40% fee increase - can it really be justified??

[Honey2]

Hi all

My nursery have just increased their fees for the new FY following the government announcements back in Feb.

I was expecting an increase but am totally shocked at 40%!

For an 8-6pm day the rate has gone from £78 to £110. They have also increased the charge for food from £9 to £14 per day - this is for a 2 years old!

I appreciate the increases in NI and minimum wage, but I just can see how they can use that to justify 40%?

They did this with no warning or consultation. It’s likely many of the parents will need to cut hours or move to a new setting following this change.

any others experienced a similar increase?

There is the additional factor of they can't charge for nappies, food etc. for government funded hours.
I think a lot of nurseries will come out of the government funded scheme totally or go under. Well done Labour (not)!

Ours is a non profit charity and fees for under 2s are increasing from 1350 to 2000

(For 45 hour week - fee per month)

How are people going to afford to work ? And they wonder why the birth rate is falling , coz parents literally can’t afford to have children AND carry on working .

Nothing useful to add but good grief! What is wrong with this country? £14 to feed a year old?! £70 a week?!! Over £2k a month per child for care?!

This is a misunderstanding. Settings can change for food, nappies, French lessons or whatever. Anything that isn't basic eyfs ciriculum.

The invoices must be itemised though so parents know what they are paying for.

£14 per day to feed a 2 YO is ridiculous, especially when you're also already paying for care. Are you allowed to send a packed lunch? If not, it's just an additional increase by stealth.

However, when did they last put up their rates and how do they compare with other local nurseries?

If they've not passed on previous increases in NMW (which were substantial a couple of years ago). I think there were 2 years in a row when it was around 10% so with the NI increase, their staff costs have probably gone up 30/40% in the last 2/3 years and possibly even higher if they've increased pay to above NMW to keep staff.

Plus they could have seen other increases such as business rates, interest rates if the business has loans and utilities - depending on their contract, the latter could have gone up 2/300% in the last few years.

Ultimately, they need to charge a certain amount to stay in business. And it could be worth the risk of losing a few DC, which means less work for the same/more money, especially if it improves their ratios/they can cope with fewer staff. If they're full or have a waiting list, it's probably a good business decision. Unfortunately, childcare is provided by private businesses in the UK. Their purpose is to make a profit, not provide an affordable service. Your anger should be at the system that allows this.

Wasn’t it the Tories who brought it in?

I mean the extended funding scheme. The NI increase was indeed Labour.

Indeed - and underfunded for years.

Though that's not to say that a 40% increase isn't ridiculous. Perhaps you could speak to the other parents and challenge the nursery collectively about the increase. A quarter of that might be reasonable.

It’s insane, most people can’t afford 2k a month.

https://www.thetimes.com/article/f14aec24-3303-4c06-b40b-94a0ec3add15?shareToken=a32095cea67ef021137b254c0ea7f896

The NI isn’t only increasing, the threshold is also almost halved,

an example - an employee on 40 hours (our nursery staff work this) previously earned just under 24k with an additional £1,910 NI cost.

that same employee now costs the business £25,400. Plus £3100 in NI costs,

overnight 1 employees costs have increased £2500. The nursery we use has 14 employees, around 10 of those are over 21 so £25k a year in cost difference from tomorrow.

Our nursery was £110 a day two, years ago. Now it’s £127. I have tried a couple of childminders in the past, one wasn’t great in terms of child development and the other was not reliable enough. It’s a chain brand nursery, nothing fancy. I’m happy with the level of care. We’re in Surrey, not high earners so it is a hit but so are the house prices round here if you don’t want to move away from family. We’ve just got to suck it up until school starts. Looking forward to having spare cash again one day and maybe getting my nails done.

Thanks for the comments all, I agree the government has made it very hard for nurseries.

@Bjorkdidit Unfortunately I think the nursery will find that parents many will look for alternatives in the local area.. at the moment it doesn’t appear that other nurseries have made the same steep increase. Shame that they would then have to lay off staff if they don’t have enough children to justify the numbers.

btw I’m not in a city - just a rural community in the SW. Nursery also ask for all consumables like nappies, wipes, suncream etc to be sent in so the fee isn’t covering anything but care.
they also put the fees up every year at this time - this isn’t a 2 year rise.

I think the idea of checking in with some of the other parents is a good one and seeing if there is a consensus that many of us might need to move / reduce hours. Partly why I’m so annoyed if the lack of communication and explain why it’s so much!

I would provide all food too as you could do it for a lot cheaper than £14.

Nurseries are totally screwed. Sounds like your's is desperately trying to find a way to go on. It'll probably close down soon.

14 pounds a day for food is ridiculous. The amount of Tesco meal deals I could buy with that.

Then it’ll close, though, and demand will increase for the other nurseries, so they’ll increase their prices.

Parents cannot win.

I think the main things that need to change are -
The government needs to fund 52 weeks a year. The term time funding system is built from when funding was meant for education. Now it’s being used for childcare. It has to reflect this new need.

The government has to pay what the place costs to deliver as childcare not just education.

Parents should be paid directly in a way that the money can only be used by childcare providers (ie through their child tax accounts or similar)

This would reduce the splitting of hairs for what the money is for, nurseries can decide their price as a business and parents can just pay it from the money the government gives them for childcare. If they need to top up from their own money at least they can make
a decision as to what nursery to go to.

At the moment the admin around the funded hours is crazy and the system as it is suits neither parents or nurseries. Government agenda
definitely seems to get all children into schools though.

You can't see how they are passing on the increases they are facing? Really? What do you expect them to do?

I don’t have a badly paid job but I couldn’t justify working if I had to pay that per day. 40% with no warning is just asking for parents to remove their child - is that their plan that they actually want to close?

So£124 a day for 10hrs £12.40ph roughly

def time to look for a cm

Nurseries would always be hit hard by NI increases.

I really feel for everyone impacted

£110 in the South West! What county? We charge £65 8-6 and that is fully inclusive (food, nappies etc..) Is the £14 on top of the £110? Times are hard for nurseries but that is very, very high.

The increase in childcare ‘free’ hours started under the Tories and they didn’t adequately fund it either.
Theres no pleasing some people.
When my DC were at nursery they were no free hours or contribution from the government. You could salary sacrifice to buy childcare vouchers which saved you a bit of tax, but that was it. We paid nearly £1000pm in 2004.