriced to begin with, they have maybe decided to go for one fell swoop rather than some now and some more in 4 months time.
People being paid less, need a bigger % increase to get their wage to enough for them to live on, than people being paid more.

After all, hasn't inflation been running at 10 - 11% ?
I know my dh's car insurance went up 61% this year (with no changes except a year's extra of no claims).

They are aware that NMW is going up
They are aware Utilities are going up again in the New Year
Mostly, they will be aware that the Government has promised parents across the Country "Free Hours" at their Nurseries, and the Government Funding doesn't cover the cost of the provision. So this will actually mean lots more Nurseries closing in the coming months, as the books just don't balance.

All that sounds harsh, I know. It must be a nightmare funding childcare when the cost of everything has shot up, but just pointing out all the Nursery costs have gone up too.

“It was my husband who found something about UK Competition Act which prohibits companies from engaging in “unfair” pricing.”

I am not 100% sure but I think this is more aimed at areas where there are only one or two providers eg train companies.

If there are cheaper local options and parents switch to these, that’s the free market working as it should…

Our nursery has just announced fee increases of £1.30 an hour, so £13 a day. We have 3 dc there so this is a huge amount each week that we hadn’t budgeted for when we signed them up there 8 weeks ago….

“In terms of the contract,I don’t seem to have a copy which is annoying so I can’t say too much about what their terms are - but they do state a minimum time for changes to contract which they haven’t stuck to themselves.”

If they have standard t and c, these might be on their website? But yes, if they are supposed to give 2 months’ notice of a change and have only given one, say, then you can definitely push back on this.

As far as I can see, for the Competition Act to apply, there has to be both a ‘dominant position’ and the cost has to bear no relation to the value of the service.

From what you say, there is no dominant position (since there are other nurseries in the area) and an extra 30% on top wouldn’t meet the ‘no reasonable relation’ requirement - they are allowed to make a profit and they can point at recent cost rises to justify the increase in fees.

The exact definition I found is:

A price will be deemed to be unfair and an abuse of a dominant position under UK competition law if it bears no reasonable relation to the economic value of the service supplied.

I can’t see the Competition Act applying in your case much as I wish it were the case.

Thanks again for these helpful and constructive comments.I’ll have a look to see if I can find some t&cs.
The Competition Law thing was just mentioned in passing,so I appreciate people taking the time to explain it in more detail.
When we signed up a couple of years ago,it wasn’t the cheapest option so I wouldn’t really say it was underpriced - but we were happy to pay a bit extra than the cheapest options for a nicer environment.Costs went up by 15% last year,which is broadly in-line with inflation so we didn’t think any of it.

Sadly,with the increase in prices AND the reduction of what this actually includes it means that the cost for the exact same level of care will now be an extra £20+ per day!!I do take on board the comment of giving them breakfast first - but it doesn’t save us much and means we’ll have to get them up very early to do this.They don’t always want breakfast at home that early in the morning anyway so I’m worried about sending them in hungry!

We are due to have our second child start there in a few months and,whilst we’d budgeted for things to be quite tight,this means that we’d be paying just under an extra £50 per day.It now exceeds my daily wage so my only option is to a) see if there is a way to challenge this (hence asking here), b) move nursery (not really what we want to do) or c) quit work entirely.

Even the extra hours coming in from April won’t make much of a difference now :(

That sounds so difficult- I really feel for you :(
We always wanted 3 children as well but it now looks like this won’t be feasible purely down to childcare costs.It’s really wrong that this is a deciding factor in planning a family…

We always wanted three ... down to childcare costs it's really wrong that this is a deciding factor in planning a family.

Why is it 'wrong' ? Sure it's tough that childcare fees are high but surely you factor in all costs when planning the size of your family ... housing, food, clothing, clubs, entertainment, childcare fees ... and don't forget to budget for Uni fees!

They are a private company so they can charge what they want, as long as it is within their terms and conditions

Isn't that what people do? Factor in all costs including childcare and education and any potential increase?

You have options- you may not like them (such as moving nursery or cutting hours). But fundamentally a £20 increase a day is not unreasonable when they are caring for your child. And breakfast is a non issue as they will still be given snacks etc or you can send them in with something, or feed them beforehand. Not as convenient but having children never is.

@Bexyla for many people, for a long time, three kids has been a tipping point that a nanny is cheaper, or one parent being SAHP.

For many nurseries it will be a case of increase fees or close. Sadly, this situation is about to get a whole lot worse with the governments 'free hours' election winning plan!

Yes - of course all costs are factored in along with considering unexpected expenses/ inflation - but the cost of childcare is the biggest expense for most households and annual increases that are well above inflation are not always something you can anticipate.
The UK has the highest cost of childcare in the entire developed world,so clearly something isn’t quite working here - it sounds like a combination of various things.Some people are perfectly fine with that and it doesn’t impact them as significantly in terms of finances,which is obviously a positive thing for them.But it’s not the case for everyone.
It’s not about “resenting” paying for care - obviously my kids are the most precious thing in the world - it’s the issue that the cost of the care actually exceeds my wages,essentially potentially forcing me out of work.