An owner of a medium-sized nursery group, which provides childcare in nurseries and children's centres in deprived areas, has now come forward to tell of his experience, saying that he is set to lose £24,000 in funding for missed hours after a council audit.
The owner says he wants to stay anonymous because his business relies on free nursery education funding.
We highlighted cases such as Darnell Community Nursery in Sheffield, which was audited in September for the summer term and billed £2,082 for unused funded hours, which was deducted from the next term's funding.
Sheffield City Council confirmed that following audits, £4,154 had been reclaimed from 15 nurseries and said that 'in the majority of cases the funding in question should not have been claimed'.
Training and support group Early Years Equality said that the practice was widespread and that it had received similar reports from providers in several areas.
However, some other local authorities named in our story have denied that they are clawing back funding from nurseries.
Kirklees Council and the local authorities in Rochdale and Leeds say that settings in their areas are not being asked to pay back funding for missed free entitlement hours.
Rochdale borough council said, 'A small number of providers have been asked to repay money where the second payment due to them is less than the payment given at the beginning of term (i.e. they have been overpaid), but this is due to less children attending than projected, not parents claiming fewer hours than their agreed entitlement.
'At no time has Rochdale ever reclaimed money from a provider for times when parents have collected their child early, a child is off sick or on holiday and we have no plans to do so in the future.'
Kirklees Council also denied it is reclaiming funding for unused free early education hours.
In a statement, the council said, 'We would like to make clear that Kirklees Council does not reclaim funding from providers for non-attendance where providers have acted reasonably. Providers are required to monitor attendance and encourage improvement where appropriate but it is recognised that, beyond this, non-attendance is outside their control.'
Paul Brennan, Leeds City Council's interim lead for learning, said, 'Local authorities are required by law to conduct audits on early years providers to ensure funding for free places is properly administered.
'Payments may be adjusted for a variety of reasons, such as duplicate claims, but Leeds City Council has never clawed back any funding for a child not attending the hours they have claimed.
'Regular attendance at school is a key priority for children's services in Leeds and we recognise how important the early years are in establishing this. Should we become aware of any attendance issues, Leeds City Council would work with providers to find ways of improving attendance, rather than claw back funding.'
Chrissy Meleady, chief executive of Early Years Equality, said, 'It was a relief to providers to hear from Rochdale, Kirklees and Leeds councils that they would not take back funding from providers for free early learning placements. It is good to see councils where providers have concerns clarifying their position.
'However, the fact remains that the DfE Code of Practice and localised agreements with providers do give the opportunity for clawing back monies from providers in a range of ways.
'Providers say they should not be held liable for parents/carers failing to attend these hours.
'There is no statute compelling families to ensure their child's attendance, nor do providers have any statutory right to demand from parents reasons for not attending.
'Despite this, providers in some areas are being penalised very unfairly as a result of things beyond their control.
'Providers also want to know what the reclaimed money is being used for. We ourselves have asked this question in many quarters but have not had one single reply. We will continue to advocate for fairness to prevail.'
£24,000 BILL: NURSERY GROUP OWNER'S STORY
Our local authority audited our settings in October 2010. There are six settings, including some in children's centres.
In August 2011, we were faced with a total bill amounting to £24,000 for a reclaim across the six nurseries.
We contested the process and were threatened that if we did not admit 'fault', then the contract for provision of NEG would be withdrawn.
We have struggled in our children's centres to make the settings viable in some of the most deprived areas of the county. Even today they could still be regarded as marginal in terms of viability.
The council examined our registration records going back to September 2007.
They then counted the hours each child had attended and took back any hours that were not made up to 15 hours per week.
In some cases there were administrative errors on our part, but not in the majority of instances.
Our nurseries have been unfairly penalised as one of the largest providers in the county and also the first to be audited.
I now understand that in future, nurseries will only have their current attendance audited.
How are we to make a children's centre viable when parents are at the very least suspicious of nursery, and in one of our settings if it rains then children do not attend?
This is not the fault of our nursery, but relates to the attitudes within that community.
How can we, as childcare providers, ask hard-pressed and deprived families to make up the difference between care delivered and care paid for under audit conditions?
We were asked to sign the contract for NEG in April 2011. The council have applied the rules in that contract to all care delivered since 2007. This has been done without consultation.
The council has gone from an exceptional early years authority to one that views early years as the answer to a council funding shortage. The council is now withholding approximately £6,000 from the next four NEG payments.
All we as providers and childcare professionals are trying to do is give our parents the hours and conditions they choose for their child - surely what the Government intended.
If parents choose to collect a child early, or not attend for short hours, that is their choice and nothing to do with the provider. Parents opt for the hours under no pressure from the setting.
We then deliver this care to the best of our ability. We cannot control when a parent chooses to bring their child, so why are the providers who are able to provide the service when requested, forced to return monies when parents choose not to attend?
We provide the service from 07.30 to 18.00 and are open for NEG children between these times.
If councils wish to charge an individual parent for hours not attended, that is fine, but we have staffed for these children and given care and meals.
There is a common belief in council circles that independent providers have deep pockets. It can only be seen as a cynical attempt to claw money from a perceived wealthy source. Providers will know this is not reflected in reality.
The early years department have been as supportive as they can be, remembering they are still working for the same body as the audit.
Delegation of NEG to local councils should be taken out of local administration to a central authority.
I never thought I would say this, but - bring back nursery vouchers! Keep the money away from councils. As local childcare providers we are in daily direct competition for children with the funding agency of the private sector. No other industry would accept this as fair or correct.
The council are currently revising rents for their buildings and threatening to increase rents for children's centre childcare providers. In one case a provider is being asked to pay approximately £22,000 a year when they have been paying £6,500.
Our nurseries can not survive without NEG at this point.