Top up fees

[Guest]

TOPS Nursery-Nursery-Education-Funding-policy.pdf

 

Have just picked up on this article from Nursery World.

 

http://www.nurseryworld.co.uk/nursery-world/news/1157484/underfunding-chain-restricts-funded-only-15-hour-places

 

Hopefully the copy of the document they are using to explain the costs to parents has also attached!

 

Would be interested to know your thoughts - it's something I have been thinking I will have to do, especially as still no news on our funding rate (last year it was confirmed in July!) and I am assuming the rate will not increase again.

[mundia]

In the article, this is the part that bothers me

 

'Never agree that you have a place for a child until you know what they need – you can then say no if it is funded only'

 

 

In what way is this not discriminatory?

[GFCCCC]

 

 

In what way is this not discriminatory?

It is somewhat discriminatory but it seems that the funding rates have put some nurseries in a position where if they don't balance the number of children paying higher rates with the funded only children in order to meet their minimum income requirements, that they risk their own sustainability. This is not the case for us but we are non-profit making and our rates are lower than the funding rates, but I don't know how it is for some of the private settings in more affluent areas - I'm just trying to see it from all sides.

[Lois]

Our Local Authority won't allow us to restrict funded places to parents wanting additional hours. The Funding Agreement says

 

 

9.10. The Service Provider must not impose on parents any conditions of access to which they must agree in order to take up their Early Education entitlement, i.e. parents/carers must not be required to purchase additional hours or pay lunchtime charges in order to secure free provision.

Edited May 27, 2016 by Lois

[SueJ]

Well with funding rates so low that they no longer cover costs and a government suggesting that the only way we cover costs is to reduce our staffing by 15% we have little to no wriggle room so need to "make up the difference" somehow.

 

If you are a charity and/or rely on voluntary workers - hopefully you have little by way of overheads

 

If however you are a business - sole trader, partnership, ltd company, individual or chain then you will have costs and in recent years those costs have increased dramatically. Some costs you can reduce or try to control but others have come about as a direct result of government policy e.g., living wages and pensions. I am not prepared to lose my business or livelihood because there is no joined up thinking in government and they do not recognise that if you impose statutory costs in one area you must increase funding rates in another.

 

So we either cover our costs and if we are lucky make a bit of a profit to ensure that we are sustainable OR we run at a loss and close.

 

If a setting closes then there are NO free places on offer and everybody loses.

If a setting reduces the number of totally free places that it offers then there are at least some available to those who want to access the free offer only.

 

It is worth remembering that it is the duty of the local authority to ensure there are sufficient totally free places in their authority NOT providers.

 

To that end I am reducing the number of totally free places that I will be offering and to keep my business afloat will be giving priority to potential clients who will take up the full service that I offer. That is not discriminatory it is sound business sense.

 

I can no longer afford to subsidise the government and I would far rather keep offering employment to the 9 staff that I have than put them out of work.

 

We have always been a soft touch in early years but the worms are beginning to turn - bleeding hearts don't pay bills (including statutory ones!)

[finleysmaid]

 

 

If you are a charity and/or rely on voluntary workers - hopefully you have little by way of overheads

 

 

 

Im sorry I know this is a very small part of your point but as a charity we still have to make a profit....the charity commission expect that we are sustainable ...our over heads are just the same as everyone elses and volunteers are not a part of our staffing. My costs for staff are the same as yours and I work in a very expensive area and have to pay rent etc. Please don't think it's any easier for us!!!

[lynned55]

Sorry Sue, you make some extremely valid points and are spot on with what you are sayin- I agree wholeheartedly with everything you say however as finleysmaid says. We are also a reg charity and as such are seen as a voluntary group BUT no one volunteers for anything. I have 9 staff and our salary bill last year was in excess of 80K plus my rent- all amounts to some pretty hefty overheads.

 

As already said- it is only a very small point and not really relevant to what you are saying but I just wanted to say that our overheads can be the same as a private group.

[SueJ]

My apologies to my charity and voluntary sector colleagues - I don't think you have it any easier - I just thought your overheads might be a bit smaller - e.g., when I ran a church nursery there was no rent, rates or utilities bills and treasurer functions, HR functions and other such roles were undertaken by volunteers so no wages or pensions to pay for these positions.

 

In my neck of the woods we still have settings who advertise for voluntary staff (I don't know how successful they are mind you) !!!!

 

It looks like we are all struggling to be sustainable :-(

[Rafa]

You make a very good point Sue! Can I ask what kind of setting you are?

[Fredbear]

Those were the days SueJ but no more. We are also a registered charity group, with bills such as rent, insurance, wages, pensions, consumables, this all has to come out of our minute pot, so it's certainly tough times for us all.

Someone, somewhere, thinks we are raking it in, but without drastic increases in funding the outlook is bleak for us.:(

[SueJ]

You make a very good point Sue! Can I ask what kind of setting you are?

I am a sole trader (so fall into the PVI category) operating a packaway setting term time out of a church hall (always worried that with dwindling congregations the site will be snapped up by a developer!). What about you Rafa?

[Guest]

Charitable org of 45 plus years standing in exactly the same position as most others - ie unable to charge top ups to make ends meet!!

 

Why should parents fund raise when it's FREE - government pays = we are entitled - is the reality of most charities I would dare to suggest!!!

[Mouseketeer]

you're not wrong Ancaster...at least you could threaten them with fees going up if they didn't support fund raising, now most just don't care :-(

[Rafa]

I am a sole trader (so fall into the PVI category) operating a packaway setting term time out of a church hall (always worried that with dwindling congregations the site will be snapped up by a developer!). What about you Rafa?

Same as you Sue - sole trader, packaway, church hall, term time. Only 15hrs though as shared use of hall. I'm looking at extending by 3 hours (offering a lunch club) over the week - to hopefully increase income. Just working out figures at the moment. As you say with no increase in funding but increased overheads - we're pretty sunk if we do nothing!

[lynned55]

That's what we did a few years ago. Increased our hours by 30 minutes each day and at that point everyone who accepted a place did 17.5 hours per week ( all our funded children I mean) which brought us in some much needed cash. We used to finish at 12:15 pm with staff paid until 12:45. However we didn't really need the ful 30 mins to clear up so we charged until 12:45 , paid staff for an additional 15 mins and it has helped enormously. No one ever questioned it or said I only wish to do 15 hours, however things have changed very quickly over last two years or so. We have a few children now who only wish to access their 15 hours, with more coming up in Sept.. So we now say ok but you have to drop a day. We used to allow them to start 30 mins later but found that such a problem last year that we now just say no these are our times you do them or drop a day. I've only had one person take umbrage and go elsewhere.

 

Quite honestly I'm now at the point where I don't care. Either parents can take it or leave it as quite what wil happen to our ' extra' funds once the 30 hours starts and most of our parents aren't paying extra in fees I really don't know.

 

I did a rough reckoning last week and on our current cohort with the the hours they do and trying to work out those that may qualify for it, I worked out we could be working on a loss of around £6/7k. So something will have to give, I'm wseriously considering we will have to think of some sort of top up fee. I'm not cutting wages and certainly not cutting down on ratios.

[SueJ]

We now do a 5.25 hour session with lunch, monthly music and movement and termly "special events" and it is very much on a take it or leave it basis.

 

HOWEVER should anyone come and tell me they want their 15 free hours only then we have a different offer available. Firstly it must be free at the point of entry so if they can't start straight away then I want a hefty deposit to cover potential losses which I will repay on their first session - it is different hours and is not available for 38 weeks of the year as unfortunately 15 hours free does not cover the cost of parties and the other extra curricular activities that we provide "outside the scope of the EYFS" (as a provider it is not up to me to find 38 weeks or equivalent hours but the authority) and I regret to say that this year it is a case of toughen up or fold - let's face it if the government and local authority don't want to pay then why should anyone else.

 

I've told my staff team to cut the "bleeding heart" pleas too as none of them wanted to volunteer to take a drop in pay or hours to cover the costs of these extras for our funded only children.

 

If that all sounds a bit harsh then I am really sorry but quite frankly if I go into a supermarket and ask for their luxury brand but only want to pay their basics price then I know what their answer would be!

[MegaMum]

I'm confused Sue. What hours do you offer and are you keeping your head above water?

 

I'm racking my brain trying to come up with a solution as I have done a forecast for next year and we are £6000 in deficit. I have just taken a pay cut too. Currently we are open two afternoons, but I only have 5 children accessing them in Sept and we need 7 just to pay rent/wages. We have funded children only taking up 9 hours or 8.5! I was thinking of opening 4 days from 9:15-2:15 so they take up 15 hours. We have so many 2 year olds in the Autumn term too, jamming us up! All rather stressful trying to think how we can be sustainable.

[SueJ]

Our normal "all singing, all dancing" sessions are 9.00am to 2.15pm, Monday to Friday during a 38 week term time year. Most children do 3 sessions a week e.g., 15.75 hours; 15 of which are funded hours - Out of a total register of 49 I only have a couple who do 4 sessions a week e.g., 21 hours. Anything over the 15 hours is within our session fee additional charge which also includes lunch, a music and movement class once a month and other extras during the term for extra special things e.g., living eggs.

 

With little to no income coming in from families taking bulk additional hours our session fee for the additional time and extras is what is keeping us afloat.

 

We have a limited number of free places and should I have anyone ask for the 15 hours only then the offer is 15 hours taken in 5 x 3 hour blocks Monday to Friday - I will not take anyone who requires less than 15 hours. We can only offer the "free" entitlement over a 33 week term time year as unfortunately things like parties, outings and special events that happen during the other 5 weeks come at a cost that the free entitlement doesn't cover.

 

I also learned lessons from previous funding "offers" e.g., when it was 2.5 hours we used to offer a 3.5 hour session and then found that once parents had secured the 3.5 hour sessions they would request to drop to 2.5 hours so now if you take up an "all singing, all dancing sessions" place and wish to change to a "15 hour free offer" you have to leave and apply again.

 

This is only possible because we are in the fortunate position of being in an area with a birth rate boom, we also have a good reputation locally and a Good Ofsted. There are several groups around me who are seeing their Ofsted judgements fall to Inadequate or RI I don't think that it is a coincidence that these are groups who have continued to try to survive on "free entitlement" income only and as a result have had to make drastic cuts to the provision they offer and their staffing levels.

[lynned55]

Unfortunately we find this happens all too often now. Parents accept an offer of 17.5 hours and then ask to drop 2.5. So we now insist on half terms notice and charge for that half term. It doesn't seem to matter how often they are told or we write it down they still look amazed when told.

 

It's funny as its always a Fri they want to drop. We try to have around 25/26 per session. Mon is the only day that we do. Tues, WEDS,Thursday this year are up to 31/32/28. Friday's are 18 ( but always seem to have 2 or 3 off). So we ended up shifting 2 staff from Friday to Tuesday and weds, and operate with less on the Friday. Next year is looking the same, obviously no one in my area works on a Friday and not so many on a Monday!!