Government payment to nursery for funded hours

[forwardsandbackwardsandup]

Our nursery has changed owners and the fees are sky rocketing. I have found what I think is the answer online, but hoped a nursery worker might be able to confirm. How much can the nursery claim from the government for the funded hours? We're in Scotland and I found info saying £5.79 per hour and £3 for lunch for our local authority. They are charging us £50 per day for 10hrs, so does that mean they can only claim £50? Or that they're getting £60.90 (£57.90+£3)?

I've read threads saying that govt contributions don't cover their costs, but in this case it seems they do? Appreciate it might be different in different parts of the country. They are wanting to add on fees of £3 per session (each half day) for funded sessions only to cover resources. Trying to work out if they really need this to cover costs or whether they're money grabbing chancers!

When the funded hours started last year I paid nothing over and above them. Now it's £60 a month. Does no one else think this is a massive leap?

I do think this is a massive leap to you. But I also think the nursery was undercharging chronically before (see calculations above about the ‘free’ hours) and so it’s no wonder there’s a new owner. Anyone who was paying £0 and now has to suck up £60 is going to be annoyed. But the issue was that it was never £0 in the first place. And presumably you paid much more before the ‘free’ funded hours so you’re still better off than before your DC was 3.

"Perhaps I've been naive in believing that the funded hours truly meant free. When the funded hours started last year I paid nothing over and above them. Now it's £60 a month. Does no one else think this is a massive leap?"

I don't think there's any one in England not paying a top up, so probably not anyone who is shocked on this thread :)

Put another way, would you rather pay £112.50 a week for 14 weeks of the year (£487 per month for 3 months) and £0 the rest of the time, or £60 a month for 12 months?

I’m in England rather than Scotland but I get paid £2.55 less than my usual hourly rate (which is in no way ‘just shy of a fiver’. For a child doing 30 hours that means I lose £76.0 a week, £306 a month and, over the course of the 38 weeks I would lose £2907. That is a staggering amount, then times that amount by however many funded children I care for.

Would you expect that kind of pay cut? No! Expenses also take at least a third of my earnings and this year will be even more due to the cost of living crisis. Then there’s the fact I pay tax which in itself is helping other people access the funding in the first place. I’m already paying towards the children I care for, why on earth would I foot the bill even more!

This is all helpful information. I don't resent paying for childcare. I resent my bill going from zero to £60. Yes, it was previously much more before the funding kicked in but given that my mortgage has just gone up, energy bills and food too, it's not like I'm sitting on pots of cash denying the nursery crumbs.

The nursery is open 50 weeks a year so 22.5hrs a week is actually 1125 hours per year. Can't imagine they'll be offering up the 15 hours we're short.

For anyone who is a childcare provider, why don't you get the full quoted rate? I found the figures for England and outside of London the average was £4.81, so why the £3.40 or £2.55 I've seen people quote? Where is the difference going?

You could argue why on Earth would the owners take on a business if it's such a bad money maker? I think this is why I'm suspicious tbh. The ladies who work there are wonderful with the kids and I don't fault them for a second, the new management I'm less impressed with. Or maybe it was the old management who as PP said we're chronically undercharging.

I'm trying to get a full understanding of how the funding works before speaking to them. Another parent had issues with them for other reasons and said she was considering removing her child. They said ok fine 1 months notice please. Presumably better for them to get a new child in at increased fees. Doesn't make you feel very valued as a customer.

1 months notice will be in your contract too. It's standard to have to pay notice in nurseries

This might help you see it from the business POV? www.pacey.org.uk/working-in-childcare/spotlight-on/30-hours-funding/information-for-practitioners/

"Presumably better for them to get a new child in at increased fees. Doesn't make you feel very valued as a customer."

You may not know but there are long waiting lists for nurseries at the moment, so yes they do have customers that are happy to pay!

"They said ok fine 1 months notice please. Presumably better for them to get a new child in at increased fees. Doesn't make you feel very valued as a customer."

Why wouldn't they prefer this?!

"£2.55 I've seen people quote?"

I think that was a £2.55 shortfall, so maybe the provider gets £4.45 and charges £7.

@yetii yes I understand the concept of needing to give notice. It was more the way the owners said ok fine just go, rather than trying to resolve any issues and work together for the good of the child. In this case the problem wasn't to do with fees.

Oh sorry misread there

Well yeah. She wasn't happy so they told her how to leave!

I resent my bill going from zero to £60. Yes, it was previously much more before the funding kicked in but given that my mortgage has just gone up, energy bills and food all those things have gone up so why is it such a surprise the childcare costs have?

Indeed. A business not a charity. They'd have been as well saying cheerio to all current parents from the outset to make way for new higher paying ones.

@zorgoid because I foolishly believed that funded meant free, as it had done until that point.

There will have been a discussion about how to step the price increases to have a balance of attrition vs retention of current customers, taking into account speed to replace them with the waiting list.

It isn't great that they aren't solving a non fee related problem, TBH. But anyone buying a business will be taking a look at how to make it work long term, financially, with some reserves for e.g. refurbishment or whatever.

Doesn't make you feel very valued as a customer.

A private nursery is a business. The Gov may give them £5 per hour for your child but if the nursery decides that they want to charge £7 per hour than the £5 Gov contribution is just that . A contribution towards the cost.

Also stop saying that you are paying aomone to "look after your kids".
Nurseries and preschools do so much more than that. Everything your child does is planned weeks in advance.
Something as simple as painting requires a full planning sheet to explain how it matches up the the EYFS framework and why it was chosen. The materials used and why those materials. Which children you plan to include in the activity and why. How this activity will be beneficial to each child in line with the framework and personal goals for that child. As well as a full risk assessment.

Once the task is completed staff then have to evaluate the chosen activity. What would you change? What benefits/negatives? Will you do it again? Followed by adding an evaluation of each child in to their folder explaining how that child reacted to the activity. Did they react how you expected or not? Were your assumptions about how they would benefit correct? etc.

All that for 15mins of painting. And for every activity a child does in a nursery.

Oh and most of that planning is done during a nursery workers lunch or break ( or the very lucky days where all of our charges are napping at the same time) due to not having the staff level to do it in working time.

Thank you. It looks from this that the council must pass on 95% if the funding to the provider, so £5.50 rather than £5.79. So I feel my initial point still stands.

It also mentions no artificial breaks in the day. My older contract is still in place, but I know new people are having to pay for 30 mins time over lunch to join two sessions together, which sounds like an artificial break to me?

Ah. No I don't think that's foolish. That's the government trying to spin something. Then people realise it isn't as good as it sounds and are disappointed. They'd be better from the outset saying look! We can help with your childcare costs!

Not sure when the £5.79 (less up to 5% for the council admin) kicked in, but if your nursery was getting that for much of 2022 whilst charging £4.60 per hour, then they were also "profiting" (though I suspect they were undercharging at £4.60ph, especially after Autumn utility cost rises and interest rate rises on any borrowings)

I don't think a lunch break is an artificial break, stemming from e.g. a council nursery provision that might have a morning session and an afternoon session.

Fundamentally, whilst in your very specific case, funding per hour is pretty close to charges per hour, the sector as a whole is underpaid by the government funding, but any given nursery knows it cannot be a provider who refuses to allow government funded hours, as they do help parents meet the costs.

It would be far better to be able to transparently charge the difference between government funding and private charge per hour (which might act in your favour in this individual case). But as that is not allowed, charging for extras has been the practice for years.

Without some kind of additional charge, many settings would fold. There really isn't widespread profiteering going on.

Someone complained earlier when I referred to it as education. Now you're saying I shouldn't call it "looking after my children". Can't win. I don't believe I should be paying for eduction, but understand the need to pay for childcare. So which is it? Both? In which case fine I'll take 9-3 in education and an hour either side of childcare. That would be a much more transparent way of doing it.

Why are you so determined to believe the worst of your childcare provider? You've had so many people tell you the reasons your costs have gone up, yet you're still going on about the rise in cost being so unfair, and that they must prefer new customers over old. Maybe they just can't be bothered to argue?

The cost of everything has gone up. It sounds like the previous business wasn't working out, so it's hardly surprising the new owners have changed things.

Ultimately it's a private business, partially funded by government. If you're not happy you can go elsewhere. It costs us £650 a month to send our son to nursery four days a week (and I don't begrudge it, they're brilliant), 9-6pm. Before 3 it was £1100. Your quibbling about £60 is quite ridiculous.

Why shouldn’t you be paying for childcare before your child starts school? Especially when 30 hours are already free? Do you realise life isn’t free and if you were not paying for your own kid somebody else would be, either directly or indirectly?

MN is bonkers!