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Needing Clarification Please


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Hi,

 

okay, in cheshire we get £8.41 per funded session (2.5 hours).

 

The director has seemed to worked fees out in ten million different ways since they took over.

 

now they are telling me that although we claim £8.41 per 2.5 hour session through NEG, this only equates to our hourly rate. so for example say our hourly rate is £2.50 then a child claiming 2.5 hours would cost (using our hourly rate) £6.25 for 2.5 hours, this is obviously less than the £8.41 claimed. so what should nursery do with the left over money.

 

I know this seems confusing and im struggiling to get my head round it, but in the example above we are claiming too much NEG.

 

so say a child attends nursery for one session at 2.5 hours, (and receives £8.41 in funding) but this is more than our fees for that period do we then still have to deduct £8.41 from the invoice (okay i know we don't deduct it as such, but we do have to show how much NEG is claimed) or do we show how much our rate for this period would be regardless of the NEG claim....

 

okay, im still totally confused, i just want to make sure we are doing it right, as understandibly parents know they are entitled to £8.41 per 2.5 hour session as NEG but our invoices are showing less than this because our hourly rate for that period is not £8.41

 

any clarification on this?

 

Dawn

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Hi

 

Just has a 'eureka' moment and figured it out.

 

if i had a brain i would be dangerous LOL

 

 

I was under the impression you were a Day Nursery - so it would be balancing the funding against the fees per session?

 

Get back to me if there's a problem !

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What you get for your NEG should not make any difference of what you charge the parents for your other hours. Count yourselves lucky we only get £8.25 per session. If you do more than a 2.5 hour sesion then you can only charge for the extra time on top if the parent wants the extra time. don't forget that you can't insist that they take the extra time if they only want the 2.5 hours.

Don't know if your borough is enforcing it but ours is.

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We had the Financial Adviser from the Early Years Group in a few months back and we were basically told that we should be charging the same rate for the under 3's as we were receiving for all our funded sessions.

 

We were blankly told that we were undercutting the service provided to the funded children if we were not matching the fee's provided by the government.

 

He has no idea about what families in the rural area where I live can afford to pay for childcare. We blankly told him that if we were to raise our fee's above £2.50ph we would basically have to close our doors straight away.

 

In our preschool we believe that we are offering a community service, we know we are never going to make a huge profit. We just want to help the children and their families.

 

I have never seen our committee look absolutely speechless, the treasurer went bright red and had to leave the room!

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That is my understanding too, the NEG should not be subsidizing the non-funded children. At £8.42 NEG we should be charging £3.37 an hour which would give a session fee of £9.27 - but we don't. Our non-funded session fee is currently £8.00 and we may put it up to £8.50 in September.

 

If you look at it, under 3's actually cost us more because of the higher staffing ratio.

 

As we charge non-funded children £8.00 for a 2.75 hour session, we cannot charge more than that for our top-up to the funded children for the extra quarter of an hour so we cannot charge more than 73p top up for the extra quarter hour.

 

With the increasing difficulty in finding people willing to come onto committees to fund raise, charging a reasonable fee does seem a fair way of everybody contributing to their child's care and education. Many parents are more than willing to pay the extra cost of a lunch club too, not only the parents who work.

 

Having said that we are always reluctant to increase fees too drastically!

 

We still don't get paid for attending training, one day it would be nice if we could afford that.

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Guest MaryEMac

We only charge £4.00 per 2.5 hr session which is about half the amount of the funding. If we were to charge the same we would lose a lot of children, because the same as Shelley, we are in a rural area and parents can't afford it. We sometimes struggle to get the money as it is.

 

Mary

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I've attached an example invoice we use which shows the parents the FREE entitlement, and the charges for non funded times. The NEG has not got a monetary value as far as parents are concerned, it is FREE education not a fees subsidy.

 

If your non funded times are at a different rate then that is your business, as for the comment that NEG must not subsidise non funded times then (shelley35) then I would think that all you have to do is show the cost of administration of the NEG within the setting, additional equipment cost to deliver the FSC, additional training costs, additional resources costs, such as parent meetings, assessment folders, extra training, extra staff meetings etc etc and you can easily show that the NEG which is above your normal hourly rate is spent on education that is not spent on the non entitled children.

 

Interestingly there is an article in this weeks Nursery World which states that the NEG is costing providers on average £1 an hour in lost revenue, and that the NEG is not covering the true cost of providing the governments FREE education for all 3-4 yr olds, we are subsiding the governments plan.

 

Peggy

example_invoice.xls

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Hi there,

 

Our session fee is equal to the government grant regardless of the age. This solves any problems with top-ups etc and our justification is that 2 year olds younger children require a higher staff ratio than 3-4 year olds. We do have parents that can't afford to pay and there is a scheme run by the LA that the parents can claim the equivalent of two funded sessions per week it needs to be signed off by the health visitor. This applies to children attending before the grant kicks in at their 3rd birthday. We also offer a payment scheme whereb parents can pay an amount per week and pay through the year if this is more manageable for the family. I think it comes down to flexibility of the setting. Also it was our understanding that top-ups weren't allowed, ie if the voucher amount was less than the session fee it's down to the setting to absorb the cost, isn't this why the Save our nurseries campaign is operating!! This is why we increased our session fee to prevent us losing funds.

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Hi again, forgot to say,there was an article last week I read that contradicts Nursery World and stated that on a recent survey the cost to providers for the 2 1/2 hour session was actually less than £8.24 per session (not sure how) and therefore the think tank may reduce the NEG not increase it. Has anyone else heard similar rumours or anything to back this up?

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Hi rjgmummy and welcome to the forum.

 

Perhaps I shouldn't have confused the issue by using the word 'top-up'.

 

We are allowed to charge parents for extra services that we provide such as lunch club and the extra 1/4 hr we are open over and above the 2.5 hours of the NEG, provided parents are made aware that this is optional and that they can opt to attend for only 2.5 hours. And provided that we do not charge them more than our normal charge for non funded children.

 

Hope they don't reduce the NEG!!! I had hoped the NEG would eventually support settings in paying staff a reasonable wage and for some of the extra hours that we actually work for nothing. Am I an optimist or what!

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Since September our NEG has been calculated by the hour (£3.22) For us this means that 4 sessions is free but if the child attends for the 5th session then there is a charge for the 1 1/4 hours above the free place. This is much easier than previously when it was per 2 1/2 hour session and we charged for the additional 1/4 hour. We are allowed to stipulate that places are only for the full session. We are also allowed to charge whatever we like for additional time / extra services / under 3 provision.

 

There is now a Government requirement that all local authorities develop a single local formula for funding the free entitlement for 3 and 4 year olds in Maintained Private Voluntary and Independant sectors by April 2010. My LA are conducting an analysis of the true cost of delivering the free entitlement in PVI sectors.

 

 

Alwyn

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Whitetree, same in our LEA, what gets me is why does the government need 3 YEARS to work out what is a straightforward sum?

Hmmm, when is the next election?

How many settings will close due to unsustainability before 2010?

Will settings still get what they need in 2010?

 

So what does your business plan look like given the future is so uncertain?

 

I don't have one, I closed in December.

 

Sorry that sounds bitter, I am actually glad I am out of the 'system' and really wish that the government hadn't intervened in my 'private' business financial affairs.

 

I applaud all of you who are 'sticking with it' and making a success of your businesses, the government are lucky to have you, and hopefully in 2010 they WILL show their appreciation by truely listening to the sector and paying a sustainable NEG level.

 

Peggy

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