For the education sector, it is September not January which marks the beginning of a new year, with all the changes that brings. This September saw the national roll-out of the 30 funded hours for eligible three- and four-year-olds; something that has been looming on the horizon ever since the policy was first announced in 2015.
While settings share many of the same challenges in delivering the 30 hours, nursery chains have some extra decisions to make, such as whether their approach should be the same for all settings in the group or vary depending on the needs of individual sites. Groups with settings in different areas may also find that the conditions imposed by local authorities vary, meaning a model that is accepted in one area is more difficult to run with elsewhere.
Communicating to parents
Nurseries, struggling with funding rates that are lower than their fees, are developing models which will allow their businesses to remain sustainable. However, parents have been sold a vision of ‘30 free hours of childcare’. This means nursery groups are in the position of having to explain their offer to parents.
‘We had to send a letter to all our parents,’ says Katya Ozols, director at London nursery group Cybertots, which runs five settings. ‘Ninety-nine per cent were OK, but one per cent have been very angry even though their fees have dropped by half, because they had expected it to be totally free.’
Kiddi Caru, a chain of 20 settings in central and southern England, promoted the offer through its newsletters to parents. ‘We found the whole process quite straightforward,’ says marketing manager Caron Moseley.
‘We did a whole marketing campaign to all families, pushing the Childcare Choices website. We had one case where the nursery manager knew some families would be entitled, and she was literally standing at the front door and saying here is the Childcare Choices card. Parents seem to be more laid back than us, we have really pushed it to them.’
Kiddi Caru put together a step-by-step guide to the process that parents would have to go through so nursery managers could support them. ‘We had an internal mini conference with a slot on Childcare Choices and the 30 hours, so there was no confusion on our side about how we are going to deliver it,’ says Ms Moseley.
In some cases, nursery groups have expected a higher take-up, but found that many parents are ineligible. ‘We have one rural, one town and one city nursery,’ says Tricia Wellings, owner of the Bright Kids group of three nurseries and five out-of-school clubs in the Midlands. ‘In the city, some parents wouldn’t qualify as they are very high earners, in the rural areas both parents aren’t necessarily working, but in the town parents are more likely to qualify. In our 24-place town nursery, 14 children are eligible, where in the other settings it is just two or three.’
Disadvantaged areas
Some nursery groups in disadvantaged areas have found that they have had very little take-up. ‘We only have five children accessing the offer across our six nurseries,’ says Joanne Ryan, divisional director for children and families at The Big Life Group, a social enterprise set up to serve disadvantaged communities in the Manchester area.
‘We know unemployment levels are high in the communities we serve. Lots of parents asked us about the offer, but it became clear that they would not be eligible.’
For the children who do access the funding, the group tries to be as flexible as possible. ‘If they want 10 hours for three days a week, we can do that if the setting is open for those hours,’ says Ms Ryan. ‘We do charge for lunch, but children are allowed to bring a packed lunch as we know many of our parents wouldn’t be able to afford to pay.’
Action for Children’s 44 nurseries are located across the country, including in some of the most disadvantaged areas. ‘Our nurseries are in very different areas and numbers of children accessing in some areas are really low – in some there are none at all,’ says Ruth Pimentel, interim director of nurseries at the charity.
‘The most we have in one nursery is 20 children. It is a big challenge for us ensuring nurseries remain viable when we often go into areas others wouldn’t,’ she continues. ‘The challenge will be whether the demand increases to the point where we can’t offer places, then we will have to have a difficult conversation, as some of our settings are quite small and close to capacity.’
Action for Children has implemented a new piece of nursery management software called FAMLY across all its settings. ‘This helps us to help parents understand what they are paying for and what they are not when it comes to invoicing,’ says Ms Pimentel.
Stretched offer
All 20 of Kiddi Caru’s nurseries are offering the 30 hours. ‘The majority of our parents are working parents, and they want to access the offer throughout the year, so we are running a stretched offer across most of our settings, except the very few that are only open during term-time,’ says Ms Moseley.
‘We have had questions about parents using two separate settings, especially if one is stretching the offer and one is not, in which case doing the calculations is challenging – but we have done that before with the 15 hours, so it is not new.’
Kiddi Caru sent out a questionnaire to parents in advance of the roll-out so they could estimate how many hours would be required. ‘We asked if parents were entitled to the additional hours, would they be looking to take on more days, and nurseries were able to gather that information and get an indication of what take-up could potentially look like,’ says Ms Moseley. ‘We have been very organised, and I think that’s why we haven’t really had any issues with parents – we have been totally honest with them.’
Additional charges
While government guidance says that nurseries are allowed to make additional charges, it also says that a completely free offer must be available. Nursery groups have been exploring different ways of interpreting this guidance in practice, sometimes hampered by varying expectations from different local authorities as set out in the local agreement for each area.
‘The way we deliver varies across settings, as some are sessional, some are not, some are open all year round, some term time only,’ says Ms Pimentel. ‘We listen to what parents want, while trying to make sure it’s viable at the same time.’
Action for Children has introduced a meal charge for those accessing the 30 hours. ‘It has been pretty well received,’ says Ms Pimentel. ‘We are discouraging packed lunches wherever possible, because of the risks around food safety, such as making sure the food is at the right temperature and allergies, and we are encouraging parents to take up the meal option. We understand there are ways of making more by charging for other things, for example upping the rate for fee-paying children, but we are trying not to rob Peter to pay Paul. Until we know the real numbers and see how it affects occupancy we are cautious about how we see it going forwards, and we are very open to changing the model if needed.’
Kiddi Caru, on the other hand, has opted not to charge for meals. ‘We have gone for a very simple approach so we can explain it to parents,’ explains Ms Moseley.
The Mama Bear’s Day Nursery and Pre-school Group, with 23 settings across the South West, has also opted not to charge for meals. ‘We believe that meals are an integral part of the curriculum and a big part of the nursery day so we don’t want to see parents opting their children out of this,’ says owner Tony Driffield. ‘Our policy is completely free of charge with no hidden charges or requirement to commit to additional sessions or other costs.
‘I thought about additional services, but it ends up getting messy, with parents saying “we want this, but not that”,’ says Ms Ozols. Instead, Cybertots is limiting the number of hours available each day and charging for additional hours.
Sustainability
‘Our settings are in three different counties,’ says Bright Kids’ Ms Wellings. ‘The funding rate does not cover the fees we charge in any of them. We have to make up the difference one way or another if we don’t want to be in financial deficit.’
Bright Kids came up with various models and presented these to parents so that they could ask questions and feed in any other ideas they might have had. The 30 hours is only available as a stretched offer over 48 or 51 weeks of the year. A flexible model allows children to attend whatever sessions their parents prefer, with the funded hours acting to subsidise the overall cost.
The nursery charges higher rates for the additional hours. For example, a child might attend sessions from 8am to 5.30pm for three days, and a parent would pay a daily fee of £14.41.
For parents who want a completely free offer, the group offers a limited number of funded-only places, but these must be taken at specific times, namely from 1pm to 5.45pm five days a week for 48 weeks a year. The settings ask for a voluntary contribution for food. ‘You have to offer something for nothing to meet the legislation,’ explains Ms Wellings.
A third option allows parents to take their funded hours over 48 weeks, during specific sessions, but pay extra for lunch and ‘enhanced resources’, which include snacks, lunches, trips outside the nursery, parties, equipment or gifts that the children take home such as for Mother’s or Father’s Day and other such specific activities.
‘Most parents take 30 hours for three days a week, and get around 22 hours funded, paying for the difference,’ says Ms Wellings. ‘We talked them through it all with a Powerpoint presentation, and told them we were underfunded by the national Government, which they have accepted.’
Some nurseries are anxious about making additional charges but Ms Wellings says the local authority has also accepted their approach. ‘Some believe the Government says it should be free so it should be free, which is fine, but when funding rates are going down but costs are going up, we see nurseries closing and it is such a shame as it needn’t happen,’ she says. ‘We know our model has been approved because we have had audits by the local authority.’
Chain benefits
For some, the fact that they are a nursery chain makes little difference to their delivery of the 30 hours. ‘I don’t think being a chain makes much difference,’ says Ms Pimentel. ‘The important thing is transparency about how fees are calculated.’
For others, however, being part of a group brings benefits. ‘If a question arises in one local authority we can share experience from elsewhere – this is how they dealt with that situation in Plymouth,’ says Ms Moseley. Being a chain can also help with sustainability. ‘We have always promoted meals as included in the price, and being part of a group we are able to continue to do that through economies of scale,’ she adds.
‘I don’t think it’s harder to offer the 30 hours as a single setting, but maybe single-site managers don’t have the skills and knowledge that the chains will have,’ says Ms Wellings. ‘I have offered training on the 30 hours for the past couple of years, supporting managers to make it sustainable, and I believe everyone can make it work if they create models that suit their business.
‘You get a group of owners in a room and they say, “I didn’t realise I could do that”, or “my local authority said I couldn’t do that”. The Department for Education is very woolly in its advice, which makes it difficult for local authorities and providers to interpret, but having said that, some local authorities do try to impose conditions that aren’t anywhere apart from in their own minds.’
What next?
Cybertots’ Ms Ozols has concerns about her group’s ability to continue to offer the 30 hours. ‘There has been a difficulty with staff recruitment since the requirement for GCSE maths and English,’ she says. ‘That decision has been reversed, but it will be a couple of years before people start coming back. We not only have to keep up with the National Living Wage but pay above it, or our staff are poached by other nurseries. We are receiving more enquiries about the 30 hours, but to deliver it we will need more staff.’