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Suggestions Needed - Cutting Costs /increase Revenue


fimbo
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hi all - ive been racking my brains during this past week, have been told by commitee that we are loosing money, and things need to change.

we have been having meetings for approx 12 months -this comes up every time -and we have told them that as well as cutting costs -they should look at ways of increasing revenue. they have said they will do this,that and the other -but find it easier to cut our hours.

our session rate (per 3 hours) is at £7.50 -with a predicted increase in jan to £8.00.

numbers of children are low -we are on minimum ratio -we have cut the quetist session and those children have moved onto one of our other sessions.

a breakfast club uses our premises every day - im not sure what they get charged for that.

we are a semi -packaway setting (as lots has to be stored away to enable breakfast club to use our premises)

 

2 members of staff have 30 mins each to set up, prepare snack, risk assess.

2 members of staff have 15 mins each to pack away and tidy before hometime

each staff member is allocated 1 hour planning, 15 mins per key child per week

playleader is allocated 1 hour per week for session evaluations and related paperwork (filling, senco ,dcpo etc)

playleader is allocated 1 hour per week for extra planning paperwork -going through development matters -making sure all goals are being covered, which goals to focus on etc.

 

how on earth am i to cut down on the above hours ??? there are only 3 of us in total -and we feel as if we are always chasing our tails.

 

staff all do more than they ever used to in their own time - i cant see any ways of cutting , can anyone please give me any ideas...maybe helpful if someone outside of the setting casts an eye.

 

i have asked for another meeting and have requested our ey support worker is there also.

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Do your fee's match the amount of funding you get per child? Our funding is £3.41 per child per hour so our fee's are £8.50 for a 2.5 hour session (£3.41 x 2.5 )

Our parents bring in a piece of fruit each day which the staff cut up and share amongst the children for snack, we just provide the drink and toast.

I'm seriously asking for all email addresses next week so I can save on paper and ink.

Othr than taht its all about fundraising.

Got to go now but I'll check back on this to see if anyone has any other words of wisdom :oxD

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Cannot see a way of reducing staff hours without you all ending up doing more work unpaid than you already do... would suggest if they start reducing the paid time out of hours you politely ask when is the work expected to be done, and do they realise that the standards will drop because there is no time allocated for it.. I used to ask how many hours per week they expected to work unpaid in a paid job.

 

I am sure you have done all this but anyway here goes...

 

I used to look at fees first.. contact the local settings ( pretending to be someone interested and asking how much? ) to see what the average fees were in he area.. this gave me a good indication of where to set out fees... we changed to charging by the hour rather than per session and ended up making it the same as any funding received as a minimum.. we did a costing exercise to see how much to charge to cover all costs... often the reason we lost money was because we had under priced ourselves...it also ensured any funded children were not subsidising the others who paid fees...

 

I used to look at things like the cost per hour for a haircut or some other service (even cost of luxuries like cigarettes) ... this was often much more than childcare costs and wondered why people were so willing to pay for these but not the cost of looking after their children , much more important to me anyway. This always made me feel that I was justified in saying we really needed to increase fees to cover costs.

 

Like you we used to close sessions and only accepted more children on those we had open where we stayed in ratio.. if we had to employ more staff we stopped admitting to that one but offered the ones we had.. when all were up child/adult ratio we then added the extra staff and more children for a few sessions. We did however usually end up recovering any losses this time of year in the summer term... and usually broke even by end of the year.. a balancing act most of the time. we only bought items when we had fund raised to cover the cost... income from fees all went to running costs.

 

Also where are there any other areas where costs can be reduced.. snack times can parents provide the items needed, or provide a snack each day for their child, our parents always provided the fruit and veg we found it was amazing how much money we saved doing this. can the help by supplying other items... all voluntary we found so long as we asked and had items of a wide range of cost they were willing to help.

 

I have always thought that eventually income and expenditure would end up unbalanced, particularly when it came to funded children, as funding often stayed the same (or went down in some areas) but all over outgoings went up... minimum wage, Nat.Ins. etc. all set by the same government.

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You're not alone, we are also the same last year we needed to fund raise £3000 to make ends meet, this year it's more.

 

We are trying to get grants from some local businesses to replace some tired resources, which means we won't need to use our £'s, but as we aren't in an area of deprivation we can't access lots of larger grants.

 

Our fees for a 3 hour session are now at £9.00 which is just 33p per session short of funding so raising fees any more won't really achieve much.

 

We do put a request on the parents notice board asking for necessities like, baby wipes, antibac spray, crackers, breadsticks etc.

We also have a wish list for books and toys which parents may like to donate, this does work a little particularly when their little ones have out grown some items.

 

All helpful BUT none of this actually gives us the £'s which we so desperately need - I'll also be watching the thread with interest

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thanks for all your suggestions and wise words, glad to know others are there who i can 'vent' to !!! it just all seems to be piled on my shoulders and the onus seems to be to me to cut hours but maintain the same level of service.

our current session rate does not equal the funding rate -we are on £9.75 per session funded -but will only be going up to £8.00 per payed session in january, as we currently only have funded children i suggested we put up our rates to equal the funded amount (then no -one could complain about the jump !!) -but they have obviously decided that wasnt a good idea.

we dont really have competiton in my area -we are a very small village -so parents usually come to us, and / or go to the private nursery in the next town (10 miles away) - we have increased our session hours as parents asked for longer sessions (so they didnt have to travel to the private nursery).

i'd like to see the finances for myself -maybe the commitee's expenditure needs to be scrutinised also ? but i have suggested this -again falls on deaf ears.

 

the commitee have no idea what goes on outside of the session time -they see this as the time that needs to be cut as its ' non profit making time' (their words)

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If your committee are insisting you cut staff hours start keeping a record of all the jobs you do outside of the setting hours for which you dont get paid and present it to them.

Our staff dont get paid for everything they do, which is shameful but we all recognise its a necessary evil of working in childcare it seems. The only way we can save money is through staff wages and I'm loath to do it, they get paid 22.5 hours a week but we are only open 17.5, the extra hours go towards setting up and putting away as well as paperwork. We reduced hours a few years ago but we kept a record of the unpaid work which was eventually repaid when things were better but its hardly how to run a business is it?

Make sure you arent doing anything which should really be done by the committee, newsletters, collecting fee's, invoicing etc. I know its easier to do it yourself but if you check that against the hours you're doing unpaid you might find they look properly at raising money rather than try to cut down on your wages.

I've just had a quick look at our bank statement and yet again we are relying on the funding going in soon to break even this side of Christmas.

I wish I had a fix it wand.

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Not sure if I'm reading it right but you get £9.75 funded per session, and charge £7.50 - 8.00 per session?

 

If so, can you not argue that actually the funded children are subsidising the unfunded? I'm sure that not allowed.

 

We charge slighlty more per session- appox 65p more for unfunded children. (we round it up to the nearest pound)

 

Mind you, that said - if your parents are not prepared to pay the extra that's not going to help anyway.

 

xx

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Since our fee's went up we're noticing more and more parents are delaying starting until they can claim the funding, so its swings and round abouts really, but I'd definitely look at matching the funding. I put a letter out telling parents we'd been instructed that our fee's were too low and we should be charging the same as the funding was. You could also pint out that the under 3s require a higher ratio and so more staff.

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all our children are funded this term -the ideal time to put fee's up,we have also seen more parents wait until funding starts before they come to us.

i've suggested the price goes up to the funded rate, our EY team also suggested it last year - but what more can we do if they dont listen.

i do all the added paperwork -invoices, funding forms, sending letters to parents, newsletters, website,bag 2 school,book people, new parent enquires, updating all paperwork, sending out prospectuses, namecards, peg labels, liasing with the primary school, wages, petty cash, ordering stock....i get paid a set amount per week for this -and ive told them they can have it all back, but they dont want to do the work -but dont want to pay me to do it either !!

 

we would all hate to see standards drop, if we were inpsected and we went down to satifactory we would be gutted.

 

there is so much more to do as well, all the policies need urgently updating, sef, etc etc....

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This, I fear, is one of those occasions where we can all empathise but havent really got any solid suggestions that you havent already thought of. I get quite cross that we are treated like this in EY, its quite shocking.

I think the only thing left is to have a meeting with all committee and staff present and get your parents in too and discuss where the setting is going and how you all can help to get it there, point out too that staff really cant do anymore unpaid work especially since you laready do the committee roles.

Do your parents know how little money you have? I dont think ours do so I'm giving them all a copy of our accounts next week, see if that nudges them into giving a bit when we fundraise.

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I too can sympathise, but haven't really got any ideas to help. We're in the same situation, and really should have lost a member of staff this term, but nobody wants to do that as we would need her back by the summer! We went to single point entry this year too which hasn't helped!

 

My committee chair is very finance orientated, and showed me a breakdown of finances, and we are only making a profit on 1 day out of 4 this term - quite shocking. We are doing everything possible to fundraise at the moment, as I'm sure everyone else is too!

 

I'm very interested in the idea that hourly fees should be equal to the hourly funding rate, as ours are way below this at the moment. Is this written in stone anywhere? Makes sense to me anyway as our unfunded children are younger and so need a higher staff ratio anyway.

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just a couple of suggestions... we have made it very clear to prospective parents that if they want an unfunded place we will bill them in any way that makes it easier for them (to try and get them in!) we even had one pay us weekly in cash last term ...a bit of a pain but needs must! There are lots of fundraising ideas on here...if you set the budgets for the coming year you will know how much the shortfallis and therefore how much the committee need to aim for...maybe if they know you need 'x'then they might think outside the box! :o Do you know why you loose children to the private setting...can you change anything to match their offer? can you put on another group...like a parent and toddler group? or a dads group /art group/music? to fill in the gaps that have been created by the downturn in numbers. You might get two cracks at the whip as it were, if parents buy into another activity. Can you survey the locals and try to find if there is any service they want but don't have(you might get funding for setting up something to meet local demand)

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Our unfunded children actually pay more than the funded as the funding does not meet our outgoings. We charge more oer hour for our under 3's as recognition of the fact that they require higher ratios and more one-to-one. On top of this we invoice all parents an additional service charge of £2.00 per session which covers provision we provide above and beyond the standard expectations such as organic snacks, the cost of keeping photographic records, items needed to meet individual planning etc. However, in spite of this, we have struggled the last couple of years to make ends meet. Not sure what the answer to economic sustainability is but if anyone has it, can I be first to know please

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I empathize, it is a constant battle. We had have a shortfall this term due to reception children starting full time school this autumn rather than January. We have managed to find some funding from a local charity for the shortfall.

 

As you say, now is an ideal time to put the fees up to match the funding, I don't really see that you have any alternative. Perhaps get the EY in again and insist. How can you cut any more hours, especially when fees are not high enough. We already do so much unpaid - hours and hours and hours. We charge £4.00 per hour now, when I took over 2 years ago fees had only just gone up to £3.00 per hour after a long time lower. We are only trying to cover costs. Our agreement with the LA state something to the effect that funded places should not subsidize non funded places.

 

Which brings me to the point of fundraising, in our setting fundraising pays for new resources or unexpected expenditure not the day to day running costs. I personally feel that paying reasonable fees is the only fair way of covering our costs, and that it is unfair to expect staff and a few parents to work to raise funds to cover our wages. We might as well work for less or work for Tescos.

 

What age range do you take? We have quite a few young 2 year olds which seem to help. Of course they have a higher ratio but if you need two staff anyway, with juggling you can fit children within the minimum ratios. Luckily numbers are looking good for January so we should be able to increase staffing.

 

Other than that, I have been actively marketing our setting, really spelling out what we are good at, and parents are coming through word of mouth. Like you we are the sole provider in a village but historically some parents have gone outside the village because of their previous perception of our setting. That now seems to be changing and parents (and children) are liking what they see, and coming to us.

 

Lots and lots of hard work - unpaid of course!! Which I guess is easier (or at times overwhelming) for me as Manager, with a board of trustees.

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I am not sure this will help and some of this has been mentioned before. We get alot of income from extra hours children attend. We are open 9-12, 9-1 or 9-3 monday - thursday and 9-12, 9-1 Friday. (Pm to catch up on paperwork, staff meeting etc). These sessions are available for all funded children. Any one wanting extra hours that is above 15 hours are charged at £3.40 per hour. slightly more than ng rate which is £3.25. This works well as alot of children do extra hours. Other sessions we do are for 2-3 year olds which are on a tues, weds, thurs 1.00-3.00pm charged at £6.50 per session. These children will attend with 3-4yr olds attending all day. works well.

 

hope this helps

 

Buttercup

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Our unfunded children actually pay more than the funded as the funding does not meet our outgoings. We charge more oer hour for our under 3's as recognition of the fact that they require higher ratios and more one-to-one. On top of this we invoice all parents an additional service charge of £2.00 per session which covers provision we provide above and beyond the standard expectations such as organic snacks, the cost of keeping photographic records, items needed to meet individual planning etc. However, in spite of this, we have struggled the last couple of years to make ends meet. Not sure what the answer to economic sustainability is but if anyone has it, can I be first to know please

 

 

In our county we are not allowed to charge for extras as free funded sessions should be just that.

 

Buttercup

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i think that the rules stipulate that you can ask for payment for extras (like snacks) but that parents must have the right to opt out ...and that this should be made clear to them at the time of charging...so that if they only want 15 hours free then this is what they are able to get.

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I checked religiously about the additional services before adding it to fee structure and even had a visit from the county auditor but here in Somerset we can charge for additional services as long as it is charged to ALL children (even the funded ones) and it is clearly outlined in our fees policy what the additional charge covers and our parents do not have to have the option to opt out. I wasn't aware but each county obviously operates differently.

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In our county we are not allowed to charge for extras as free funded sessions should be just that.

 

Buttercup

 

 

This is quite correct, additional fees cannot be charged as a condition of the placement, which makes is less equitable for parents who cannot afford that extra pound or two to take advantage of that provision. The whole point of the free entitlement is that it is exactly that...free.

Ive not got the code of practice to hand, but it is explained clearly in there.

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I'm not sure how Somerset manages to operate but what they have told you is wrong. I dont have it with me to quote exactly but Mundia is correct the Code of practise does indeed state that the 15 hours must be free at point of access. Where I live we have just had a big thing about this recently and all told to display the c of p that states it.

This is not individual county or borough rulings but Central government- so I really dont know how htey can tell you that parents cant refuse it.

We have recently increased our session time by 30 minutes which has enabled us to increase our fees by £3 per session to unfunded and (more importantly) charge funded children £2 per session. So far no one has refused the extra 30 minutes.

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Whoa, I think I'd better look into this first thing monday. Am a bit worried now because if I have got the wrong advice I'm not sure I can survive without the additional charge. Thank you for your comments and I will let you know what happens..............

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Whoa, I think I'd better look into this first thing monday.

It is always worth re-checking with your LA just to be on the safe side. It might be just the way you're explaining it! In the Code of Practice it says that LAs must take action if settings are making a charge for any part of the 15 hour entitlement. Ours allowed us to continue to make a top up charge after the SFF was introduced, saying that it would work with all settings to make sure that they were able to offer the free entitlement, and a final deadline for this was given to settings.

 

In any event, have you got something in writing from your LA about this? If so then I wouldn't worry - it is down to them to make sure you're doing it right. If you've been visited by your auditor bod then it is hard to see how you could be doing something that goes against the CoP and against your LA's instructions.

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hi max321.

As Maz said, best check with your LA. However, Im pretty sure Somerset, like most LAs will probably have their local code available on their website so you can always check there first. WE have members from Somerset here too, who may be able to let you know what the code says.

 

Some LAs were a little slower than others in fully implementing the code of practice and had some kind of transition planning in place (Like Maz's, Im guessing, for example); but all LAs were expected, I think, to have free provision in place by Sept 2011..is it possible your advice was given before this date?

 

There is a big difference between parents having to pay in order to access your provision, and your offering extra services which parents can choose whether or not to take and which you can charge extra for. So, I have a setting which provides a yoga class, for which they charge, but they sent out a letter asking parents if they wished to join in and made it clear that it would not affect their free entitlement or the quality of that free entitlement if they chose not to. Most joined in and were willing to pay the extra couple of quid, but anyone who couldn't or didn't want to, could still access the free provision.

 

If you find that you have indeed been given inaccurate advice, could you in some way find a way like the example above, or as others have said, charge for additional hours that many parents would be happy to support?

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Yep, have spent the morning studying the code of practice and am still not sure. We, too were allowed to charge top up when the SFF was first implemented and it was after the visit from the auditor at the end of this period that I changed to an additional service charge and unfortunately I do not have anything in writing but it would have been a couple of years ago. Tossed and turned all night thinking about it and so was very glad of the extra hour. The funded hours we provide are free but we add the additional charge to cover snack, webcam, higher staff ratios etc so not sure how parents could opt out of these things.

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thanks again everyone - lots of suggestions there -i will note them all and out them to the commitee and staff. as mentioned our nearest competitor is the private nursery -some of our children go there (as well as coming to us) as they offer care from 8am -6pm, and as some of our mums work , it suits them better -we have adapted out hours to include 2 full day sessions, and these are the most popular - unfortunatly we are unable to open any more hours.

 

we have cut a member of staff -leaving us with 3 -so that will save a little on training, hol pay etc - tho this leaves us with no lee-way if we have a staff member off sick.

 

thanks again guys, really appreciate it xx

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My concern with cutting a member of staff and leaving no leeway would be what would happen if one of you off ? Are the committee going to step in and fill the breech or would you have to call in agency - or heaven forbid be over ratio or have to send children home and giving refunds ? Cost wise the agency/sending home options would be more than having the extra staff member.

As others have stated you need to bring your non-funded children in line with funded as they can't be subsidised by the funding, and look at things that legitimatley you can charge for. Maybe a costing needs to be presernted to the committee with the differnt options suggested, ultimateley the decision and responsibility is thiers I assume ?

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well, we have 1 staff member of for tommorow- possibly the rest of the week -this means myself and the other staff member have to now work the whole session with no break -from 8.30 - 3.15, no-one is available to pop over and give us 10 mins for lunch.

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You have to have a 20 minute break by law if you work 6 hours or more! This is clearly not sustainable. Goodness knows 20 minutes is barely enough when you've been looking after young children all morning! The person giving you a break would also have to be suitably qualified.

 

Are the committee aware of their responsibilities?

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yup - we've told them this, but (as ive already posted on previous threads) my commitee are very very very laid back re rules when it suits them, they are only after all 'guidelines' (their words )

 

when we had a staff member short a few weeks ago, the commitee told me it was fine for one of them to help out for an hour until the other member of staff could get in to cover. apparantly ofsted said it was ok. despite the commitee not being trained or experienced or having a clue how the session runs.

and i couldnt speak to ofsted myself as they do not know i am playleader yet -as they havent been informed of my job change from september

i think you can all see what im up against.......how long until christmas :oxD

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