Nurseries fight for survival: The Good, The Bad and The Ugly

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Issues concerning free entitlement and the government cuts to frontline childcare services are causing many nurseries and their staff significant concern for their future existence.

Many childcare providers and parents refuse to admit defeat against government decisions, joining together to help save their nurseries.

We’ve put together three case-studies of nurseries who decided to fight for their cause. Each have the same purpose of providing quality childcare, but experiencing diverse results.

The Good

Goldsmiths Nursery was due to close in September 2010, however pressure enforced by parents and staff influenced the successful result of remaining open for at least another year.

Classed as ‘unsustainable’, the nursery was met with strong support from parents and staff who argued that the closure would cause serious disruption to child development and a shortfall of childcare in the area.

Parent power

As shown in the video below, nursery officials were confronted by disgruntled parents demanding explanations. One protestor commented that officials ‘have no idea of the market they are dealing with’ however it is they who have the power and control of the nursery, rather than those with the years of experience and knowledge behind them.

Additional routes to campaign included a Facebook page which currently has support from 391 members and a dedicated blog.

The campaign website admits that while they have secured a small victory, their campaign is still very much alive.

The Bad

Bright Start Nursery is facing closure next April after the council deemed the nursery flawed under the current financial backing.

The extinction of the 51-place Brighton setting would see eighteen nursery staff lose their jobs and 73 children potentially without childcare provision.

The council subsidy for the nursery for 2010/11 is £87,000. The council has said it needs to save £7.1 million from the Children and Young People’s Trust budget for 2011/12.

The council’s report said that the nursery building needs ‘a substantial capital investment’ of £230,000, including work on the children’s toilets and the heating.

Parents and staff are campaigning hard to reverse the decision. More than 3,000 people have signed a petition against the closure. This was further supported by a protest march through Brighton at the end of October against the spending cuts in the area.

Liam Sheerin, who has a daughter at the nursery commented “To change her nursery at this stage would be disruptive and upsetting – and for some parents, especially those whose children start school in September, it would be disastrous, as finding an alternative nursery to take their children for just five months is nigh on impossible.”

You can offer your support to their campaign by signing their online petition. Regular updates and calls for support are also published via their campaign blog.

The Ugly

Parents with children at the Poppets Monterssori Day Nursery were met with a shock closure last month.

The Kent-based setting was suddenly shut over the weekend without any warning to parents. Open on the Friday, the 40-place setting was boarded up by the Saturday. Staff received text messages telling them the business had gone into administration.

Shocked parents revealed that no indication was given and some had even paid for childcare services in advance.

Parents have praised the jobs of staff in the setting but are understandably frustrated that the owners gave no warning of the troubles ahead. One staff member described the owner as having ‘lacked any interest in the business other than collecting the money’.

Is your nursery currently facing the prospect of closure? How do you feel about the fact that people with little or even no knowledgeinterest in childcare have the significant power? Drop your comments below.

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15 thoughts on “Nurseries fight for survival: The Good, The Bad and The Ugly

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  • January 20, 2011 at 8:04 pm
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    The only pressure on councils to fund PVI settings adequately is their duty to secure sufficiency of the free provision (sufficiency as defined by the last Labour edicts and measured every two years by the council officials themselves.) If that isn’t flawed enough, I really don’t believe anyone in government has any intention of policing the councils’ performance of their statutory duty. Now they don’t even have to provide childcare in Children’s Centres! That says it all. Our local one is closing because the council couldn’t find anyone willing to operate it. Soon the only high quality childcare and education left will be for the very wealthy only. And ironically all Labour’s fault.

    Reply
  • December 21, 2010 at 10:03 am
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    As a local authority officer who’s been struggling with the top-up issue for 5 years, I can tell you we did consider finance costs and rents in an early draft of our formula, but were steered away from it by Government guidance that advised we could not incorporate actual cost elements, especially for premises, despite our finding that this generated the widest variation in provider hourly rates in each sector.

    Similarly with top-up fees, the new Code of Practice and the Conservatives’ failure to follow through its pre-election noises on “toddler top-ups” have backed local authorities into a corner, in which providers and ultimately parents are likely to lose out. A subsidy works better in terms of managing a diverse market – but an entitlement is clearer for parents in terms of expectations. Unfortunately, funding levels in the future will probably mean that only less well-off parents will receive that entitlement.

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  • December 15, 2010 at 3:49 pm
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    All of the responses cobtain an element of self evident truth. A large part of the reason for the dispute is that all of the correspondents are different. If we are going to arrive at an equitable level of support and the SFF we have to have a single business model. Should you get more because you have a large loan or mortgage to pay? If so, when the repayments come to an end will you repay the government or local authority for the subsidy that you will have received to purchase an asset?
    I doubt whether any authority has thought of including finance costs in it’s funding formula in the same way that they have not, as far as I know, included rents or cost of capital employed, either actual or notional, for maintained settings.
    Unless and until we can sort out a transparent formula to cover all settings, a significant proportion will feel hard done by because they are able to cover outgoings from the fees that they can charge which may be significantly more than the local authority will fund because they cannot take account of all individual circumstances.

    Reply
  • November 25, 2010 at 8:29 pm
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    The so-called ‘free’ childcare places are a joke – and the joke is on us, the providers! I seriously object to the fact that I am legally required to offer at least two ‘free, 15 hours only’ places AND that I must keep these places open until 6 weeks before the start of any term – thereby having to turn away any prospective full-time (paying) families! I am a business – are any other types of business restricted by the Govt in this way?
    What would happen if large companies were told that they have to provide goods or services for less than their cost prices? It simply would not happen as the Govt would not DARE to require this. Childcare is a soft target though.

    I am actually, currently!, in a lucky position as my Nursery is usually fairly fully booked and as such, I do not often have a ‘free’ place to offer.
    When I write my monthly newsletters to parents I remind them that, if they are on maternity leave or are temporarily financially stretched, they can apply for these places – I can take the loss of income for a short period and, at the end of the day, they are previous fee payers and will, hopefully, be paying full fees again in the future.

    I also do not believe that it is in the best interests of any child (bearing in mind that I am only obliged to offer 2 completely free places out of 40) to be placed in a Day Nursery for just 15 hours a week, missing out on mealtimes, day trips and other extra-curriculum activities, whilst their freinds are attending for longer and benefitting from activities which they are excluded from. This is not ‘inclusion’

    Another thing that Day Care providers should bear in mind is that you can refuse to take children for the free entitlement if this means that you will have to employ extra staff.
    For example, if your Nursery is 3/4 full and, at the time, you have a qualified staff ratio (exluding students, outside specialists etc) which only covers these children, plus any who have already accepted places for that term/year, you cannot, legally, be required to employ extra staff to allow you to take on extra children under the scheme.

    My final observation is that, when I started my first playgroup 28 years ago and my Nursery, 20 years ago, there was no funding available except for children who were ‘in need’, which was provided by Social Services.
    The parents who attended my Playgroup and Nursery, at that time, were mostly able to fund the places themselves – and we obtained grants for those who were not.
    Now we have a situation wher EVERY family, whatever their income level, is ‘entitled’ to the free 15 hours, which providers have to subsidise, whilst those that are genuinely in need are finding that there is a shortage of available places – my own Borough reports that they have +/- 8% of needy children who cannot find a place in a Playgroup/Nursery.
    With all the cutbacks that the Govt are proposing, surely it is time that they also re-thought the NEG entitlement and made it available to those families who are ‘in need’ only?

    Reply
  • November 25, 2010 at 3:55 pm
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    I have sadly opted out as I would have gone out of business in less than 6 months with funding only! Parents choices have therefore been limited and they are being forced to go to places that don’t provide the quality of education thier children have a right to.
    Without the right to pay top up fees many parents are being forced to accept less than they or their chlidren are surely entitled to and deserve.
    These children are our future and they are being deprived of a good start in life.

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  • November 24, 2010 at 9:28 pm
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    In reply to Gary Wilson’s comments, when I set up my nursery 12 years ago the number of hours funded was 10, top up fees were allowed, the funding system had not long been running as prior to that parents were given vouchers and it was possible to run a business, afford resources, pay staff well, cover my outgoings (rent, food, etc) and make a profit which paid my salary. If I was going to set up a nursery business now, I would certainly think twice about it and probably would not bother. It is not a case of “relying” on Government subsidy: if you are in the FEEE scheme, which is helpful to parents, you have to rely on what you are given, which is very little (and does not meet the true cost of most nurseries’ overheads these days). The hourly funding rate has increased in pence, not pounds over the last 12 years, eg. 26p increase in 2009, none in 2010 for Essex settings. None of us want to rely on the Government at all and if top ups were allowed we would not need to rely on it. I may pull out of the scheme if I cannot recoup my costs from other services I provide – why should I supplement the Government because it is unable to? I have my own family to feed and cannot afford to lose £30,000 per annum simply because the Government can’t afford to pay me but won’t allow parents to pay me either!

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  • November 19, 2010 at 4:33 pm
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    I work in a pre-school and we (the staff) are constantly reminded of the struggle to keep sufficient funds coming in to keep up with overheads. To maintain our high standard we need all our current staff but there is a real threat of us losing someone to balance the books. We will be having a meeting with the parents next week about finances, any suggestions how to get parents on side and top up funding.

    Reply
  • November 18, 2010 at 7:17 pm
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    What is Gary talking about? Clearly he doesn’t own or run a setting within the PVI sector.

    Gary, allow me to explain in brief. The government funding is not for us it is for the parents. It is the parents funding. I would be more than happy to withdraw from this underfunded scheme if it were not such a great subsidy for the parents. I don’t get government funding for my nursery. I do feel however you do have a point – why don’t the government just give the ‘free’ entitlement directly to the parents and then we wouldn’t be made to make up the shortfall. Saying this, I am withdrawing from the scheme in January so one less nursery available to use to prop up government policy

    Reply
  • November 15, 2010 at 2:43 pm
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    I agree totally with Libby. As a nursery that has children from 0-5, we have had to raise prices more than we would have done for the younger ones to compensate for the discrepancy in funding from the 15 hours free entitlement children. Despite putting my prices up, and being busier than this time last year, our income is still down. That has to be down to the raising of the 12.5 free hours to 15.
    For nurseries who only cater for pre-school children, goodness knows how they are going to survive when they are forced to sell their sessions at £3.41 an hour. (That’s Birmingham’s rate). Oh and by 2015 they will have to pay a graduate to lead them, how will they afford that!

    Reply
  • November 15, 2010 at 2:28 pm
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    Sounds as if Gary is not in the child care industry going by his comment. I’m the manager of a medium sized private nursery and I agree with libby that to be a partnership provider with the council actually hits us in the pocket and costs us money, due to their demands. In no other industry in the private sector would this be entertained, but we are supposted to just grin and bear it! A lot of council nurseries could be financially managed better, which could perhaps prevent closures.
    Bad form to any nursery that doesn’t deal with a closure properly – you have a responsibility to your children, staff and parents and must face the situation and let people have their say, if it can’t be avoided, it can certainly be managed better – boo to Poppets Montessori Nursery

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  • November 15, 2010 at 12:19 pm
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    As the owner of a small chain of private nurseries I have long urged the government to rethink its funding of the 15 hrs free entitlement. The amount we owners are being paid doesn’t come close to covering costs and the Code of Practice is such we cannot make up the shortfall. What this means is that either 1) my business becomes unsustainable (not an option) or 2) I yank up the prices for those not covered by the funding. Therefore ordinary hardworking parents are having to subsidise the funded children. How can this be fair? The government must rethink the Code of Practice before the entire industry is destroyed. In my small area I know of 3 nurseries that have closed – how many more must go before people realise the significance of this appalling legislation?

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  • November 15, 2010 at 11:45 am
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    It has long been my opinion that if a nursery is in either the voluntary or private sector it should not rely on Government subsidy. All providers should ensure that that their business are real.

    Of course one should be part of The FEEE programme as it is very beneficial for parents – but you cannot set-up a business that is reliant on it.

    Gary Wilson

    Reply
    • November 15, 2010 at 1:45 pm
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      We do not ‘rely’ on it but it has rather been forced upon us! Unless ALL PVI’s pull out unanimously there is no choice but to stay with it! There is not a PVI in my area that feels they can pull out – we are almost damned if we do damned if we dont….and I wouldnt mind but my mind is constantly on my business, trying to think of ways to make it more sustainable so that my whole family and the staff and children that we care for dont suffer but I am at a loss…………feeling very alone although knowing there are so many of you out there in the same way….
      I opened my business because I have a passion for children and their families NOT so that I could be dictated to by large corporations….who I can employ what I should pay them…how much I can charge…
      If the childcare costs came direct to the setting that would help. I concur with others on here..Care to Learn, Universities, Tax credits should get there act together…we deserve the money regularly and on time…I am still waiting for payments since September…what happens if parents pull out for whatever reason.. where do we stand then…?
      I havent got a problem with help but look at other countries and implement their excellence PLEASE

      rant over for this lunchtime…watch this space!

      Reply

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