New charges guidance to “cut costs for parents”
The Government has put out new ‘Statutory guidance for local authorities on the provision of early education and childcare‘ to early years providers in England emphasising that these charges made to parents must be voluntary.
When nurseries are facing rising costs such as National Insurance Contributions increases from April which the Government has admitted are outside the current funding rate changes, this is going to be cause challenges for providers.
Although the principles of the new guidance, remain the same as previous versions, in that providers can charge for elements of places that are not part of the funded hours, the tone has shifted to emphasise that charges must be voluntary and clearly set out for parents. The DfE has specified what can be charged for and includes examples of what nurseries cannot include in these charges.
It also sets out how invoices should be structured and what charging information should be published. The new guidance includes examples of what may constitute “artificial” or “unreasonable” breaks in provision.
NDNA is raising this at the highest level to make sure that this updated guidance does not threaten nurseries’ sustainability and makes it clear to parents that the funded offer does not include meals.
Purnima Tanuku CBE, Chief Executive of National Day Nurseries Association (NDNA) said:
“The majority of nurseries are already following best practice on being clear with parents about their offer and what any extra charges are, associated with the funded childcare offer. Providers work closely with their families and fully understand their circumstances and work hard to accommodate their family needs.
“This is evident in the fact that even though nursery staffing costs are increasing by 15%, they are working to keep parental fee increases to just under 10%.
“The funding Government pays to providers has never been about paying for meals, snacks or consumables, it is to provide early education and care. In the current economic climate, taking away the flexibility for providers around charges could seriously threaten sustainability. This may lead to nurseries offering fewer funded places and further nursery closures.
“Childcare places have historically been underfunded with the gap widening year on year. From April, the operating costs for the average nursery will go up by around £47,000 once statutory minimum wages and changes to National Insurance Contributions are implemented. NIC changes have not been factored into the latest funding rates, further widening the underfunding gap.
“At the same time, unfair business rates add £26,500 a year to the running costs of the average private nursery. This is why 92% of providers say that funding does not cover their costs for three and four-year-old places.
“From September onwards parents of nine-month old babies will be able to increase their funded hours. Costs to providers will go up on things like baby food, nappies and staffing as ratios for younger children are higher. As a result of these changes, 80% of the hours in an average nursery will be Government funded.
“In our recent survey, 85% of nurseries said they were supporting children with SEND that were not properly funded in line with their identified needs. This means parents and providers have to pick up these costs.
“Given that these changes could have a significant impact on nurseries’ ability to deliver funded hours, the Government should have consulted with parents and providers on the possible impacts of these changes. The word voluntary was taken out in 2024 to provide greater clarity and is now being reintroduced, adding insult to injury for providers who are struggling with sustainability.”
See the updated ‘Statutory guidance for local authorities on the provision of early education and childcare‘ here
The announcement also included how the £75m additional money to support providers will be distributed.
On the additional £75m for providers, Purnima added:
“Any additional support to the sector in preparation for the final stage of expanded childcare from September is welcome. In order for providers to be able to offer increased funded places and recruit more staff, this funding needs to reach providers swiftly and efficiently.
“Given the relatively small size of the funding pots and the time pressures ahead of September we need to see local authorities avoiding unnecessarily complicated distribution methods.
“When the £100m capital funding pot was announced to support childcare expansion only 5% of it had been distributed in the first nine months. We cannot afford to see the same delays with this important funding pot.”
What will NDNA do to support nurseries:
NDNA will be updating the template letters for nurseries we already have on our website to support you.
These are template letters you can update with your own details and send to parents to explain why you are putting up your fees and why you need to make charges for meals etc. There are also letters you can send to your MPs about the challenges you face.
You can ring our free legal helpline to support you with any new agreements with parents.
NDNA has given comments to the press and media with more than 200 pieces of coverage across the country.
Education Secretary Bridget Phillipson said:
“Giving every child the best start in life is my top priority, and integral to our mission to ensure tens of thousands more children are school ready every year.
“That’s why despite the inherited challenges we face, we are pressing ahead with the investment and leadership needed to support families and make sure that every child, regardless of background, can access the high-quality early education they deserve.
“Today marks an important step towards an early years system that is accessible for parents, sustainable for providers, and better serves children’s development.”
As part of the Government’s Plan for Change, the latest round of NDNA’s Maths Champions programme delivery also launches this month – with up to 800 early years settings to benefit from the training this year.
Purnima said of this programme:
“NDNA’s Maths Champions programme has been shown to boost children’s outcomes when it comes to their early maths and language skills. There is evidence that the impact could be even greater for children from disadvantaged backgrounds.
“We are commencing the next phase of the expanded programme with a further 800 Champions in nurseries, nursery schools and preschools via the Education Endowment Foundation through DfE’s Accelerator fund. This means many thousands of children are benefitting from their setting being part of the programme, especially in Education Investment Areas.
“Programmes like Maths Champions will be a significant tool in achieving the Government’s improved early learning goals target, giving children the best start in life as well as reducing the attainment gap.”
Emily Yeomans, Co-CEO of The Education Endowment Foundation, said:
“Our independent evaluations of the Maths Champions programme have consistently shown its potential in establishing solid foundations in maths for young children. Crucially, this potential is even greater for children from socio-economically disadvantaged backgrounds.
“A strong grounding in early maths is so important for setting up children for later success, acting as a fundamental enabler of later opportunity. So I’m delighted that we’re able to offer hundreds of early years settings access to the programme this year so that many more children can benefit.”
Find out more about Maths Champions here
- Local Authority allocations for the £75 million expansion grant will be confirmed before the end of February. More information on 2025-26 Early Years Entitlement national average funding rates can be found here.
- Updated Early Education and Childcare statutory guidance for local authorities can be found here
- More information on protecting parents from overcharging can be found here.
- England
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