- Sector warns it has hit ‘crisis point’ as DfE updates guidance on extra charges.
- New Early Years Voice campaign launched to start legal action against the Government.
- Thousands of nurseries and childminders sign an open letter calling for implementation of guidance to be delayed.
The sector is uniting to launch a legal challenge against the Department for Education (DfE) if it refuses to delay implementation of revised charging guidance for the funded hours, which early years providers have warned will ‘threaten the viability’ of provision.
A new campaign group, Early Years Voice, has been set up by early years providers to raise money to cover legal proceedings should the DfE refuse to delay the implementation of the guidance by six months and adequately consult with the sector.
It follows an open letter signed by thousands of nursery owners and managers urging the DfE to delay it to give early years settings a chance to introduce the changes without ‘compromising the quality of provision or financial sustainability’. At the time Nursery World went to press (20 March), 3,156 senior leaders, representing 5,043 early years settings, caring for 310,736 children, had signed the letter.
The updated guidance, which was published on 21 February, clamps down on nurseries charging ‘voluntary extras’ to parents, including, for example, nappies, meals, snacks and trips.
The DfE said it was not seeking to stop providers from being able to charge for voluntary extras. However, it said in line with a recent High Court judgment (see overleaf), charges must not be mandatory or a condition of accessing a funded place. It said this has always been the case.
The DfE stated it has updated existing statutory guidance for local authorities, and that this guidance must reflect the law governing the delivery of the early education and childcare entitlements, which has not changed.
As the entitlements are expanded, it is important that they remain accessible and affordable for families, it said. The department has clarified the statutory guidance as it relates to additional charges and said ‘their priority is ensuring there is clarity and consistency for parents and providers.
‘The guidance also emphasises transparency at the heart of how the entitlement should be passed on to parents, including that any costs should be clearer on invoices and websites. However, for these new transparency expectations, the guidance allows a lead-in time until January 2026 to give providers time to adapt.’
What is Early Years Voice?
The Early Years Voice campaign group, a not-for-profit company, aims to bring providers together to raise money to fund legal action against the DfE, which could include an injunction to pause the implementation of the guidance.
One of the campaign founders is Ian Morgan, director of Little Ducklings Nursery in Berkshire and Puddleduck Nursery in Oxfordshire. Diane Wycherley, chief operating officer at Tops Day Nurseries, will act as a director of the campaign group. Morgan told Nursery World, ‘I've been in business for 18 years and this is the worst thing the Government has done to us. The opportunities to get more income have been completely wiped out.’
The updated guidance
Published on 21 February, the updated guidance for local authorities, effective from April, emphasises that parents must be able to access a funded place completely free of charge and any additional costs passed on to families should be voluntary. It also says any charges should be made very clear on invoices and a setting's website by January 2026. Providers must ensure their invoices break down separately into:
- the free entitlement hours
- additional private paid hours
- food charges
- non-food consumables charges
- activities charges.
The guidance makes clear that any charges for extras, such as nappies or sun cream, optional activities ‘not necessary for effective delivery of the EYFS in connection with the free hours’ and meals and snacks, must be voluntary.
Many early years providers have raised concerns that allowing children to bring a packed lunch to a setting could cause a health and safety risk if they cannot store them at the correct temperature, and that it poses a risk to children with allergies and intolerances as they may come into contact with foods they cannot eat.
The guidance confirms that providers can charge parents for any additional, private paid hours according to their usual terms and conditions if taking up these hours is not a condition of accessing a free place.
It states that providers cannot charge parents top-up fees for the supply or use of any materials and business running costs, including staff wages. They cannot make registration fees and non-refundable deposits a condition of a place.
Artificial breaks in the entitlement hours are also not allowed.
Following the guidance update, some local authorities have changed their provider agreements for the new funding term, leaving owners of settings questioning whether they should sign the contract and continue delivering the funded offer if money from parents to cover underfunding is no longer guaranteed.
Jo Callaghan, owner of Munchkins Nursery, a group of six sites across Essex, said she has signed the agreement ‘under duress’ because it will be parents that suffer if she doesn't accept the funding to deliver the expanded entitlement.
Nursery World understands a number of other providers are also considering doing the same. However, Callaghan did say that if all parents refuse to pay a voluntary contribution then she will have to pull out of delivering the funded offer, as the business won't be viable, contravening her agreement as a company director.
Open letter
The open letter to the DfE states, ‘We are writing on behalf of early years education providers across the country to express our serious concerns regarding the imminent implementation of the new Early Years Funding Statutory Guidelines. While we understand the importance of evolving funding frameworks to meet changing needs, we must highlight critical deficiencies in both the consultation process and implementation timeline that threaten the viability of early years provision nationwide.’
It goes on to highlight how the DfE did not ‘meaningfully’ engage with the sector ahead of publishing the new guidance, as the consultation was short and at a time when providers were focused on ‘end-of-term responsibilities’. Also, that ‘key stake holder groups representing small providers were under-represented in discussions’.
The letter argues, ‘This limited engagement contravenes the Government's own consultation principles, which emphasise the importance of proportionate and meaningful consultation when introducing significant regulatory changes.’
It calls for implementation of the guidance to be delayed by six months due to the ‘insurmountable practical challenges’ it poses, including ‘complex administrative changes requiring substantial staff training, new reporting requirements which necessitate significant modifications to existing systems, budgetary adjustments that require careful financial planning’.
The letter requests the DfE:
- Delay implementation of the new guidelines by at least six months.
- Re-open meaningful consultation with the ‘full spectrum’ of providers.
- Establish a working group including representative providers to refine implementation plans.
- Provide adequate transition funding to support providers through necessary changes.
‘It's not workable’
Claire Kenyon, director of Children's Garden Day Nursery (pictured above right), which operates two settings in Stamford and Norwich, told Nursery World, ‘This is the first time I've seen people say “I just can't do it any more”.
‘Like most private nursery owners, I didn't set my business up to be not-for-profit. The expectation that we should work for nothing or minimum wage is beyond me. Why is it that an electrician who has a Level 3 qualification is paid almost twice as much as nursery employee with the same qualification level? Why is their job valued more?
‘My parents will probably carry on paying, but it becomes a little bit harder each year as they become more and more vocal about what they are entitled to. It's because [the funded hours] been sold to them in a certain way for so long.’
Natalie Bishop, managing director of Little Years Nurseries, a group of three settings across North Yorkshire, said, ‘A lot of people in the sector have said they feel like we have hit a real crisis point. It has been hard in the past, but this is just unworkable, especially for a lot of the smaller, individual settings that probably fell into it because their nursery was closing and they wanted to keep it running for the good of the community.’
The nursery group currently charges an hourly consumable resource fee of a maximum of a couple of pounds across all age groups to spread the cost. It does offer completely free places for which parents can go on a waiting list. These places are normally for children coming from social services or similar.
Bishop said it has not had any parents refuse to pay the charge yet, mainly because they have seen how their bills have gone down since the expanded offer came in.
She said that without the additional money from parents, it could be forced to make staff redundant and there are very few jobs available in the local area for them.
‘It doesn't feel like anyone is thinking about the children. What happens when nurseries shut? Parents will have to try and find another setting. Without that, children will miss out on early education’, she argued.
The National Day Nurseries Association (NDNA) has written to early education minister Stephen Morgan also calling for a delay to the implementation.
Purnima Tanuku, chief executive of NDNA, said, ‘We strongly support the messages in the open letter because these are exactly the points we have written to ministers about on behalf of members.
‘The whole sector has been left very confused and frustrated with the updated statutory guidance. We have spoken to many members and networks who have said councils are rapidly changing their advice with lots of variations and inconsistency, which is a recipe for disaster.’
High Court
Tops Day Nurseries, which operates 33 nurseries, is preparing to go to the High Court to seek a legal injunction against the updated guidance.
The group has formally written to the Education Secretary calling for a six-month postponement of the 1 April implementation, saying that the ‘rushed four-week turnaround’ of the changes after budgets for the year had been shared with parents is ‘unacceptable’.
Tops said it is planning to seek an urgent injunction ‘to prevent implementation under these financially unsustainable conditions’.
The group is also part of the Early Years Voice campaign and said it intends to take legal action either on its own or as part of the wider campaign, should the DfE not pause the implementation.
What is the High Court judgment?
The DfE's latest change in the updated entitlement guidance, which has caused such consternation among providers, has been prompted by a recent High Court judgment.
Bournemouth, Christchurch and Poole Council went to the High Court to attempt to quash a report by the Local Government and Social Care Ombudsman (LGO) from October 2022, in which the LGO upheld a complaint by a parent, referred to as ‘Mr X’, of maladministration against the council.
The parent had initially complained to the local authority in 2021 about extra charges he was required to pay the nursery where he was taking up a funded place.
The judge rejected all six grounds of challenge brought by the local authority, finding no reason to quash the report and dismissing its application for an order preventing its publication.
The judgment states, ‘Mr X complained that the Council was responsible for maladministration when it failed to uphold a complaint he had made that he was wrongly required to pay fees to a privately operated nursery where his child was provided with childcare as part of the government's Free Early Education Entitlement (FEEE) scheme.’
The nursery was operated by Tops Day Nurseries. ‘The Nursery was named as an Interested Party in these proceedings in the claim form but has taken no part in these proceedings.’
David Lock KC, sitting as a deputy judge of the High Court, said, ‘In summary, the Council's case is that the LGO made errors of law because it misunderstood how the FEEE statutory scheme operates and submits that those errors of law should lead to this court quashing the report.’
Commenting, a lawyer for Tops said it was ‘very surprised’ that the DfE was using this judgment as its ‘vindication’ for updating the guidance, ‘especially when they had the opportunity to come to court and argue their point and they refused to do this’.
Micah Faure, chief legal officer for Tops, said, ‘It was quite curious for them to reference their case, because the DfE were asked to become a witness for the claimant or for the defendant. And on that invitation, they wrote back to say, no, they're declining to be a witness because they think the guidance is fine, and what everybody else is doing is okay, and they've actually amended the guidance to make it easier for providers to charge the way they charge.
‘And actually the judge in this particular case, though I respect what he says, I think it was completely wrong. The judge does actually say that he's minded that this case should not be used to set policy’ – or as a precedent for other LGO cases.
He added that he felt the judge was even ‘inviting it to be appealed by saying a higher court might proclaim on this one way or another and make it final’, and said his judgment should not be taken out of context. ‘He was very minded that it might be used for making policy and that it shouldn't be used in this way.’
Faure said Tops had considered appealing ‘but hadn't foreseen it would be used in this way [i.e. lead to a change in DfE guidance]’.
The DfE has acknowledged Tops's letter, he said. If it does not pause the guidance after 14 days, they will approach the court and ask for ‘urgent interim relief’ and for it to be postponed until the matters that are in their letter of claim are addressed.
Tops is pursuing a judicial review and seeking an urgent injunction. Faure said, ‘The judicial review says that we need to look again at the guidance, but while we're looking again, we need to pause it being applicable, which is the injunction part.’
Faure added, ‘We're taking them to court on the basis of three things: that they haven't carried out an impact assessment, that they've acted beyond their powers in the way they've interpreted the Childcare Act, and that it's unreasonable in the way they've implemented it, giving weeks to drastically change how they [providers] operate.’
'We're advocating for rights of nurseries across England'
Diane Wycherley, chief operating officer at Tops, said the lawsuit was based on previous guidance, which was updated and has now been updated again.
Is the DfE using this case as justification for the guidance change because they are worried about more court cases between local authorities and parents over the funding? She said, ‘I don't see the DfE are concerned about that at all. I'm going to be honest with you, because they weren't the ones that were sued. So, I think they have put the local authorities in a position that they now have over governing private businesses.
‘The problem in all of this is due to the lack of funding. If they paid us the correct rate that it was to actually be sustainable as businesses and provide the education we want, then actually we wouldn't have to put any extra charges or consumable charges to parents at all.’
She added, ‘So, sadly, we've got a whole new guidance, which we're told by some local authorities supersedes the current provider agreement that we've actually all signed for the funding year. We are governed by that.’
Echoing what other nurseries have told Nursery World, Wycherley said she has received several different versions of new provider agreements from local authorities with different rules about charging for consumables, with some sending reworked versions of the guidance, and another putting in ‘very strict measures’.
She said, ‘One local authority is saying that you can't charge for blankets and sheets, basic care for children, first-aid supplies, staff training.’ She described the experience of trying to deal with different local authorities as ‘like herding ducks’.
Commenting on the Early Years Voice campaign, Wycherley said, ‘We know there is space for every single one of us. Doesn't matter on size, type of care that you provide, or pedagogy you follow, there's a place for everybody. We're advocating for rights of nurseries across England.’
