The government figures about increased ratios impact on costs, fees and pay   4 comments


So today’s news is all about this document

Where a Freedom of Information request has resulted in the release of the governments reasoning for increasing ratios and how it will lead to higher pay for early years practitioners, lower childcare fees for parents and higher qualifications for staff.

I acknowledge that I do not run a nursery, that I do not have a degree in Maths – and that I am writing this in the very short period of time when the children in my care are having their nap. So this is just a quick snapshot of my initial thoughts – I am sure that someone will come along who has more time, more knowledge and a calculator to hand.

So this is what I think;

  • Do any childcare businesses base their financial figures on 100% occupancy? I would be surprised if they do because everyone in the childcare sector knows there are times when 75% occupancy is hard to achieve. Also due to the part time hours that many parents require even if a full quota of children are on the books there will still be times when there is a gap in hours of children using the same place. There will be times when parents cut hours for various reasons, there will times when parents lose their jobs or move or are on maternity leave. There will be times when lots of children leave at the same time to go to school or to go to the maintained nursery for their FE hours.

Without a doubt there will be times when any childcare setting is not at 100% occupancy

  • Yes, a lot of the children are 3 and 4 year olds – and almost all of them are in receipt of the FE funding – so for those hours the fee to parents is not set by the childcare provider but by the government. Therefore you can not just multiply number hours by hourly fee.
  • The government are requiring a lot more places for funded 2 year old places – therefore the potential 1:13 ratios and associated income increase will not be achieved as the space in the nursery will be taken up with 2 year olds
  • Is the government suggesting that early years settings let their loyal staff with out degrees go – so they can replace them with graduates? (the example suggest that, as the staff not currently degree level). If not who is going to pay for the staff to gain these qualifications, to pay for staff cover etc – while still not able to operate at higher ratios as staff yet to complete  their degree. What if one of the degree qualified staff goes off sick – what will happen to the ratio’s then – will it possible or financially feasible to hire temporary degree level cover?
  • I see that national insurance and pension mentioned as a cost – but does this figure also include holiday pay, and more importantly sick pay (as I think staff will go off sick  more frequently with stress, with back injuries and so on). If the ‘admin’ person is covering for sick leave – what happens if need more than one person to cover on some occasions – if long term who is actually doing the admin?
  • Who is preparing meals, cleaning and so on – because IF 100% occupancy achieved the staff working with the children won’t be able to do this task – because of the ratio requirements?
  • Who is attending the ‘team around’ child meetings – and any other meetings – which are bound to increase in number due to the increased number of funded two year olds?
  • How are staff going to access week day training events if at 100% occupancy – additional staff – maybe agency or bank staff who cost more per hour might need to be employed.
  • What if a setting is currently charging less than the quoted figures – the % related figures will all need adjusting.  Many settings also offer a weekly fee which works out at a lower fee for the parent per hour – so again the figures won’t add up
  • Would a decrease of around 50p an hour really make a difference to those families who receive tax credits, as if getting say 50% help with fees that is only a saving of 25p per hour, and if getting 70% a saving of only 15p an hour. And for those in receipt of 15 hours funding it is not a full week of hourly savings that will be made.
  • Oh – and do the government think all nurseries have 60% staff costs, 14% non staff costs – AND therefore 26% profit????

My time is up – as my little ones are starting to stir- I am sure there are a ‘lot more holes’ in this example that I have not mentioned but as a final point

  • How does this all relate to childminders or pack away groups that may operate morning / afternoon sessions rather than full daycare?

4 responses to “The government figures about increased ratios impact on costs, fees and pay

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  1. 26% profit would be a dream! A good blog post as always Penny… raising key points.

  2. Well said Penny. This document is at best a joke, at worst an insult to hard working early years leaders who know the model (and all its challenges) inside out.

  3. Why are the government assuming that if a company makes more money they are going to give it away to its customers – the banks don’t so why should self employed small businesses?
    Do they think we are stupid, “yes ill take on more work, more stress and more expenses for no extra gain” – I don’t think so

  4. Great to see increased ratios for child care workers. They really deserve it!!!

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