15 "free" hours of childcare

[jdey1969]

My son attends a nursery in Wimbledon. The term after he turned 3 years old, we received a reduced invoice from the nursery. However, I worked out that the reduced amount wasn't enough of a reduction for us to truly be getting 15 free hours. I queried this with the nursery and was told that they only reduce the bill by the amount that they receive from the Council, and not by the normal hourly rate that they charge. This is in effect a top up fee, which is forbidden.

I escalated my complaint to Merton Council who told me that if I persisted with my complaint, the nursery might be forced to close and then I'd have no childcare. I persisted in any case, as I don't like being threatened and complained directly to the Department of Education about Merton colluding with the nursery to find a loophole in the law i.e. by creating a 2-tier fee structure, they can claim they're not charging "top up fees".

Merton Council have now concluded a 3 month investigation. Merton Council have said that as the nursery only publish weekly and monthly fees, my conclusion that the hourly rate was simply the weekly rate/60 was not correct. Merton Council were satisfied that the nursery were refunding the amount that Merton had paid them (using the local funding formula) to me, so I was receiving 15 "free" hours of childcare at that rate. A provider was entitled to charge what they liked above the "free" entitlement.

What this means is that the Council could decide that they'd only provide funding to a nursery of 1p per hour, in which case my 15 "free" hours would be worth 15p per week during term time. What it also means is that parents who put their children in nursery for more than 15 hours are actually subsidising the 15 free hour scheme, by paying a higher rate than normal for those extra hours.

For example, if say your nursery charged £5 per hour for your child when they are 3, and you have your child in nursery for 60 hours per week, your bill would be £300 per week. Now, when the 1st school term starts after they're 3, you'd expect the bill to come down to 45 hours * £5= £225 per week. However, with a 2-tier fee structure, your nursery can say you were mistaken in the belief that you wer being charged an hourly rate of £5 per hour, actually, we've never charged for the 1st 15 hours, but we charge £6.66 per hour for the hours above the 15 hours. Your invoice is still £300 per week.

I am waiting to see what action if anything that the Department of Education will take against Merton Council, but for the time being, the government's commitment to 15 free hours of childcare for 3 and 4 year olds is untrue. Parents could end up no better off than when their child wasn't receiving any "free" hours at all. At best, it could be described as 15 reduced (at your Council's discretion) hours for 3 and 4 year olds.

But what about those people who can't ACCESS free state Early years education, because there simply aren't enough places in their town?

In my end of town, there are less than half of the required number of Early Years education places full stop, including Private Nursety places (and we have two large chain Nurseries, a smaller Chain Nursery that gives priority to Hospital staff, and one smaller Private Nursery to make up that shortfall, and still with the five local preschools there is less than half accounted for...)

The other end of town absorbs some of this shortfall, in their Private Nurseries, as the schools that end of town have attached Nurseries.

But then there are STILL around 25% of 3-4 year olds in our town with NO available place in which to take up their funded place.

So the private nurseries doing this in my town REALLY pisses me off. The local Nurseries are already full with DC's whose parents work, and can afford them (which most people NOT commenting to London can't, £22k is a good management wage in our town...).

This leaves the people on NMW or unemployed to fight over preschool places that are as rare as hens teeth.

To get a place at preschool, you need to have your DC's name down by January IN THE ACADEMIC YESR THEY ARE BORN IN. If your DC is born by the end of January, you won't get a preschool place until they are 3.5+. If at all, as DC's stay there till Reception.

Btw - can I have your £5.56 an hour costs for a private Nursery? We have to take up our DC's preschool place in the September or lose it. As my DS was born after Dec 31st, I have to pay £7 an hour PLUS snack money for a non-profit making preschool until the Easter holidays when he starts.

I'd bite your arm off for flat costs of just £5.56 an hour!

Ugh my typing is rubbish tonight and makes me sound illiterate. Time for bed...

Sending my son to a private nursery is not a lifestyle choice, as it would be if I sent him to private school. As other commenters have said there simply aren't enough state schools who offer nursery places, and those that do are only available for 15 hours per week.

The only poster whose told me she works and sends her child to a nursery place at a state school, employs a childminder. Childminders aren't necessarily a cheaper option than private nurseries and nurseries provide better socialisation than sending your child to a childminder, which is why the poster has decided to make use of the 15 free hours supplied by the state.
The poster has also said that they're no better off financially.

So, working parents are subsidising the 15 "free" hours system in proportion to how long they work, through increased fee rates for the unfunded hours. This is on top of the money that they're paying in taxes already, so is effectively a double taxation.

However you may feel about what people earn, it's what their net income minus costs that determines if they're rich or poor. There are many parents who have to make the choice each day as to whether to work or stay at home. With spiralling nursery costs, more parents are forced to stay at home.
The childcare costs are acknowledged by both sides of the political divide:-
www.telegraph.co.uk/education/9911581/Childcare-costs-more-expensive-than-Eton.html
www.guardian.co.uk/money/2012/jun/03/british-nurseries-threat-childcare-costs

Nurseries can't have it both ways. They can't claim as they often do that they're absorbing the costs of the early years funding, and that this is why fees to parents have spiralled beyond the means of most to pay, when as has been revealed by this thread, it is working parents who are subsidising early years funding not the nurseries.

If median pay is going down, and nursery fees are going up by more than the rate of inflation, explain to me how nurseries aren't making a profit? What additonal costs have they incurred this year that they didn't have last year?

Figure 4 reveals that median wages have slumped whilst nursery costs have skyrocketed:-
www.daycaretrust.org.uk/data/files/Research/costs_surveys/Childcare_Costs_Survey_2013.pdf

In real terms, nursery costs have gone up 77% over the last 10 years.

Jdey, do you think your own nursery is a very profitable entity?

The current system isn't fair to anyone -

The families who only use the free 15 hours rarely have any choice in the hours that are offered. The families using more than the fifteen hours are often charged more for the unfunded hours, not necessarily to make up the losses caused by the free hours, but to help pay for under threes places which are far far more expensive to provide. The staff are often paid a very low wage and smaller nurseries often struggle to survive if too many families take up only free hours.

My understanding is that the government is currently considering whether to remove all restrictions on charging top ups and additional fees as the chain nurseries have been lobbying the government for some time. If this happens, nurseries can charge what they like.

I don't expect free universal provision for three and four year old child will be available for much longer and the government will be able to use all the reasons above to say it isn't working. The law has already been quietly changed to allow the government to restrict free provision to disadvantaged children only and I suspect the recently announced 20% tax breaks per child will be instead of NEG funding for working parents in the future. I hope I am wrong.

@TheDoctrineOfSnatch. I can't see how they wouldn't be making substantial profits. Staff are paid a pittance. The nursery has been established for 30 years, so their property costs are probably low to non-existent. They've passed on the costs of the 15 "free" hours by hiking costs to parents who put their kids in for longer. The Daycaretrust recently revealed that nursery fees have gone up by 77% in real terms over the last 10 years.

With skyrocketing fees and no obvious increase in their costs, they must be making substantial profits.

See, if I do the calculations on the nursery I use (x number of staff, x number of children who are rarely full time, manager, owner, meals, activities, rates, mortgage/rent, utilities, maintenance) - I do not believe there is much profit margin. Ours is quite a small nursery.

77% increase in 10 years is just under 6% increase a year. Food, utilities, and rates have all risen in that time. I'm not sure when in that period the 15 hours came in - I know it used to be 12.5.

77% in real terms i.e. after inflation (which includes increases in food, utilities and rates etc.)

Some nurseries will struggle where there are a lot of children just there for the 15 free hours.

That's not the case with my nursery.

OP - what happens in Merton ime with peers who work and want to take up a place at a state nursery, they actually end up paying more because they still need to pay for the full time nursery place, but no longer get the contribution from the council for the education aspect because that's being used to fund the state nursery place.

People who can afford to choose to do it because they think it's good for their child. Those who can't afford to, don't, and just stick with full time nursery, but then it can be quite hard on the dc as all their friends are doing something different for several hours a day.

Oh, and I've just remembered that my private nursery is in Wandsworth, so it's their contribution we get, rather than Merton's.

However, I definitely paid the difference when DS was just going for the 3 hour sessions, so there was no apparent subsidy of my child by other parents. So my invoice shows the standard amount that anybody with a child at the nursery would pay for the hours I've used, and then deducts off the council's contribution.

BTW this debate has been around since the scheme was first introduced. I took the view that I like the nursery, I can afford to pay the difference, so I go for it.

Obviously that's a choice I have because DH and I can afford it.

Fwiw, my dc went to private nursery in Merton, full-time, and they had no problem taking off the 15 hours a week

According to Wiki FT wages have gone up by 33% from 2002-2012.
Not that I want to debate numbers.
Most the preschools I've been involved with charged less per session for unfunded children than they were paid by the council for funded children; they couldn't survive under any other business model.

Yes children are expensive & no UK govt. is going to fully subsidise childcare.

isitmeor there previously wasn't any mention of state nursery places being an issue. Of course I realise that Merton doesn't have enough aces and that I agree is an issue.

What I, and others, took offence at was the comment (that has bee quoted a number of times) and unemployed parents and benefits. I was merely pointing out that this wasn't the case. However the OP has point blank refused to further comment or apologise for that statement.

Had the OP said they had applied and failed to get a place then that is a different matter. As i said before I agree the scheme is flawed as it stands, but I think that what will happen if pushed is that the private nurseries with just withdraw completely. Then it will be simply a lottery for those that apply and get a place.

Someone asked about childminders - they cn apply to be part of the scheme if registered with ofsted I think and can then provide the 15 hours if education.

Figure 4 here compares increase in median wages against nursery fees over the last 10 years:-
www.daycaretrust.org.uk/data/files/Research/costs_surveys/Childcare_Costs_Survey_2013.pdf

Real median hourly average earnings have plumetted since 2010 and are now virtually on a level with what they were 10 years ago. "Real" means after inflation. Not sure how much inflation has risen over the last 10 years, but 33% is probably likely.

Nursery fees were going up in line with wages up to 2010 but have continued to rise in real (i.e. after inflation is taken in to account) terms since. So nurseries have certainly been boosting their profits substantially over the last couple of years.

A business trying to make a profit. How awful!

You also have to take into account people now expect much more from their nursery. Staff do a lot more training in a variety of things now, most nurseries now have numerous items if technology to support children's learning and in general patents expect more. This all comes at a cost.

OP with your shop analogy you are effectively wanting to use the "discount" at a more expensive shop but still get the same number of items, but expecting none of the shortfall to be passed onto other consumers.

The reality is that the government don't pay enough per hour to cover the private nursery costs, so who exactly are you expecting to make up the shortfall? You're bonkers if you're expecting the nursery to absorb it. They don't have to offer funded places and if they're forced to take a hit on their profits to offer it then why the fuck would they bother?

Technically they can't charge top ups and can't charge the parents that only use the free places anything, so the shortfall must be borne by the fee paying parents. Everyone knows this is the way it works.

I believe our nursery gets round the no top up rule by charging different rates for part days than they do for full days (so 2* part days is more expensive than a full day) and then there's a higher hourly rate for additional hours on top. Personally I would rather see transparent top up payments.

And I know for a fact that my DD's nursery do not make massive profits.

MrsHeggule agree that was an ill-advised remark by OP.

But for people relying on full-time nursery, they effectively have to pay to take up the free state nursery place, so it's cheaper to stay at a private nursery and get the contribution.

I think all this is an artefact of the system whereby central government gives a grant to local councils, who also raise money via council tax, but we still want to be able to have national entitlements, despite inevitable local variations.

As far as I know, exactly the same happens with "free" nursing care in England (which I think is in fact a flat rate amount, but private care homes charge different rates for the service) and "free" personal care in Scotland (which is only free if you can find somewhere that charges at or below the standard rate).

@trixymalixy. I was certainly unaware that fee paying parents are subsidising the "15 free hours per week, 38 weeks per year " places at private nurseries on top of paying for the scheme in the first place via our taxes.

How would you know this until you become a parent of a 3 year old and start digging in to the figures?

The scheme obviously encourages 1 parent to stay at home. There's always going to be families who are weighing up whether to stay working or stay at home. With the additonal costs that they're being forced to bear to subsidise this scheme, their choice will be be to stay at home. This will increase the costs further to those fee paying parents, causing the next one in line to have to stay at home etc. etc. until all families have 1 parent working at home.

I think we are saying the same thing. I wasn't at a private nursery and my childminder wasn't registered to take the 15 hours and tbh I wanted DD to attend the local school nursery as I felt she was ready for it, and would enjoy the school style dameans meeting other children (which she does). I didn't send her because I wanted to save money on my childcare - the provision is for education not free childcare. I don't get any saving whatsoever, I pay the same price per day as before.

For me it cost the same to not take up the provision or take it up. For those at a private nursery you are lucky enough to save some money taken off your bill. So actually those people who have full time childcare at a cm, not registered to provide the 15 ours of education are the worst off.

I think that the scheme probably won't last much longer in all honesty, or private nurseries won't participate. There is no money going to be put in from govt. 6th forms attached to schools have just had their funding slashed to make it in line with 6th form colleges so I imagine, like the current scheme for 2 year olds, they will means test it, or only offer it to those children that really need it.

jdey I don't agree the scheme encourages one parent to stay at home particularly. There are loads of parents who both work and just accept a reduction at their nursery, use ther childminder, or just don't apply for the optional hours.

Had we been unable to make it work with out cm, DD simply wouldn't have gone/used the hours. I can't see it would have been terrible for us/her.

It is preschool education not childcare.

The amount the government pays per hour is very low. It makes it difficult to run a preschool as a charity, even with peppercorn rent for a school building, packed lunches from home an donated snacks. Am not at all surprised that private nurseries, who have higher overheads and a need for a profit, have higher charges.

Whether the way the charges are advertised a d billed is fair is another matter.

FWIW its common round here to use a childminder to cover before and after preschool hours. This originally cost the childminders a lot of money as they had to hold the space open but didn't get paid while the child was at preschool. They now charge a retainer to cover those hours.

@MrsHeggulePoirot. Yes, I don't really understand why you would wish to pay a childminder whose not registered for the scheme. Why not just put them in a private nursery. A private nursery should be cheaper just because of economies of scale.

For working parents, you only have a choice of childminder and private nursery. You can choose to also make some use of a state-run nursery but you couldn't fully rely on that option due to the restricted hours. If the government is serious about wanting all parents to work, they should fully fund early years care from 0 to 4, in my opinion. The costs to general taxpayers would be offset by the revenue generated from income tax and national insurance.