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I Don't Understand.....


Edlee
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Hi,

 

Perhaps there could be a whole new forum area with this heading!!

 

I have been reading Nursery World and I just don't understand about the 15 hour funding stuff.

I am from a teaching background, new to pre-school and the Committee chair deals with all the funding but I want to understand...

 

So if you are a private or charity setting open for lets say 30 hours a week you don't charge a 3 or 4 year old for the first 15 hours and you get a set amount from the government per child per hour e.g £3.55. After 15 hours you can charge what you like?

So if you had lots of people just doing 15 hours that is your total funding.

Can you specify how many funded places you have each day so that you can boost your coppers with people paying a higher rate?

A nursery near us seems to just offer funded places in the afternoons and you pay full whack for the morning but can they still do that under the new code of practice?

 

In Nursery World lots of private nurseries were saying they are going to opt out of the government funded places but won't all the parents go elsewhere if they can't use their free 15 hours voucher with them? Is this just going to be a like a private school/state school system for the nursery sector?

 

I don't understand. Why can't the vouchers just be worth £3.55 x 15 hours and you just use them to help pay your nursery bill wherever you choose to go and the nursery then charge what it likes according to the quality/ratios/resources it is providing? And then the Sure Start centres which are subsidised by the government could offer care at the £3.55 rate?

 

I don't understand.

 

Mrs Naive

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Hi,

 

And then the Sure Start centres which are subsidised by the government could offer care at the £3.55 rate?

 

I don't understand.

 

Mrs Naive

 

Sorry I don't have an answer (another teaching background) but wanted to say the childcare in our CC costs much more than £3.55 an hour

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You are basically right. We claim for the number of funded hours per term, some children take all 15 a week and some just take 7.5 or whatever. We work out how many funded hours we have and get paid for that. We can't ask for any more from parents for those funded hours. If, however a child has sessions over and above their funded ones, then we charge for those.

 

In my preschool, 15 hours equates to 6 sessions, so a child attending full time would pay for 5 lunch hours and 4 sessions.

 

Quick edit to say - yes, if all the funded children were just doing their 15 hours, then that's all we'd get

Edited by Cait
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Hi

 

Why can't the vouchers just be worth £3.55 x 15 hours and you just use them to help pay your nursery bill wherever you choose to go and the nursery then charge what it likes according to the quality/ratios/resources it is providing? And then the Sure Start centres which are subsidised by the government could offer care at the £3.55 rate?

 

I don't understand.

 

Mrs Naive

 

 

Wouldn't that be great!!! I'm sure there are many parents and PVI providers that would like to do just that, HOWEVER, the Government in their wisdom will not allow that. Their mantra is free must mean free - and the funding must not be used in anyway to be a "discount" on funding a place at a pre-school, nursery etc.

 

The worry for all PVI's is coming out of the funding system - will the parent base fall away? There will always be those parents who can afford higher costs and the NEG funding is not an issue for them anyway, but these parents would probably choose private education over public anyway - and some parents may be able to afford nursery places at a higher rate for a couple of years before going to the local primary.

 

For the pre-school round the corner, the packaways it would be a very tough decision to come out of the NEG system, these days most of our parents depend on having that funding although It's not that long ago that parents had to pay for nursery places in full if they wanted their child to attend. All PVI's would agree it is only right and proper to have these funded places, the argument comes over the detail of how the funding is delivered, there are just too many restrictions in place.

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i am a playgroup in gloucestershire our funding has been cut by 10p per hour does not sound alot but over a year is roughly £3,000. the only way i could come out of the funding if all playgroups in my area did the same. We would then have to charge the way it use to be years ago by session.

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In answer to the original post, we only open for the funded hours and the funded amount is all we get from those eligible for funding. Our fees are pegged to the funding amount too. But we are a voluntary pre-school and don't make any profit.

 

Can I jump in with a related question of my own though please? If a nursery is open for more hours and charges for a full time place at £2.50 per hour, and the funding is £3.00 per hour (for illustration sake), how much would a parent whose child attends for 35 hours per week be charged? The parent claims for the full 15 hours in this example.

 

All answers gratefully received :o

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Well that's what I thought too but I'd be interested to see if anyone differs and then I'll share the complex calculation we have been sent!

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Oh yes Cait! From what I've seen some of the formulae are very hard to follow! :o

 

As Panders says, the Government is committed to providing a free entitlement rather than a subsidised entitlement, so that is why the voucher scheme is a non-starter.

 

My Local Authority decided not to apply to become a pathfinder scheme, which means that the extra 40p an hour that would have been available to my group has not materialised, leaving us very precariously balanced financially. Even if my parents were happy for me to withdraw from offering the Nursery Education Grant funding in order to keep the group afloat, I can't imagine many new 'customers' would be happy at the prospect of losing their free 15 hours.

 

We already do three hour sessions, so basically if I am going to make up for the shortfall in funding I need to encourage as many children to stay for lunch, and take as many unfunded children as I possibly can. Neither of these options are in the best interests of all the children who attend my group.

 

Maz

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Yes I came out at £2.50 x 20. The first 15 hours should be continuous and therefore cannot be charged for, after that you should be able to charge whatever your hourly rate is for the time the child spends with you - though for argument sake I would not set this any lower than the rate of the NEG.

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OK well I'm glad I'm not alone in my thinking then. The complex calculation I've had shared with me I won't actually share for fear of breaking a confidence. It does actually come out to the same as we all believe, but in such a complex fashion it is no wonder the information needs to keep being reiterated by the LA. Many of the settings seem to believe that they need to know the funded rate to be able to calculate the parent's bill for additional hours which to me seems ridiculous as surely they just reduce the bill by the first 15 hours. It makes me very glad we only open for the funded hours, but I do worry that parents in the LA are being unfairly charged somewhere along the line.

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Can we look at it another way? What if the funding was £2.50 per hour and the fees were £3.00 per hour. What would your calculation be then?

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Now this might be where they are going wrong and wanting to know the funding amount first then. They seem to want to make it (35 hours x £3.00) - (15 hours x £2.50) = £105 - £37.50 = £67.50 rather than the straightforward 20 hours x £3.00 after making the first 15 hours free at the point of delivery. I should just stop worrying shouldn't I? :o

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Yes I agree with Maz. The thing here is not to take into consideration how much the funding is. Fifteen hours must be given up to a child in a continuous manner, you can only begin charging fees after the 15 hours is up. Your invoicing should only go out to parents who are accessing more hours than that - there is no point sending invoices to children only doing 15 hours is there?

 

At one point we were told in Kent that we couldn't charge more than the NEG rate per hour for any extra time the children were with us, but I'm not sure if this continued to be the case. Even if a child is with you for half an hour over the 15 funded hours, you would only invoice the parent for the half an hour, at half your published hourly rate. Some nurseries had decided that they might charge a lot more for unfunded children to help redress the balance between what they would like to charge per hour and what they were allowed to under the regulations for NEG, this of course means that your 2 year olds would be subsidising your 3+ children, but that's allowable under the terms I think, as long as it's not the other way round - the NEG must only be spent on 3 and 4 year olds elligible.

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These are a couple of paragraphs from the new guidance document

 

"The guidance in this Code does not prescribe matters which are rightly for local determination; local authorities must work with providers to plan and manage local provision to meet the needs of families and children in their area. The Code is clear that local authorities should not intervene in providers’ private business outside of the free entitlement for which local authorities fund providers, nor does it provide guidance on how providers operate their private businesses or charge for provision over and above the free entitlement"

 

 

"2.11 Many parents choose to purchase additional hours at the same provider where they access their free entitlement. The rates which providers charge for their privately funded hours are a matter for them to decide and should not be dictated by local authorities. However, in these instances parents will be provided with a bill. Local authorities should support providers to ensure parents’ bills are set out clearly so that parents can easily recognise and understand what hours they have accessed in relation to the free entitlement and how any fees relate to additional services or hours. Local authorities should also ensure that the free entitlement is not represented to parents as a monetary subsidy but as a free part-time place."

 

 

What you charge over and above the 15 hours is down to your business model and market forces however I'm with Panders and cannot understand why you would charge less than the funding amount per hour for the first 15 hours - the parents will not be paying anything for the first 15 hours and will therefore cost should not be an issue. You might have a two tier pricing system but that then not hard to calculate e.g., 15 hours x EEF rate and additional hours x setting rate/hour.

 

To keep matters simple we now tie in with our funding rate for all our hours funded or otherwise - we won't get rich but we will at least be sustainable. Cheap childcare is not the key to sustainability and there is always a danger that your local authority may opt for a funding model that only funds you to what you charge.

 

This next couple of paragraphs suggests that LAs recognise costs nowhere does it state that all providers should receive the same funding amounts!

 

"3.14 Local authorities should recognise any costs associated with delivery of increased flexibility and consider how best to concentrate funding to support development of a local flexible offer which meets parental demand. This may include considering how to reward, support or incentivise more flexible delivery through the Early Years Single Funding Formula (EYSFF - see 3.17 below and chapter 5). Local authorities may choose to concentrate funding on the more flexible providers in order to meet effectively parental demand, but, in doing so, must not compromise sufficiency and accessibility of the free entitlement, nor quality of provision, in line with chapter 4 of this guidance.

 

5.7 Formulae must be composed of either a single base rate or multiple base rates differentiated by type of provider according to unavoidable cost differences, plus supplements. Local authorities must include a deprivation supplement and should also consider building in supplements which incentivise flexibility and quality."

 

Even if the SFF does not apply to you this year it will in 2011.

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Panders, we were told we must issue an 'invoice' (I choose to call it a statement) to parents where their child only accesses the free hours. someone in the LA must have shares in a paper mill...

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I think all LA's have their own way of doing things, but from the quote SueJ has put in from the new Code, it says parents should be able to see what hours they have accessed which are free entitlement and how many they need to pay for, so that is fair enough, as you say shares in a papermill would be rather handy.

 

I have kept a note of those only accessing free hours in the past in with all the paperwork for that term to do with fees.

 

I'm afraid the "bean counters" of local government will always want their i's dotted and t's crossed - they just love a paper trail.

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The same as before - you can't charge top up to £3 for the 15 funded hours so it would meant the bill is charged at 20 hours at the £3 rate and you forgo the other £7.50 ( 15 hours at £2.50 funding not £3 hourly rate) It's the price we pay as settings for having a regular income stream, which runs alongside our 'saleable places' I suppose. So in essence our funded children are being subsidised by the fee paying places/hours, but thats generally how it's been anyway .

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Thank you. As I say it doesn't really affect me as we only open for the funded hours but I wish the LA would be more organised about checking up and enforcing where it finds breaches as it really isn't fair to the parents otherwise. Not to mention they are making their lives more complicated!

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15 hours free and then 20 hours x the £3.00 an hour they charge.

 

I am going to charge £5.50 an hour for two year olds (unfunded) as the council pay £4.85 for a funded two at the moment .

Anyone taking more than their 15 hours will also be charge £5.50 an hour as that is what we have worked out to be the actual cost per hour.

 

I have advised all my parent's and no complaints yet!

 

At the end of the day we have to balance the books and pay practitioners salaries.

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Can I just add a little thought to this whole Free Entitlement issue.

 

Parents do not have to claim the Free Entitlement.

 

As this is a whole new debate I have started a new thread on this instead of posting here, sorry for mix up.

 

BMG

Edited by BMG
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