Is my nursery overcharging?

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Hi,

First post to mumsnet, sorry if this is going over a well worn topic (which Im sure it is), but Im looking for some opinion on whether the way m nursery is implementing the free hours is correct.

Firstly, Im not wanting to diddle the nursery out of money, and I appreciate that the amount the council pay my nursery per hour is less than they charge, so although you should get a certain amount of "hours" free, Im happy to consider this difference in money and make allowance for the nursery on that side, its a nice place and I wouldn't want to see them suffer due to making a loss on these hours.

That being said, my simple maths seems to suggest they are buring the candle at both ends.

The standard day is 10 hours. The cost for a day is £47 fully inclusive of meals. I make that £4.70 an hour.

I note from the councils publications they pay the providers £3.92 an hour.

The 15 hours a week for term times is allowed to be spread over the full year, so they give 11 hours per week. My daughter attends 3 days a week.

For the month of September the nursery is charging for 12 days. (4 weeks @ 3 days).

At full price that would be 12 days at £47 = £564.

If the nursery deducted a straight 44 hours, disregarding the difference between what the council pay and what their usual rate is, then they would be deducting 11 hours x £4.70 = £206.80, so the final invoice should be something like:

Full price: £564
less 11 hours @ 4.70 (£206.80)
Total: £357.20

Even allowing for the nursery to deduct from the invoice just what the council pay them (meaning Im paying the top up to the standard rate), I would expect the invoice to be:

Full price: £564
less 11 hours @ 3.92 (£172.48)
Total: £391.52

However, in actual fact, the invoice is £446.33

Can somebody help here? Am I going terribly wrong in my maths, or are the nursery actually burning the candle at both ends here?

Many thanks for any help or advice.

Have you asked them? Just ask them how it's calculated. Maybe you pay for extras like meals etc.

The hourly rate will be slightly less I think with a separate cost for meals.

Well clearly you need to speak to them asap.

I believe that nurseries are not allowed to charge a 'top up' per hour, the free hours have to be free.
So nurseries are having to make money in other ways e.g. Charging for food, nappies and wipes, admin costs etc.
Ask for an itemised bill.

Yes I would expect they are adding on meal costs for the 2 or 3 days they are allocating you free hours!

Do they charge extra for food?

Have you signed up to any e read like French or music lessons?

The 15 hours is term time only, will your child also attend during school holiday time?

If so then the fees are worked out with this in mind. They divide the full time fees for the non term time and add an equal amount onto each months payment.

Free hours are term time, only 38 weeks of a year so maybe it is that. Just ask them.

Do they only offer 3 free hours per day so if you're only doing 3 days could you only be getting 9 free hours?

Our nursery sent us a really clear table to explain the free hours (15 or 30) and how they charge outside of that. They spread it over the whole 52 weeks, the free hours are between a certain time (so you do pay for a couple of hours each day but it's open 8-6), and then there's a daily supplement which covers the external activities they run (yoga, music etc).

You should ask them how they work it out, everywhere seems to do it differently so it's impossible to guess.

The nursery I use for DD charges an hourly fee of £6.50 per hour if they are hours used to make up a session where the rest is paid for by government funding. So while a whole day would be £50 for 8-6, if you used 7 hours of funding that day, you'd pay £6.50 per hour for the other 3 hours (so £19.50), not 3/10 of £50 (i.e. £15). I don't know how your nursery does it, but it might be similar.

You need to talk to your nursery. Some nurseries charge more if you are not paying for full days (which you might not be if using a mix of funded and not funded hours) - they might only allow you to use a max number of free hours per day - so you don't get 15 hours if you only do 3 days. They might charge for lunch / activities / early or late hours. All would be legitimate. No one but your nursery manager / admin can possibly explain the bill to you I am afraid.

Hi Thanks for all the swift replies.

The standard cost of £47 per day includes meals. Any extras such as weekly "funky feet", or swimming lessons are invoiced as separate items.

This is the first term my daughter will be eligible for the 15 hours, so this is our first invoice where they are deducting anything. previously the invoice was £47 x No. of days. Plus any extra items like the funky feet etc.

My Wife questioned it yesterday, but she isn't overly confident in challenging things when she thinks they may be wrong. The words given to her as an explanation were "it doesn't add up as you think because we don't get as much from the government per hour as we normally charge"

When she told me this, I was sure that nurserys were not allowed to charge any top up fees etc. Indeed the level of funding is why many nurserys are considering their future, and some are not offering the funded places at all, or have already gone bust.

I wouldn't want this for my nursery, which is why if they are charging me a "top up" by stealth Im not bothered, just as long as they are doing it fairly.

From what I can see, if we didn't claim any free hours at all, then 12 days per month would cost 12 x £47. £564 and that includes all meals. That's what we paid last month.

However now she gets free hours, then the nursery are charging me £446.33, and also receiving £172.48 (44 hours x £3.92) from the council. A total of £618.81.

So in they are getting £54.81 more for exactly the same number of hours/days now we are eligible for a funded place.

Its a large-ish local chain, so Im struggling to reason that they could be doing this deliberately to play the system, but stranger things have happened.

For info the invoice in its entirety is this:

From memory one of my first terms was less than I expected because of the summer holidays and how the 15 hours divides up for that specific term, it then went up on the next term as it had more school weeks - could this be it?

I haven't worked out all your figures and obviously the only way to find out for sure is to ask the nursery but £47 for a 10 hour day is unlikely to be a simple £4.70 per hour.

It's more likely to be, for example, £37 for the care and £10 for meals giving an hourly rate of £3.70.

Ask them to break it down for you

Just seen your latest post, my estimate of £3.70 per hour for the care is about the £3.92 free amount so the balance is for the meals.

Sounds like it might be about right

Just seen your latest post, my estimate of £3.70 per hour for the care is about the £3.92 free amount so the balance is for the meals.

Sounds like it might be about right

Your maths is wrong because the school term doesn't begin on 1 Sept.

Sandy Denny,

That still would make it wrong though.

If they deducted the care rate of £3.92 * 44 hours, it would be a deduction of £172.48 from a standard month of £564, meaning a total invoice of £391.52, whereas my invoice is £446.33

12 days a month without any funding is £564.
12 days a month with 44 hours a month funded is £446.33

The actual deduction they have made is just £117.67. If they have deducted 44 hoursThis would mean a care rate of £2.67. and a food rate of over £20 to make the invoice correct.

I shall chat to them this evening and find out exactly how they are calculating things.

The funding is only paid for term time. Our nursery calculate it based on how many weeks are in the month rather than splitting it by 12.

August has 5 weeks
September 4 weeks and so on

Do you not have a financial statement or contract in your paperwork that shows how they calculate the monthly invoices?

Or provider allows the funded hours to be spread over the whole year rather than just term time - hence the 11 hours on the invoice attached in one of my posts.

Off to the nursery now, so hopefully all will be explained in the next hour. I shall post back to advise what they say.

The way they calculate the monthly invoices is a mystery to myself and all other parents - that invoice above is as detailed as it gets for us.

Just to back up the OP, under my council funding is either 15 hours per week term time only or 10 hours throughout the year.

I believe some places say the hours have to be spread over different sessions (am/pm) or days. As pp says it may well be that they will only allow 3/5 of the funding from your bill if dd is only doing 3 days.

If you calculate it that way does it add up better?

Yes, doing that way it comes to your bill being around 460.