Introduction
Abbotswood was established in 1995 and has been a family business ever since. We pride ourselves on offering a truly unique childhood experience for all children and parents in our care, our main goal is to make every child ‘life ready’, letting imaginations develop through curiosity and our love of the great outdoors.
Abbotswood has been grown on our love and passion for childhood outcomes and we also take huge pride in our extensive staff team to deliver the high quality childcare experience we strive for. We have exceptionally high staff retention and make every effort to ensure each of our staff understand our vision. Staff well-being and development is paramount to us. We know the happier our team are, the better the service we can offer.
Leadership
Abbotswood’s leadership team comprise of Blue Simmons (our owner and director), Roxanne Gregory (training and operations director), Nicola Healy (office manager), Sabrina Greenaway (Nursery Supervisor) and Jessica Maynard (training & nursery supervisor with qualified teacher status). All of us but one are mums. We know what it’s like to take time from work to have baby, to return to work in a new world as career woman and mum. We also know the cost of childcare can form a barrier to returning to work. This blog should outline a bit more about our stance on the current funding schemes for childcare and what this will look like into the future.
Childcare is a business
It is important to remember that childcare providers are businesses, just the same as a building company, or café. We receive no grants or support for operating and have the same costs as every other business:
· Staff wages – due to working in strict legal ratios (babies 1 practitioner to 3 babies, toddlers 1 practitioner to 4 toddlers, pre-school 1 practitioner to 8 children). On average 65 -75 % of our income goes on staff wages.
· VAT Exempt. Childcare businesses cannot charge VAT but must pay VAT on everything we buy which we cannot claim back.
· Business rates. Providers in Scotland don’t pay business rates but we do. The valuation office recently changed the way that childcare providers pay rates which has cost us nearly 1/3rd more each month.
· Business costs. HR, insurance, waste, utilities, accountancy, mortgage, pensions, taxes.
· Operational costs. Resources, equipment, appliances, repairs, maintenance, staff training, staff compliance, food.
The government talk about childcare like we are working on their behalf, but provide no support to us. Everything we do comes with a significant cost, and we must make a profit as all businesses do.
Government funding
30 hours ‘free’ funded childcare
In September 2017 the government rolled out ‘free’ childcare for eligible 3 and 4 year olds.
Childcare providers were not consulted with on how best to operate the scheme and as a result, not only has it been funded inadequately, it was left open for all providers to run it with their own business models as best they could. Strict guidance was applied to running the scheme which made it all very confusing for parents and childcare providers. The government knew and still know that the funding provided was well under what nurseries were already charging, there is a huge gap in the charged day rates to the funding rates which needed a top up. The guidance however states that top ups are not allowed and that nurseries must offer fully free places to families which for us, is not sustainable or viable.
No business should have their income controlled or restricted and to our knowledge, no other business is treated the same as early years.
Existing issues with the 3 & 4 year old funding
· The hours are not ‘free’ – this is advertising spin for parents to encourage us back to work. The hours are funded and under funded.
· The funding has increased by just £1.27 per child per hour in 7 years which desperately out of line with inflation and National Minimum Wage increases.
· 30 hours is term time only. Abbotswood do not offer term time only childcare, we are open all year round to support working parents. So our hours are offered at 22 per week (this is called stretched).
· 22 hours do not fit into any working weeks or our working day. Our funded hours are claimed across the first days of each child’s booking pattern which means on the 3rd day, only a few hours are funded and the rest must be charged at our hourly rate.
· We are not allowed to charge a top-up it must be called a consumable charge (which we all know is covering the funding and chargeable difference but we’re not allowed to say it is). Some providers now call this a sustainability charge. We’d like to call it ‘ the gap between what the government give us and what we charge’ charge…
· Charging a consumable charge misleads parents into thinking it doesn’t need to be paid in times of absences or holidays, but it absolutely must be to ensure we remain sustainable. It is monies that the setting would be receiving in full fees and absolutely must be met to insure continuity of business.
· The government claim that the consumable charge is to cover the child ‘care’ element, as the government advise their funding is for child ‘education’.
· We receive payment from our local authority; Hampshire County Council, 3 times a year (termly) which means there are several months of the year that we must have the cash flow to support delivering the childcare prior to receiving the monies for doing so. This is in excess of £20k in staffing costs per month for 3&4 year olds.
· Administration. Every local authority uses a different digital platform to administrate funding, they are all notoriously badly put together and take significant hours of time to fill out and submit which must be done by us at the nursery for which we receive no payment. For 3&4 year olds this currently takes 10 hours per term plus the calls, emails and messages we receive from confused parents to clarify what they are entitled to.
· Codes must be verified by us, the provider and not the local authority so we have to chase every parent if they have not renewed their code and break the news if they are trying to claim within a grace period.
· The funding forms are not laid out in a way that is easy for parents to understand.
Ultimately, the way in which the free hours are offered, delivered and paid for has resulted in huge issues within the sector. Thousands of nurseries have closed. In our local area, 4 nurseries inclduing 2 Bright Horizon’s have closed since December 2023.
The scheme has meant providers who don’t charge the consumable fee cannot pay staff any more than minimum wage so thousands of qualified staff have left the sector. Abbotswood are proud to pay our staff properly, no no one is paid on minimum wage and all of our team work a 4 day week.
The above points have been raised with the government and have been increasingly covered by the media over the past 7 years.
We want all of Abbotswood parents and new parents to know that since 2017, we have been more active than most nurseries in campaigning for better funding for funded / ‘free’ childcare hours. Our owner has participated in government discussions at the Palace of Westminster, has been in touch with every Minister of Early Years in post, has had countless conversation with our local MP; Caroline Nokes. Last year we spoke to the Childrens Minister, but were fobbed off with advice irrelevant to our query. We are active in a number of campaigning pressure groups, have written letters, attended marches and nothing has worked to support the funding for childcare.
Funding for 2 year olds and younger
The funded hours to 2 year olds is due to start in April. Due to the above mentioned significant issues with the 3&4 year old funding, we will not be offering the funding for 2 year olds or younger children until we have better information to work from.
Unfortunately we have very little confidence that we will be reimbursed properly for the scheme, and will not be permitted to operated in a way that enables us to charge the difference from the funding we receive, and our current day rate. The rate we have been advised for 2 year olds is over £1 less than our current hourly rate and we have not been reassured that any funding will be increased with inflation and national minimum wage. We have also requested to be paid monthly like most other providers but have been advised that this is unlikely to happen until April 2025 at the earliest.
We were made aware of the scheme to extend the funded hours to younger children via the media at the same time as families. We have received very little guidance and information. The funding rates were published in the newspapers to support the advertisements for ‘free’ childcare – however, the published funding rates are not what we receive from the local authority.
Not only has the scheme for 2 year olds and younger been poorly thought out, against the advice of the sector and our supporting bodies (the NDNA and the EYA), but it again does not support families in the way that it should be. Again it is 30 hours dressed up as 22, (11 hours instead of 15) the code application and continuation of the code is confusing and there have been significant technical issues.
The government have been advised to take the bureaucracy around the funding away, and give families the funding directly so that parents can choose where they use their funding and how. Groups such as Pregnant then Screwed have tirelessly campaigned for these issues to be addressed and to support parents with accessing childcare for younger children yet it’s the same issues.
For us at Abbotswood, reflecting on the past 7 years and the issues and losses we have suffered as a direct result of taking on the 3&4 year old funding, we wanted to make sure that if we decided to offer the 2 year old funding and younger, that it will work for our business now and into the future.
We apologise for any inconvenience this decision may cause to new parents. We can confirm we will continue to operate and deliver the 3&4 year old funding and promise to be continuously reviewing our decision which we may choose to reassess in September 2024.