Increasing Fees

[Guest]

Our fees for non-funded children have remained the same for around 4 years and our committee are now considering increasing them. However, one member suggested the fees for existing children should remain the same and the increase should only be brought in for new children joining next term. I was wondering what anyone else might think of this. To me this doesn't seem to be an inclusive practice, but one committee member suggested that banks don't offer the same deals to all customers and on this basis why should a nursery be any different.

[HappyMaz]

Why are you putting your fees up? My guess is that the old fee structure doesn't accurately reflect the cost of providing a nursery place, in which case the fee should be the same for all children.

 

A cynical person would suggest that the existing committee members recognise the need to raise fees but don't want to pay them themselves! To use the bank analogy, they often offer more competitive rates to new customers than the old ones enjoy, so I'm not sure that argument stacks up.

 

I'm not sure what the legal position is, but my view is that the fee should be the same for all children: otherwise you'll have a situation where the newer families will be seen to be subsidising the childcare costs for the older ones. Added to that, can your systems cope with a fee structure that is not uniform?

 

I'll be interested to see what other people think, and what other settings do!

 

PS: Welcome to the Forum! :1b

Edited March 2, 2013 by HappyMaz
Just wanted to add the welcoming PS!

[Rea]

I suppose if the children start as 2 year olds there could be a case for charging more due to the ratios needed, but thats the only difference I would make otherwise it isnt very fair. At some point I guess all the children will be paying the higher rate so I dont see the point in staggering the rise. I know our treasurer would hate me forever if I gave her that to work out too!

Presumably the committee have fee paying children, in which case you might find they have a conflict of interest and shouldnt vote on it anyway.

[Mouseketeer]

April would be a good time to bring in a fee increase for all...this could be inline with the new nursery funding year, how does your hourly rate already compare with funded hourly rate, ours changes from 3.40 to 3.91 for summer term due to the new way it's been assessed so where our hourly charge was higher it will now be lower and will also need reviewing.

 

And welcome

[finleysmaid]

personally i would increase across the board...i'm assuming they are not going up dramatically. We always give our parents a terms notice...i think that's fair and gives them time to find somewhere else if they felt it wasn't affordable (i've not lost one yet though!) this would presumably mean the committee's children would be out of the 'pay' period if you waited till september.

[lynned55]

I think that if you have a two tiered fee structure you are opening up what could be a very nasty can of worms.

Unless you are charging more for younger children I dont think you have a good enough reason for charging exisiting parents.

As a parent i would be tempted to vote with my feet if I found others paying less than me for the same thing. Although our financial year runs April- April our fees have always risen in September- mainly because that is when 80% of new children start and it is usually decided in April so we can give everyone quite a bit of notice.

[Guest]

I would increase across the board too because as previously stated if you need to raise your fees then you need the extra money from all those using your service.

 

We currently charge £10 for a 3 hour session but get paid £3.24 per hour from county for the funded children (ie £9.72 per session)

We just rounded the fee up to make payments easier all round.

We had a dire financial situation and actually raised our fees mid way through the Autumn term!

 

Mouse63 £3.91 an hour sounds great! I haven't heard about any increases for this county except if we have special needs children attend and we will now (from April) get the SEN supplement given straight into our funding pot for each child that is eligible for it.

[Guest]

Many thanks Maz for welcoming me and to everyone for all their helpful comments. I'm afraid I can't tell you what our present rate for funded children is, but I know that we are losing money as our current fees are less than we get for funding. I'm purely a member of staff who attended a staff/committee meeting and heard this tiered suggestion put forward by a committee member. It seems wrong to me on so many levels. I suggested everyone pay the same and that all parents are given ample notice of the change in fees. I did think we might possibly reserve the right to charge more for non-funded 2 year olds as the staff ratio for these children is higher.

 

I also suggested the fees should change in line with the new financial year from April. Ultimately the decision is not up to me though.

 

Many thanks for your input. It gives me further suggestions to go back with.

[Mouseketeer]

It was 3.40 plus a a flat payment dependent on RAG score (that is being dropped) 3.40 is everyone in our counties base rate with diff small amounts added ie we have an extra 11p an hour as no other setting within 3km, then you get extra per hour depending on total income previous year, the lower income gets a bit more per hour etc....

 

Edit: I also think committees should be reminded that they need to think about the best interests for the setting and not look at it personally...if you discounted the committee members it would affect who would actually make the decision ?

Edited March 3, 2013 by mouse63

[narnia]

I would also vote with my feet if I discovered that other parents were paying less than me for the same service. If you need to increase your fees, then you should do so...........and you should spread the load across the board, so everyone pays the same.

[narnia]

PS, you really ought to write into your policies and parent information that fees are reviewed annually, perhaps ready for September/new setting year,or April when the new funding levels are set, even if you don't implement a rise, that informs parents that they could go up, so they are prepared for it. Much easier to add a little each year than to have to whack a lump on because your backs are to the wall. As a general rule of thumb, fees should at least match what the FE is; more if you need to. Consider what your nearest competitors charge and be on level terms with them? ( Or more if you are offering more than they do of course)

[redjayne]

Agree with lots of the above comments - an across the board increase - have it written into contracts and warn parents it will happen annually , and also if fees are less than the money you get for NEG children then you are on a sticky wicket as your NEG children are in essence supporting your fee paying children and that's not allowed. Maybe you can use that as a strong reason why it has to be done across the board ?

[Cait]

Redjayne beat me to it. Yes, it could be seen that County are subsidising the fee paying children. We now charge approximately the same as the Entitlement funding for fee paying children

[Mouseketeer]

We've been charging a bit more ....so could say the non-funded have been subsidising the funded

[thumperrabbit]

We've been charging a bit more ....so could say the non-funded have been subsidising the funded

Yes, we are at that rate now too...and it can only get worse

[lynned55]

Well our non funded children are most definitely subsidizing our funded children and have been for a few years now!! No one seem too bothered about that being unfair though????????

[anju]

I review fees around January/February for an increase or freeze in September so this year they will have had around 6 months notice of the increase. Also, lots of children will leave between now and then and I have not enrolled many new ones yet so the timescale for me works well. There is a higher rate for 2 yr olds which matches the funded rate.