Funded Sessions

Background to the Government Funding for children over 9 months

The Government Promise to Parents: –

• 30 hours of free childcare per week, for children aged 9 months to 4 years
• Eligible working families can apply for 30 hours of childcare to use from the term after the child turns 9 months until they reach school age.
• Funded childcare hours paid to settings only covers core education and care.
• The funded money paid to settings does not cover the cost of meals, consumables, and extra-curricular activities

Parent reality: –

• 30 hours are for 38 weeks a year.
• All year-round settings “stretch the funding over 51 weeks, so the 30 hours equates to 22 hours per week for 51 weeks, or 11 hours per week if only claiming 15 hours
• Due to the chronic underfunding paid to settings for the funding hours, lots of settings have closed as the funding does not cover the actual cost to settings in providing the service.
• Some settings may have to limit the funded hours that they can offer

Nursery reality: –

• The Government promises funded hours to parents and expects us to provide the service at a loss-making price, as the Government does not pay us the amount of money that it actually costs to provide the service.
• As in all businesses, business running cost expenses vary massively from business to business, however all settings (childminder, pack away settings, pre-schools, nurseries all receive the same amount per hour)
• All businesses have to cover the expenses and costs incurred in running the business to remain sustainable and financially viable
• The funded system worked perfectly before, the funded hours massively reduced parents’ monthly bills, and nurseries covered their costs with sustainability/consumables food charges, and nurseries were happy to expand the funded hours for parents.
• We have always had a food charge for funded sessions, as the Government is very clear that the funding does not cover any meals and or snacks.

Maintained nurseries and School based nurseries

• Maintained nurseries do not pay business rates
• Nurseries in Scotland and Wales do not pay business rates,
• Nurseries in England pay massive business rates
• There are no business rates discounts for nurseries like there are with the hospitality sector, film industry etc
• Maintained nurseries have been given additional money to help with the increase in employers National insurance, this is not given to private nurseries
• Maintained nurseries are paid 50% more money than private nurseries for every 3- & 4-year-old children accessing the 15 hours funding. This additional money is not given to private nurseries, this equates to hundreds of thousands of pounds just for 1 maintained nursery

Funding Payments Reality

• The early years funding rates paid to the local authority by the Government is not what nurseries actually receive
• The money paid to the local authority is “top sliced” and a massive amount of money is retained by the local authority for them administer the funded sessions payments
• More money is retained by the local authority for “contingency”
• The Local Authority then determines the early years settings hourly rates.
• There are different hourly rates paid to early years settings for 0-2, 2-3, 3+ year old children

Further Government Guidelines to settings

• The Government are now “forcing” us to offer funded sessions “free to parents” with voluntary parent payments for food and additional services, which are over and above the basic “childcare”.
• Sadly, it is now apparent that we have no choice other than to also offer an opt-out service and offer free funded sessions to parents. Even though the money we receive for every funded hour does not cover the cost of actually providing the service.

Our response to new Government guidelines

• The money paid to settings does not cover the actual cost to the business to provide the funded hours.
• The company income needs to cover all the essential running costs of the business – staff wages, rent, food, gas and electric, business rates, water, insurance, employers’ national insurance, staff pension contribution, equipment, resources, rubbish collection, famly software package, additional extra curriculum classes and mandatory staff training.
• We want to continue to offer all-inclusive childcare and education, so that every child receives the same offer, no matter whether they are attending due to funded hours or private hours
• We don’t want to limit any funded hours
• We want to continue to provide the “funded sessions,” but we have always said that this cannot be to the detriment of the business.
• As business owners we have responsibility to our businesses, that we have to do what is best for the business and not put the business at any risk, and not risk staff jobs, but by being forced to offer a service at a loss-making price by the Government, this is a serious risk to settings financial viability and sustainability.
• We want all children to access the additional curriculum classes that we currently pay for, and we do not want to charge additional money for these sessions or cancel these sessions

All-Inclusive Offer Policy (Food/Consumables)

• At The Day Nursery, we offer an all-inclusive service to ensure all children receive the same high-quality care, education, meals, extra curriculum classes while maintaining compliance with funding regulations
• We have been looking at ways in which the business can continue to offer the funded sessions, but still:
• Continue to provide an excellent service to all children & parents
• Continue to pay the staff well
• Continue to offer the team professional development and training opportunities
• Continue to provide excellent facilities and resources
• No limiting of the funding sessions
• No reduction in the number of children’s places/funding sessions

The only way we can financially continue with our all-inclusive policy is to ask parents to pay a “voluntary” payment to cover the costs to the business.  We want to be open and transparent with all parents in recognising the dire position that the Government is forcing on private nurseries.

Voluntary Charge for Funded hours

• Whilst the Government states it is a “Voluntary Charge” this charge is essential for the business to cover all the business operating and running costs
• We have to provide evidence in our Local Authority audit (sadly we have no control over our own businesses anymore), that we have fully explained the “voluntary charge” and that parents understand that that the “voluntary charge”, is vital for us to charge, to continue to operate the same and offer the same level of service, and that it is an essential charge in order to cover all business running costs.

“Opt out of the voluntary charge” (subject to availability)

• The Government is forcing us to offer the funded sessions with an opt out of paying a voluntary charge
• The voluntary charge is essential to cover the nursery running costs, if parents opt-out of the voluntary charge, this will have limitations to the service settings offer
• Unless we charge sustainability/food charges for the funding hours, we lose money for every hour of funding that we offer.
• The Day Nursery reserves the right to adapt or withdraw the all-inclusive service if a significant number of families opt out, making it financially or operationally unviable.
• By offering a comprehensive all-inclusive service, The Day Nursery ensures that every child receives the highest standard of care in a safe, well-equipped, and nurturing environment Purchasing additional hours is not a requirement to access free opt-out funded hours at The Day Nursery.

We operate on an all-in or all-out basis only.

• We operate on an all-in or all-out basis, no, partial opt-outs are permitted.
• Parents can either:
  • Opt into our all-inclusive offer, where The Day Nursery provides all essential items for an 8 am to 6 pm session.
  • Opt out completely, agreeing to supply everything required for their child, including all meals, in line with our nursery guidelines.

The “voluntary charges” apply to funded sessions ONLY

Privately paid sessions already include the all-inclusive services.

Further demands from the Government to Private Nurseries

As a business that has been trading for over 20 years, we have always taken the decision that we will not be publishing our fees on our website.  However, in yet another demand by the Government we are being forced to display our “voluntary charges” on our website

These are the guidance notes as published by the Government

A1.35 The costs of chargeable extras should be published on provider websites or, where they do not have any website, on local authority Family Information Services. These should be clear, up-to-date and easily accessible to parents, to enable parents to make an informed choice of provider. They should set out, for each setting, the amounts charged for all the chargeable extras listed, as well as the pattern of hours that parents can take the entitlements.

Local authorities may wish to ensure providers follow DfE’s template of how to set out these costs and may exempt childminders and providers caring for 10 or fewer children at any one time.

This should be fully implemented by January 2026 at the latest.

Current Pricing as at 01/01/2026:

The voluntary charges are different according to age of child, due to the fact that the older the child, the lower the hourly rate paid to us by the Local Authority

*Food/Consumable charges are discussed prior to starting and are on an opt in/out basis and   subject to availability, as with all sessions.

Please contact us on 01733 890555 to discuss a place for your child and to book a show around our nursery.

Privately funded spaces are available and we will be happy to discuss these prices with you in person.