Neil Fenton, director of finance and social enterprise at London Early Years Foundation (LEYF), said that there is a lot of ‘wastage’ in some nurseries, which could ultimately put them out of business.
But he added that this trend could be reversed ‘if nurseries see what a sustainable business looks like’.
He says that if managers and owners are taught how to manage their finances correctly they could pass the savings onto parents by reducing fees, making provision more affordable and accessible for families.
The director of finance and social enterprise implied that lots of people who open a nursery do so because they love children not because they are business-minded, and argues that in order to start a nursery, owners need both a love of children and some level of business acumen.
Another pitfall for some nurseries, he said, is that they have become reliant on grants to keep them going, which up until a few years ago were readily available.
Mr Fenton said, ‘The main issue with nurseries is that they are not efficient with staffing. There are lots of ways to minimise costs by matching the number of staff to children. It’s not an easy thing to do to begin with, but if nurseries have a plan in place they can get it to work. Settings should also avoid using agency staff as they are very expensive.
‘Pricing can also prove to a problem for some nurseries as they don’t know how much money they need to meet costs. The savings nurseries can make are staggering. Most of the time it is simple changes that can make the difference.’
He added, ‘At LEYF, we offer ongoing training to all of our nursery managers, which covers financial management - income, expenditure and collecting debts, how to treat staff and stay within the law.’
Apprentices at LEYF also undertake money management training.
‘We are currently working on a template to deliver similar training to other nurseries. It is vital this kind of training is done quickly for nurseries who need help, otherwise there could be detrimental consequences for the sector.’
Stella Ziolkowski, director of quality and workforce development at the National Day Nurseries Association, said, ‘While there is no exact figure for how many nursery managers or senior staff have undertaken financial training, there is evidence to suggest that providers need support in this area.
‘Due to funding restraints, nursery managers tend to put training for their staff first which can then mean that training for managers themselves, such as financial management, is not always seen as an immediate priority.’