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Hi I am an experienced Manager working for a new company. I am lucky enough to have an Administrator. When discussing invoices with her recently it looks as though the NEG given to the parents may be wrong. I have queried the company finance manager as to where the figure came from. His reply was that it was probably the hourly rate we charge as a nursery. Again I queried this as the NEG in this area is £3.81 ph and what we are giving does not, in any way, equate to this.

His reply was we have to provide 15 hours of care, which we are doing at our rate and not that at the rate we get from the government. I asked him was he saying that we don't give the parents the full amount we get from the govt. His reply was "in a word YES.....if the funding is more than our hourly rate we wouldn't give the parents the difference would we?"

I haven't answered him, as I have started to doubt myself......but my answer, in a word, would be "YES....we would give the parents the whole amount.....otherwise they aren't getting free childcare are they?"

Am I right.....or is he?

I have been managing for 14 years and my way is the way I have always done it; if a child is entitled to 15 hours then they get 15 x £3.81, even if our hourly rate is £3.70

Have I been doing it wrong all of these years.....or have I stumbled across a nest of vipers??

 

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I'm not sure what you are saying...........is it that you believe your setting is not giving parents the full value of what you receive in FE??? AS I understand it, you are given a sum worked out by your LEA..............if you charge MORE than this rate, then you lose money as you cannot top up charges to parents. However, if you charge less, then that goes into your pot and you could choose to spend this extra on, for example, staff training. The important thing here is that children have thier full entitlement, that is, the number of hours booked by parents, to a maximum of 15 and no more.So, my interpretation is that for 14 years, you have been giving away your settings money and your Administrator is correct.

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You are right.

It sounds from what I've read from your post that the nursery is actually not giving free 15 hrs at all but charging to make up the difference which we are not allowed to do.

We have to give free 15 hrs REGARDLESS of what we charge, then only charge for anything on top.

I,for example, give the 15 entitled free hrs to a funded child but earn far more from a child who is not funded for 15 hrs.

I'm sure many settings are the same.

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Thank you for your replies. In another company I worked for the NEG was calculated as I stated....so I haven't been giving away the money....they were giving away the money.....I was merely following instructions. I still think the new company are doing it wrong.....but I will go with it!

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For us, we lose a bit on each hour a funded child is with us as the funding is less than our hourly rate. But the funding MUST be a 'free offer' so we (and anyone else) are not allowed to charge the difference between the two. If you're setting is charging children who only do funded hours (15 hours or less) then they are wrong.

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Absolutely. The free entitlement has to be totally free, you cannot charge registration fee or anything for children who are only taking up their entitlement. If they are taking additional hours, then you charge those at whatever your hourly rate is.

 

So if they get 15 hours free entitlement, you can't put a top up on that to make it the same as your hourly rate. That's the reason there was an outcry initially when the top ups were prohibited, as a lot of settings said they would go under as they couldn't afford to operate at that hourly rate.

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Absolutely. The free entitlement has to be totally free, you cannot charge registration fee or anything for children who are only taking up their entitlement. If they are taking additional hours, then you charge those at whatever your hourly rate is.

 

Interestingly - we were told by our LA we could charge a small reasonable admin fee- to cover phone calls, admin time, and postage.

We can only do this for children going onto our waiting list though - not if we can offer them a place 'there and then'.

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They just get 15 free hours, if thy la are giving you more than you charge per hour then that's a bonus, you don't 'give' that extra money back to parents. Unfortunately most people get less than their hourly rate but still you can't charge top up, it's a free entitlement. As long as they are getting their hours a week with no extra cost that's all that is required, hourly rates shouldn't factor into it!

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We calculate the weekly hours so say 30.75 a week for a 3 day per week child (nursery), then deduct the 15 hrs, so chargeable hours are 15.75 x (our hourly rate currently £4.38). In effect the parents doing more hours outside the entitlement are subsidising those who do very few hours outside the entitlement. But that's the rules.

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