Local authority tells settings not to charge for funded twos

• Bournemouth, Christchurch and Poole authority recommends no ‘extras’ for disadvantaged twos
• Settings increasingly unable to bear funding shortfall

As providers increasingly move to charging parents of disadvantaged two-year-olds for ‘extras’, one local authority body has recommended settings refrain from doing so.

The unitary local authority Bournemouth, Christchurch and Poole (BCP) Council decided to issue the advice after some providers last month said that while they had no option but to charge for additional services for funded places in general, they aimed to waive or reduce charges for disadvantaged families, to help to reduce barriers to accessing a place.

Government guidance says providers can ask parents of funded children, for both universal and targeted places, for additional money to cover anything outside of childcare, such as meals and consumables, but a place cannot be dependent on a parent agreeing to pay.

Nursery World understands that initially providers across the country were unlikely to charge parents of disadvantaged two-year-olds, many of whom may need extra support, to cover extras for moral reasons. However, in the past six months, increasing costs and stagnant funding have meant many settings need additional money to cover funding shortfalls.

The National Day Nurseries Association said many of its members cannot afford to offer two-year-old places without charging for additional services.

Providers in BCP receive funding of £4.95 per hour, per child to deliver two-year-old places. The local authority’s 2019 providers agreement states, ‘It is recommended that providers waive additional charges for children eligible for two-year-old funding, EYPP or the deprivation supplement.’

A spokesperson for the council told Nursery World that the ‘recommendation is a matter for each provider to consider, in line with their business and local community needs.

‘Providers are encouraged to develop clear and transparent charging policies, allowing parents to make an informed choice as to whether the provider is right for them and their child. In attracting an eligible two-year-old, the provider is likely to retain them as a three- and four-year-old and possibly with a 30 hours entitlement, which would help with business planning.’

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NDNA chief executive Purnima Tanuku warned that fees and charges for funded two-year-olds could be a barrier to families taking up a place.

She said, ‘Access to high-quality care for these children is key to maximising their life chances. We understand that fees and charges for these families could be a barrier to taking up a place.

‘We want to see as many eligible children accessing the funded two-year-old places as possible. However, in order to maximise this, the Government needs to address the sector’s funding concerns. Many members can’t afford to offer two-year-old places without charging for additional services.

‘The Government’s own evaluation uncovered issues for eligible two-year-olds accessing places, saying that local authority budgets were inadequate to assist low-income families take up funded childcare or support children with additional needs. It also concluded that the offer was neither free nor flexible for their parents.

‘We’re getting a mixed picture from the sector about how individual councils deal with the issue of charging parents of disadvantaged two-year-olds, so this is a real concern for the consistent delivery of the funded hours policy.’

However, James Hempsall, director of Childcare Works, said he believed that not placing additional charges on funded places could be a missed opportunity.

He explained, ‘Now is the time for all local authorities to look at their contracts and their support for providers and parents.

‘Families have access to claim from a wide range of such sources of support to reduce the cost of paid-for childcare services, including Tax Free Childcare, Universal Credit and Working Tax Credit. A pound charged to a family receiving help through Universal Credit may only cost them as little as 15p.

‘No-one wants charging to be a barrier, but not using these additional sources of funding is a missed opportunity.’

Neil Leitch, chief executive of the Early Years Alliance, said, ‘Local authorities were always going to struggle to continue their supplementary funding as their budgets decreased and, while the end of that financial support would be a significant loss to providers at any time, it’s especially tough when two-year-olds funding levels are estimated by Ceeda to be around two-thirds of delivery costs. It’s a situation which leaves providers with little choice but ask parents to help make up the shortfall.

‘I can understand why local authorities might feel they should intervene on behalf of families entitled to funded places but, until the Government faces up to its responsibilities and covers the true cost, increased parent charges will be inevitable.’

Case study: LEYF

LEYF Angel Nursery, Pimlico

London Early Years Foundation (LEYF), which operates 37 nurseries across the capital, places no additional charges on children in receipt of two-year-old funding as it says parents can’t afford it.

Operations director Mike Abbott told Nursery World, ‘Government statistics published in March 2018 showed 4.1 million children are now living in relative poverty after household costs, accounting for more than 30 per cent of children in the country. LEYF is a social enterprise working to support long-term social change for children and their families – many of whom are from socially deprived areas. Over the past two years, more has been expected from nurseries to fill the void where there is limited financial support.

‘We believe child poverty can be tackled. It doesn’t have to exist. It doesn’t have to be hurting the lives of hundreds of thousands of children. Charging additional costs would preclude some of the most deprived children from attending our settings.

‘LEYF nursery managers often need to advise parents on finances, benefits and support they are entitled to as other services have let them down. In our Marks Gate Nursery we have opened a food bank to support families.’

Mr Abbott said the two-year-old funding from the Government does not cover the cost of providing care, but they are able to cross-subsidise places.

‘As a social enterprise, we invest our profits back into supporting the community we serve. Our fair fee system across our nurseries enables us to subsidise up to 37 per cent of children who would otherwise be unable to attend nursery’, he explained.

‘We use a cross-subsidy model where fees from private places and hours support the under-funded Government hours, and where higher fees from nurseries in more affluent areas support losses in areas of deprivation. Our fees are still very competitive since we are not driven to maximise profits.’