Top up fees

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Our nursery have said from April we will be paying £1.40 an hour each hour our daughter is in nursey because they are not getting enough from the government for funded hours..for the younger children not her, so our hourly rate has had to increase.
So we will paying three times as much even though we had to wait until 3 for any funded hours..spending ten of thousands, surely this can't be right?!

Where I am, our nursery is expanding by opening a second nursery a mile away, and others are expanding too, because the demand has increased because of the funding changes. Its given them lots more business

my two year old is eligible for 15 hours free childcare from april. However the nursery are putting up their fees by 10% as of 1st april (they also put them up by 10% in jan 23) and they will be charging a ‘daily contribution’ of £12 per day. So i will only be £43 better off a month not the £480 reduction i was expecting! They charge £7.33 per hr for two year olds and will be getting £7.95 per hour funding from the government. So why this extra charge??? I would be happy to pay a charge if the government funding didnt cover the usual hourly charge but it is more! The nursery is amazing and my boy loves it there so i am hesitant to query this with them, however it doesnt seem right.

My DD was eligible for the 30 hours from Jan; weirdly the extra I pay for her to attend has gone down (only very slightly) at the times the fee increases for May because the government increased the subsidy they were giving at the last budget.
OP - if I recall, Jeremy Hunt put an extra £500 million into the scheme in the budget about 3 weeks ago. Maybe worth asking your nursery about this?
I will now be paying £90 per month (down from £100) for my DD to attend 3 days a week, term time only. (Inclusive of food). I'm paying £331.50 for my younger DD to attend the same days/hours, but she gets the new 15 hour subsidy only. I'm in London. Do realise I'm very lucky, and would be a lot more if it was not just term time only.

Do you know that's defo their hourly fee. The fees vary by local authority and aren't the same as the published gov fees (if that's what that is) the LA takes some. For example ours is £6.90

I checked based on our area yes but wasn’t aware the LA takes some. How do i know what actually gets paid to the nursery?

A lot of settings would have been putting up fees anyway in June without the 2 year old funding due to minimum wage increases. This then causes the on-costs to be higher etc..... that coupled with the under funding of the funded hours has given a double whammy for parents.

But with the latest increase in funding from the government i dont think they are under funded anymore, not going by the rates i have seen. I pay £7.33 and hour and the funding is £7.95 for our area? Unless the LA takes some like another user has posted, if that is the case i would like to know what the LA cut is.

The local LA takes at least 5% from each funded hour. This is all LAs.

Think of what has gone up in your household rent/mortgage, food bills, utilities, council tax etc..... all settings will have these increases plus the possibility of business rates. Factor in wage increases, NI increases, pension increases etc.... and you honestly can't see why settings are struggling?

If you feel you are being ripped off, move to another childcare setting. You may be disappointed that they will all end up increasing costs be it now or further down the line.

Edited to add. You are also looking at just the 2 year old funding at that rate. 3 and 4 year old funding will be way lower, and nor.ally goes nowhere near covering what it costs to provide that place. They have to balance it over the whole cohort for the business.

I have just read that the LA must pass on at least 95% of the funding rates to the early care providers. That said it still more than covers the hourly rate. I have also checked the under 2 rates and they get £10.33 funding but charge £7.45 so they are funded way over for under 2’s. The only exception is 3-5 year olds where they are funded £5.47 but charge £7, however this is more than covered by the over funded for under 3’s.

they have put up there fees by 10% to cover inflationary costs as they do each april, therefore i still feel the £12 contribution per day is not justified.

if the funding from the government didnt cover their usual rates i would understand and accept the daily charge as they should not lose out, but that is not the case.

I do not want to change nursery as they are exceptional and this is no way criticism of the care they provide, however i do disagree with settings increasing their profit margins by imposing charges they shouldnt be.

How many hours per day are you attending, vs the full day rate? If you only attend 6 hours, but the day rate is say £80, they are still losing, as they can only charge the hours the child actually attends.

My son attends 9 hours a day over four days. All of those factors including the half days/lower hours children attend, staff costs, bills etc is all taken into account when setting the hourly rate they charge. As with any business they work out their fixed and variable costs and revenue and adjust the hourly rate they charge accordingly at the yearly price review (our nursery review fees every april).

However i do appreciate before the recent funding boost (and adjustment on staff to children ratios), nurseries were being asked to offer free hours and not get the equivalent cost per hour, so many would apply additional charges to cover the difference or just simply go out of business. Whilst i think this was not strictly legal (see this case outcome https://www.nurseryworld.co.uk/news/article/local-government-watchdog-warns-nurseries-over-top-up-fees-for-free-entitlement ) i would be happy to pay to make up the difference if it meant ensuring the business would survive. But since the funding boost and adjustment to staff to children ratios i feel the charges aren’t justifiable and parents already struggling should benefit from the free hours on offer. This is for my particular situation where the funding is higher than the nursery would get privately.

According to my nursery the rates for 2 year olds are not above their costs, but the rates for 3/4 year olds is under, so nurseries even it all out....