Nursery owners’ desperate measures to survive

• Childcare providers reliant on partners’ wages and help of family to get by.
• Some taking on other work, taking out loans or dipping into pension pot.
• One nursery owner leases her home on AirBnB to make extra money to support her setting.
• A volunteer has lent the setting he works around £50k to pay wages and bills.
• Childcare providers are relying on financial support from family and friends or additional income revenues to keep their businesses afloat.

A thread on the Champagne Nurseries, Lemonade Funding (CNLF) Facebook group reveals that for a number of nursery owners and childminders, the only way they can continue to run their settings is with financial help from their husbands, partners and family members, or by using other streams of income.

Several said that if their partner did not earn a good wage, they would not be able to continue in early years.

Liz Burnett, manager of Rotherfield Village Pre-School – a term-time-only setting – told Nursery World, ‘I am very lucky that my partner has a good job. His money runs the household.

‘Last year, I earned £6,500. I wouldn’t be able to do this (run the setting) without my partner. One pre-school closed near us the other week.

‘We have several staff who have second jobs. One works in a café and does hairdressing, another does cleaning, and other staff do babysitting.

‘We aren’t offering the extended entitlement as we are only open 30 hours a week. On the 15 hours of funding alone, we lose money.’

A number of providers have even taken on third jobs for extra income, while others have sold their car, taken out loans, cashed in pensions early or used inheritance to make ends meet.

On a shoestring

Julie White, owner of Nature to Nurture, Nursery World’s Pre-school of the Year 2017, is financing the running of the setting by taking on additional work and finding other means of making money (see box).

Elsewhere, Keith Appleyard, treasurer of Five Ways Playcentre, has loaned the setting around£50,000 since August 2016 to cover wages and bills. He explains, ‘I’ve been the volunteer treasurer for 30-plus years and I’ve never experienced the cashflow problems we have now.

‘Our cash reserves have gradually been depleted, but it accelerated around this time in 2016. I realised we didn’t have enough money to pay the staff; so I had to cash in a Personal ISA in order to lend £9,000 (payroll was £28,000).

‘I wasn’t in a position personally (I’m retired) to make a permanent loan or gift to the setting (it’s enough I give my time of 10-20 hours a week pro bono), so I made periodic short-term loans to meet the payroll, and then I would recover the loan as and when the bank balance could support it. This peaked in November 2016 at £11,500 (on a £450,000 annual turnover).

‘We were in the clear for April-July 2017, but then in August we needed another £4,000 top-up for the payroll (tax, National Insurance and pension of over £4,000 had to wait for cash to come in during September). This was despite July/August having £6,500 in advance payments, deposits etc. for the next term, so the true deficit on 31 August 2017 was more like £14,500.

‘In September we increased our fee by 7 per cent from £5.60 to £6 [an hour], while our funded rate remained flat at £4 (for the fourth year in succession). We introduced a pay freeze for the first time in 20 years in order to try to keep costs down.’

He continues, ‘Since then I haven’t had to loan any more money, though things have been “tight”, often with less than £1,000 to our name. I’ve already put £10,000 to one side for August.’

A Department for Education spokesperson said, ‘The rollout of the offer of 30 hours free childcare for working parents of three- and four-year-olds has been a success with latest figures showing that 294,000 children are now benefiting. The offer saves hardworking parents around £5,000 per child per year. We are spending more than any other government on childcare – around £6bn a year by 2020 – because we want every child to get the best start in life, and we are making excellent progress in our mission to help as many families as possible access high-quality, affordable early education and childcare.’

Julie White, owner of Nature to Nurture

Julie White (pictured right) opened Nature to Nurture in January 2012.

Ms White has a first-class BA honours degree in early years leadership.

Rated Outstanding by Ofsted, Nature to Nurture, based in Croxeth County Park in Liverpool, is Merseyside’s only outdoor nursery and Forest School.

Ms White says, ‘I’m a single mum and heavily reliant on tax credits. Some months I can’t afford to pay myself. I am very much dependent on parents paying fees and receiving funding from the local authority on time. When I don’t get the money in time, I have to borrow thousands of pounds from my family to pay wages and bills.’

Of the children that attend the setting, 80 per cent are taking up a funded place. The setting also runs home education groups for school-age children, which parents pay for.

‘To make extra money, on occasions I lease out my home on AirBnB. I do training as well, which helps to hold up the pre-school, but because I need a hip replacement I haven’t been able to do as much as normal,’ says Ms White.

‘I’ve just written a book, so hope that will be extra income. I’ve also gone back to university as I knew I would be able to get a bursary, so am doing my master’s.’

Ms White says she can’t afford to socialise and buys clothes from charity shops. She recently had to let their only teacher go as she couldn’t afford him.

She adds, ‘I’ve had to add a charge for parents taking up the 30 hours. We receive £4.10 per hour, per child from the local authority, whereas the true cost of a place is £6. It was tricky justifying this to parents as we are an outdoor setting, don’t have any resources other than what is in the forest and don’t offer meals. The charge is for consumables, workbooks and admin.’