How do you charge??

[lor]

Hi There,
Have a couple of children (different families) who will be entitled to the funded 15 hrs from Jan2016 - the hourly rate pd by my LA dosen't match mine and I don't think I am allowed to just add on invoice,

Anyone got a formula they dont mind sharing???

Thanks in advance x x

[bunyip]

There are some differences in how local authorities (LAs) administer this, but I expect in this instance they all do the same. However, if in Scotland it works completely differently.

Our LA insists we deduct the hours (not a nominal charge) from the invoice. This must be clear on the invoice.

The formula is therefore very simple:

Total hours attended for the week, minus funded hours = total hours to be charged. Multiply this by your normal hourly rate, and Robert becomes your father's brother.

If you do it any other way, you are likely to run into trouble with the LA and potentially lose entitlement to offer funded hours.

You must not charge a higher rate for children on funded hours or anything else that smacks of a 'top-up' fee. I would advise not to offer any other sort of discount, such as a daily/weekly rate or sibling discount. They are already benefitting fromt he free hours and you're already losing by being under-paid by the LA.

I believe you can charge extras for meals. But you must not make meals or any additional (non-funded) hours a condition of providing the "free" hours.

[lor]

Hi Bunyip,
Sorry to be a pain but does this mean your working at a loss?? or do you increase your hourly rate (the hours worked outside of the free 15 hrs) to make up for this (just so your daily fee remains the same -with some being pd for by LA and the rest made up for by the parent) the charge parent your normal daily rate in the holidays.

Sorry if I havent made any sense - I've just read it back to myself and even I don't understand lol

Thanks in advance x x

[bunyip]

Hi Bunyip,
Sorry to be a pain but does this mean your working at a loss?? or do you increase your hourly rate (the hours worked outside of the free 15 hrs) to make up for this (just so your daily fee remains the same -with some being pd for by LA and the rest made up for by the parent) the charge parent your normal daily rate in the holidays.

Sorry if I havent made any sense - I've just read it back to myself and even I don't understand lol

Thanks in advance x x

First, just to clarify, I think the word "loss" is misused a lot when people debate this issue. Don't worry, it's not you. This has me screaming at my TV set every few months when some CM or nursery manager is on saying how the funding "does not cover the cost of providing childcare". In economic terms, a "loss" means it costs more to provide the service (ie. food, fuel, resources, etc.) than you earn, and so the best thing to do is get out of the business and find another job.

Providing funded care does not mean anyone is making a "loss". Instead, they are making less profit i.e. they aren't making as much out of the place as they would be if the full fee was being paid for those hours.

OK, got that off my chest.............................. so now let's answer your question.

(Btw, no - you are not being a pain............. a lot of the world of childcare is weird and daft and confusing.)

The following assumes the LA pays for funded hours at below the CM's usual hourly rate (which is usually the case.) In short, you really cannot stay within the funding rules and still earn the same amount from a funded child's place as you'd make from a non-funded child using the same place, hours, etc.

Any attempt to charge more for the paid-for hours would be seen by the LA as a "top-up" charge, which is outlawed. In any case, you cannot demand they use any more than the funded hours: if they only want 15 hours, you cannot make them take more.

You can define particular times of day as your 'funded sessions' - which can have the effect of forcing people to take more hours than they'd choose to, but that's about all.

Part of the current debate about the proposed increase to 30 funded hours pw is concerned with the 'lost' earning potential and if the scheme if therefore sustainable or not. There's a lot of concern that CMs and nurseries will have to charge more to all clients because the funded hours eat away at the profit margin. The overall effect would be that the parents of under-3s would face big fee increases to cover the 'lost' earnings from funded 3-4yo's.

[k1rstie]

Hi Lor. Bunyip has explained the 'loss' really well. There is an ever larger 'loss' than the difference between the funded rate and your rate. Your children are coming into entitlement in January 2016 may want to use their funding, remember it is their right. If you are unable to offer funding, they may well move to a setting where they can use their entitlement, so in fact your total monthly income would be lost. The child might be with you for 50 hours per week, the funding would only be for 15, and the child could move to another childminder or setting so they can use their funding.

I had a child on 2 year funding ( 2 year funding is another can of worms). I calculated that when they turned 3, their funding would be worth £7 per week less than my normal rate for 15 hours. This would be about equal to one and a half hours pay. I would have rather have earnt 48 and a half hours pay for a 50 hour week than lost the child to another setting, and had to try to fill the space and the hours.

Sorry if I have rambled on. I hope I have explained myself well.

[alex__17]

I'm sure there's a paragraph in the provider agreement saying additional charge can be made for providing food and outings but you have to give the parent option of not paying for them ie providing their own food.
I'm about to start funding for 1 existing child that attends 10 hours a week and although the rate is lower than my hourly rate parents have said they want to pay for meals and outings on top (I've told them they can provide food).
The amount I cost a cooked meal, snack and breakfast and the outing we go on pretty much makes up the shortfall give or take a few pence.

[bunyip]

There are some ways round this.

I for one do not like parents providing food. They may provide it, but Ofsted still hold us responsible for the "healthy" content which is problematic when you have parents like ones I've had in the past, who send jam sandwiches and cheesey string. Worse still, the EHO hold us responsible for the standard of the food, even when provided by mum, and we have no way of knowing if that food has been exposed to unwashed hands, sneezes, bacteria, broken chill-chain, etc. In short, we carry all liability and have zero control.

One alternative is to define 'funded sessions'. eg. 9am-noon, then 1pm-6pm. You can then charge for the hour's attendance (noon-1pm) and charge for a meal served within that hour. It's within the rules (well, at least as far as our LA is concerned) because you give mum the option to take the lo home for lunch during that hour. Tbh, it's a bit of a fag and looks a bit sneaky (probably because it is a bit sneaky) but then the LA is being even sneakier by under-paying CMs whilst 'top-slicing' the funding money it receives from Whitehall before passing on the rest to us.

I know someone in the local funding office here, who says there are other ways round it. There's nothing to stop us charging a higher rate for all 3 &4yo's. That's because a 3-4yo is not necessarily a funded child. They don't qualify for funding until the term after they turn 3, and a child may be using all their funded hours at another setting. But you couldn't apply that to funded children exclusively. Nurseries use different fees scales for different ages (due to different ratios) so the principle of 'fees by age-group' is pretty well established.

But I think ultimately, we end up either 'taking the hit' of inadequate funding or raising fees across the board: which means the funded families are cross-subsidised by the non-funded ones. This is far from scientific, but anecdotal evidence suggests that fees in general are rising as more and more CMs start offering funded hours.

[Becka]

First, just to clarify, I think the word "loss" is misused a lot when people debate this issue. Don't worry, it's not you. This has me screaming at my TV set every few months when some CM or nursery manager is on saying how the funding "does not cover the cost of providing childcare". In economic terms, a "loss" means it costs more to provide the service (ie. food, fuel, resources, etc.) than you earn, and so the best thing to do is get out of the business and find another job.

Providing funded care does not mean anyone is making a "loss". Instead, they are making less profit i.e. they aren't making as much out of the place as they would be if the full fee was being paid for those hours.

OK, got that off my chest.............................. so now let's answer your question.

(Btw, no - you are not being a pain............. a lot of the world of childcare is weird and daft and confusing.)

The following assumes the LA pays for funded hours at below the CM's usual hourly rate (which is usually the case.) In short, you really cannot stay within the funding rules and still earn the same amount from a funded child's place as you'd make from a non-funded child using the same place, hours, etc.

Any attempt to charge more for the paid-for hours would be seen by the LA as a "top-up" charge, which is outlawed. In any case, you cannot demand they use any more than the funded hours: if they only want 15 hours, you cannot make them take more.

You can define particular times of day as your 'funded sessions' - which can have the effect of forcing people to take more hours than they'd choose to, but that's about all.

Part of the current debate about the proposed increase to 30 funded hours pw is concerned with the 'lost' earning potential and if the scheme if therefore sustainable or not. There's a lot of concern that CMs and nurseries will have to charge more to all clients because the funded hours eat away at the profit margin. The overall effect would be that the parents of under-3s would face big fee increases to cover the 'lost' earnings from funded 3-4yo's.

I was interested in reading this thread for my sister and I must say you've explained it very well. Basic and clear.

So thank you for posting.