Nursery managers, who have become adept at balancing the pressures of delivering high quality and affordable childcare while remaining financially viable, face their biggest challenge yet with the implementation of the Early Years Single Funding Formula (EYSFF) in April.
Since September, providers have delivered the 570 hours a year 'free entitlement' to nursery education for threeand four-year-olds - with flexibility to meet the needs of parents.
Whereas parents traditionally took their hours during school term time, for example as morning or afternoon sessions, these days nursery managers need to find ingenious ways of delivering the free entitlement at times and in segments that best suit changing demands. At the same time nurseries must provide continuity of care while maintaining staff ratios and financial stability.
In some cases nurseries are achieving this by offering the hours across 52 weeks, sessions in longer segments or extra services.
ADMINISTRATION CHALLENGES
It is argued that everyone benefits from spreading the entitlement across the full year as it is easier for the provider and parents to budget. For the children there is greater consistency and continuity of care, with no long gaps in learning and no need to re-adjust their routines and 'settle' in again.
One nursery which operates the 'stretched offer' of 52 weeks is A Touch of Eden in Stanwick, Northants where the proprietor Tanya Richardson says, 'We introduced the stretched offer last September because the local authority allowed us to offer either 38 weeks or 52 weeks a year. It makes sense because some children attend the nursery throughout the whole year so it enables parents to spread their costs and take their hours when they need them.'
If parents are claiming tax credits or using vouchers it is easier if their costs are the same each month and obviously the nursery avoids peaks and troughs in income which can have such an impact on cashflow.
The downside, says Mrs Richardson, is that with 40 families claiming free entitlement over either 52 weeks or 38 weeks, invoicing is a challenge.
'It has no impact on the children or the staff but it is a nightmare when it comes to claiming back the money as almost everyone is different. Working it all out is quite complicated and I sometimes think I need a degree in mathematics, but it will get easier.
'I invoice termly which is easier. Before, depending on the parents' banking system, I could be chasing them or I could be owing them.' Mrs Richardson praises the helpfulness of her local authority. 'It set up a consultation group about two years ago and I was a representative on that so I understood the changes. Whether it would be the same for other settings I don't know because it is quite complicated.'
She says the funding just about covers her costs now. 'When the EYSFF comes into effect in April we are going to be slightly better off because of the quality supplement for having graduate leaders in the setting, as my deputy and I are graduates.'
She adds, 'Parents have to sign a contract on a termly basis. That is set down by the local authority. As far as we are concerned we will be as flexible as we can be, but where it has an impact on our capacity it makes things a bit tricky.'
WHAT PARENTS WANT
Claire Schofield, director of membership, policy and communications at National Day Nurseries Association (NDNA), advises nursery managers to communicate effectively with parents regarding the flexible entitlement.
'Parents might equate flexibility with being able to take up free nursery education whenever they require or want it. The Code of Practice sets out how a "parental declaration" should be in place which outlines what the nursery will deliver and its expectations of the parent, such as the amount of notice required to change the patterns. Although these can be effective, it is important that this is fully discussed with the parent to ensure that they understand.
'It is also a good opportunity to explain that there are national rules that need to be followed - for example, some parents question why they can't take their funded sessions in two days to match up with a part-time job. A number of members report it is a good strategy to invite parents into the nursery a month or so before their funded sessions start to go through how it all works and highlight what information is required.'
At Oaktree Nursery in Derby, parents are offered the entitlement in a range of segments - as three hours a day for five days, five hours a day over three days or two six-hour days and a three-hour day. To accommodate this degree of flexibility the staff shift patterns changed - with the majority now working from 7.30am to 6pm over a four-day week.
'We initially trialled the four-day week,' says manager Sandy Lowe. 'After the first couple of weeks the staff liked it so much they wanted to continue. They enjoy having a week day off and come in the next day refreshed. Although they work a long day they enjoy the fact that they only work a couple of days before having a day off. I have requests from those people still working a five-day week to switch over.'
Ms Lowe reports that as some parents only work two days a week, they are really helped by having two longer sessions. It means that they do not have to spend all their wages on childcare. In the current climate they need their childcare to be as supportive as possible,' she says.
'We started this in September and our parents were really pleased that we were able to tell them six weeks beforehand so they could sort out their working hours.
We find that once a child reaches three years old, parents are getting their working hours sorted out as they are beginning to plan ahead for when the child goes to school.
'At the moment Tuesday, Wednesday and Thursday are our busiest days, but as long as a parent gives me a week's notice of a request to switch times, provided I have space, I will fit them in.'
A close working relationship with its local infant and primary school is enabling Little Angels nursery in East Tilbury to offer parents flexibility. The nursery moved on to the school site in May 2009 and together they provide a seamless service.
Rachel Turner, the nursery manager says, 'We provide wraparound care with our breakfast and after-school clubs. When children are using the school nursery for their entitlement they come across to us for lunch club and stay for a session or for the whole afternoon and vice versa.
'We also have children who come to us for their free entitlement. Parents have to sign up for the term saying which sessions they are using so we can claim that back from the local authority.
'There are a few vacancies at the school nursery but if there is a big influx on free entitlement, with rising birth rates coming through, we can take children who are unable to get into the school nursery.
'It is easier for the parents as they have one site to drop off and collect from. It also eases transition as the children are familiar with the school staff and some of the equipment. Without being so flexible I think we would struggle to fill places.'
Ms Turner recognises it would not work without the support of the head teacher of the school. 'We have regular meetings with the school. There is a flow of information and we can see ways to extend the children's learning and we can talk about children's next steps,' she says.
PROVIDING ADDED VALUE
At the award-winning Lexden Lodge Kindergarten in Colchester, where 60 children are on free entitlement, the proprietor Mahila Samarbakhsh says there is £3 an hour shortfall in what she gets and what it costs her.
'We work with Essex County Council and there is a paragraph that says we can charge for any hours taken outside the agreed funding segment over and above the entitlement. We try to offer things that will attract parents to take on extra sessions because otherwise the three funded hours system would not work for us. We have 47 members of staff and I need to be sustainable.'
She provides staff with a generous package including annual pay rises and an hour's lunch break. As a result, last Spring her occupancy rate was 90 to 95 per cent and currently she has waiting lists for two rooms.
'We try to make everything so attractive to parents that they want to book in for extra sessions. For example, we have a musical activity session and we also offer French lessons.
'A couple of years ago we set up our early start and now open at 7.30am so parents can drop their children on their way to work. We are thinking about doing a school pick-up service.
'We are always looking at what more we can do for the children and their parents and what extra things we can offer. You have to keep reviewing what you do and thinking about how you could organise things better.'
She adds, 'I look at my accounts every month. We need to survive and we need to be able to maintain our quality. I have to make profit or the bank would be on my back but you still have to provide quality.'
ENSURING SUSTAINABILITY
Negotiation with the local authority will be key for nurseries on implementing the 15 hours of free nursery education and flexibility, advises Claire Schofield, director of membership, policy and communications at the NDNA.
'Under the Code of Practice local authorities have to research what parents want in terms of flexibility and work with providers to offer this within the national parameters of the code. However, this has to be delivered in a way that pays regard to the sustainability of providers.'
She is adamant that nurseries should not be expected to sign agreements for patterns that will be difficult for them to provide or damage their sustainability. For example, if nurseries were being asked to deliver 10am until 2pm five days a week it would effectively block out the nursery day so it would be unlikely to sell the time outside the funded sessions.
'Any nursery concerned about the impact of a requested pattern of flexibility will need to be able to explain what patterns they can provide and outline to the local authority how the request would be damaging to their sustainability,' Ms Schofield says.
'NDNA has heard of a number of ways providers are working to make flexibility more sustainable. For example, some nurseries have negotiated with their local authority to take funded-only children during traditionally quieter sessions such as Monday and Fridays, with the rest in blocks when the nursery is not full.'
With parents who take additional hours, the nursery is likely to meet their needs with flexibility, as free sessions naturally fall within the existing care patterns.
'In terms of flexibility, it is important to note that for the majority of nurseries it is not an issue - settings have always worked to provide patterns of care to meet the needs of parents. The key challenge with free nursery education is the level of funding. More hours is good news for parents but for nurseries this means more hours of "free" care that they have to subsidise when funding does not cover costs.'
FUNDING STILL CRITICAL
The major concern of many providers regarding the implementation of the EYSFF has been the shortfall in what the local authority allocates per hour per child and what it costs them to deliver the 'free entitlement'.
Claire Schofield says that feedback to NDNA indicates that while nurseries have adapted very well to the practicalities of delivering a 15 hour flexible entitlement, funding remains a critical issue.
'Research by NDNA indicates that on average providers are losing 98 pence per child per hour. For a nursery providing free nursery education for 40 children this is a loss of over £22,000 per year - unsustainable for any business, but especially for a small, single-site nursery. Achieving a fairer rate for free nursery education is the number one concern of many nurseries.
'Worryingly, some are saying that the amount of funding they are receiving is less. In some cases, nurseries are claiming that free nursery education money is being spent elsewhere within education due to the pressure on local authority budgets. NDNA is monitoring this situation, and highlighting the critical importance of ensuring that funding is paid at a sustainable rate and that providers receive a fair deal.'
