Delivery of 30 hours 'challenging' for biggest nursery groups

The move will potentially affect thousands of parents as combined the two groups run more than 385 nurseries in England, providing places for nearly 40,000 children.

In common with many other providers, Busy Bees Childcare, the largest nursery group in the UK, and The Co-operative Childcare, which was ranked sixth largest in November 2016, say that they are having to restrict the times and days parents can take the 30 hours and charging for extras such as meals to deliver the scheme, because of low funding rates in some local authority areas.

It follows comments from the children and families minister Robert Goodwill that Busy Bees and The Co-operative Childcare are keen to deliver the places at the funding given.

He has also said in the past that he is ‘confident levels of funding are sufficient’.

There have also been suggestions from smaller childcare providers that larger nursery groups will be able to sustain any losses occurred because of the underfunding of the 30-hours without having to ask parents for more money.

However, a statement on Busy Bees Childcare’s website posted on 5 September reveals Busy Bees' own concerns about the sufficiency of the 30 hours funding.

It states, ‘The initiative of supported childcare is obviously of great benefit to all parents and supported by all providers. Over the last 12 months Busy Bees actively sought opportunities to test funding models by taking part in pilots wherever possible. We are equally as concerned about the low fee rates from some local authorities and onerous conditions placed on the contract in terms of how entitlement has to be delivered.

‘Providers will be aware that the ability to provide places is heavily influenced by nursery location and overheads, together with the funding rate paid by the local authorities (LA), as well as any conditions that these authorities place on the delivery of the funded hours. In nurseries where our daily fee is lower than £50, we offer places which are completely funded and depending on location, in some of these settings we have managed to do this without asking for any voluntary contribution.

‘To ensure sustainability in the remainder of our nurseries, our 30-hour offer is delivered differently, only possible by varying the number of funded hours per day as the funding rate falls well short of the normal daily rate charged which makes the delivery unsustainable; offering entitlement either in stretched hours over the whole year or allocated in 3 hour slots, meaning parents requiring additional hours will be charged for the wrap-around care, combining a mixture of privately paid and funded hours.

‘Like all providers, Busy Bees must comply with LA contract agreements and as such will be under scrutiny in line with all other providers.

‘It is not a one size fits all and we have attempted to work with LAs to find a model that worked for each nursery. This will be reviewed on a site by site basis to assess the impact and where necessary will be changed. We will not be in a position until we are further on in the process to say whether we can continue.’

Nursery World contacted Busy Bees for further comment. The nursery group's managing director and co-founder Marg Randles, said, 'When you make the decision to open a nursery you have to take into consideration the cost to operate, and set your fees accordingly. Over the last few years there has been enormous pressure on providers to improve salaries, ensure their staff are well trained and to deliver outstanding care. All of this has to be taken into consideration when setting your day rate. It is also good business sense to attempt to factor in a surplus to ensure sustainability and allow for future investment and innovation. We have nurseries all over the UK and each nursery sets its day rate accordingly. 

'Understandably, where a provider deems it necessary to charge £60 per day to provide parents with essential support and peace of mind, £40 per day funding does not work. This is particularly the case in smaller nurseries with under 50 places where there is little opportunity to increase occupancy to close the gap on the shortfall in income. All indications suggest that additional government funding will not be made available until 2020. Robbing Peter to pay Paul is not an option as it will be more about moving a problem than solving it. I remain to be convinced that a universal offer is the way forward. Something needs to be done so that the funding is directed to where the greatest need is which would allow Local Authorities to be more flexible on the funding rates giving all childcare providers the chance to deliver better opportunities for children.'

Speaking on the BBC Radio Kent Breakfast Show on Monday (4 September), Sally Mayer, chief operating officer at The Midcounties Co-operative Childcare (pictured right), said, ‘We are not able to offer the scheme the way the Government has sold it.

‘We charge for meals and non-funded areas of the day.

‘The same as other providers, it’s best to offer a less flexible model than not [offer the places] at all.’

Speaking to Nursery World, Ms Mayer added, 'When the 30 hours initiative was introduced, we wanted to look at what we could do as a co-operative to make sure that eligible parents within our communities received the full benefits. At The Co-operative Childcare we’ve adopted the scheme in a way that works for us, so we can maintain our high-standards of care. The funding available doesn’t cover all the costs associated with operating our nurseries, so we will be introducing fees for funded parents to cover services such as meals and trips, and there will also be some reduced flexibility on the days available during which funded parents will be able to use their hours. However we have also ensured there is no increase in childcare costs for families with non-funded places and we’re able to continue paying our colleagues above the national living wage.

'Our current parents have reacted positively to this scheme – we’ve seen the biggest take-up from our existing member owners, who will see a big difference in their childcare charges. By doubling the existing 15 hours free childcare to 30 hours, the scheme will offer more support to parents and guardians across the UK and particularly benefit those looking to get back into work or increase contracted hours. We’re pleased to have adopted the scheme in a way that works for us, our colleagues and parents.'

Given the comments from Busy Bees Childcare and The Co-operative Childcare, the Champagne Nurseries Lemonade Funding campaign group, which has 17,000 members, has written an open letter to the children and families minister urging him to reconsider calling the 30 hours ‘free’.

Minister for Children and Families Robert Goodwill said, 'We are investing a record £6 billion every year by 2020 in childcare – more than ever before – and doubling the free childcare available to working parents to 30 hours a week, saving them up to £5,000 a year per child.

'This funding includes an additional £1 billion per year by 2019-20 to pay for the free offers and to raise the national hourly rate to local authorities for three- and four-year-olds to £4.94 per hour. 

'Providers can choose whether to offer 30 hours and what pattern of days and hours they offer parents. It is also entirely reasonable for providers to charge parents for additional extras, such as meals, nappies and trips, but this cannot be a condition of the child’s place.'