Summary: Mrs X complained that the Council failed to properly consider her complaint that she was being charged for a government funded ‘free’ nursery place. We found there was some delay in the investigation. We also found the Council should have sought to obtain a refund of the inappropriate charges that the nursery made to Mrs X.

The complaint

1. Mrs X complains that the Council failed to properly consider her concerns about charges made by her child’s nursery. Mrs X complained that the charges are unreasonable and they go against the Council’s Provider Agreement and the government requirement to provide 30 hours of free childcare.

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What I have investigated

2. Our investigation is focussed on the situation from June 2020 when Mrs X complained. We have not investigated the situation prior to this. The reasons for this are set out in the last section of this statement.

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The Ombudsman’s role and powers

3. We investigate complaints of injustice caused by ‘maladministration’ and ‘service failure’. I have used the word ‘fault’ to refer to these. We cannot question whether a council’s decision is right or wrong simply because the complainant disagrees with it. We must consider whether there was fault in the way the decision was reached. (Local Government Act 1974, section 34(3), as amended)
4. If we are satisfied with a council’s actions or proposed actions, we can complete our investigation and issue a decision statement. (Local Government Act 1974, section 30(1B) and 34H(i), as amended)
5. We cannot investigate late complaints unless we decide there are good reasons. Late complaints are when someone takes more than 12 months to complain to us about something a council has done. (Local Government Act 1974, sections 26B and 34D, as amended)

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How I considered this complaint

6. I spoke to Mrs X and considered the information she provided and the complaint she made. I asked the Council for information, and I considered its response to the complaint.
7. Mr X and the Council had an opportunity to comment on my draft decision. I considered any comments received before making a final decision.

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What I found

The law and statutory guidance

Free Early Education Entitlement (FEEE)

8. The Childcare Act 2006 (as amended) places a duty on councils to secure early years provision free of charge. Regulations set out how councils should discharge their duty. The government has also issued statutory guidance councils must follow and from which they must not depart unless they have good reason.
9. All children who meet the eligibility criteria can take up a free childcare place if their parent wants one. This is known as the Free Early Education Entitlement.
10. The guidance says the free places must be delivered completely free of charge. Councils should ensure that providers do not charge parents “top-up” fees (any difference between a provider’s normal charge to parents and the funding they receive from the local authority to deliver free places).

(Early education and childcare. Statutory guidance for local authorities published by the Department for Education in June 2018, paragraph A1.30)

11. Providers can charge for meals and snacks, and consumables such as nappies or sun cream, as part of a free entitlement place, although these charges must be voluntary. (Early education and childcare. Statutory guidance for local authorities published by the Department for Education in June 2018, paragraph A1.25)
12. Councils should ensure that providers are completely transparent about any additional charges, for example for those parents opting to purchase additional hours or additional services. (Early education and childcare. Statutory guidance for local authorities published by the Department for Education in June 2018, paragraph A1.29)
13. Councils should “Work with providers to ensure their invoices and receipts are clear, transparent and itemised allowing parents to see that they have received their child’s free entitlement completely free of charge and understand fees paid for additional hours or services.” (Early education and childcare. Statutory guidance for local authorities published by the Department for Education in June 2018, paragraph A1.33)
14. Councils must exercise their functions with a view to securing childcare providers’ compliance with these requirements. (Childcare Act 2006, s9(2))
15. Kent County Council requires providers to sign an agreement which details the conditions under which funding for FEEE places will be provided. The agreement document sets out the conditions in paragraphs 10-14 above. The agreement also states that where it is reasonably practicable, free care should be provided in continuous blocks, avoiding artificial breaks throughout the day, for example over the lunch period. Where this is not reasonably practicable, providers must ensure that any fees to cover care over these periods are fair, transparent and clearly communicated to parents.
16. Councils may require the repayment of some or all of the funding they give to providers if they do not adhere to the specified conditions (Childcare Act 2006, s9(3))

Contracting Out Council Functions

17. The Council contracts a company to manage early education childcare providers on its behalf. I have referred to them as Company A in this statement. When councils engage in contracts with third parties to carry out functions for them, the Ombudsman is clear that councils retain responsibility for the actions taken on their behalf.

What Happened

18. In June 2020 Mrs X complained to the Council about the charges being made for her son’s nursery place. Her son attended the nursery utilising the Free Early Education Entitlement. At the time of the complaint Mrs X had used the nursery for two years already. She appeared to have paid some additional fees during that time.
19. Mrs X’s son attended the nursery from Tuesday to Friday for a total of 28 hours per week.
20. At the time Mrs X contacted the Council, the nursery had recently changed hands. In correspondence with Mrs X, the nursery provider told Mrs X she could either pay for a morning (5 hrs), an afternoon (5 hrs), a school day (6.5hrs) or whole day of care (10 hrs). They stated additional charges per day were £7 on food, £8 on extracurricular classes, and £9 per day to allow additional staff-pupil ratios that allow feedback and photographs via an online provider.
21. Mrs X questioned the fees with the nursery. She noted that the nursery charged a daily fee for activities, but they did not do activities on all days. So, some parents would be paying for activities they were not receiving. She noted parents already provided their own food and snacks, nappies etc so it was inappropriate to charge for this. She noted that the other costs seemed to be caused by the nursery decision to have higher staffing ratios. Mrs X felt the nursery was effectively charging a top up for a free place, which went against the FEEE regulations.
22. Mrs X complained to the Council because the new owner increased her fees significantly. She questioned the nursery’s practices and asked the Council to explain what charges the nursery could make within the rules.
23. The Council explained the nursery could charge for additional time or activities and they could charge for consumables (nappies, sun cream etc). However, they could not charge a top-up fee for the placement (the difference between government funding and what they may charge for a place privately).
24. On 21 July Company A spoke to the provider and requested details of their charging structure and fees.
25. On 12 August the Council concluded there was evidence that Mrs X was being charged fees for services she was not receiving. She was being charged a top-up payment which was not permitted. Company A told the provider they were in breach of their Provider Agreement with the Council.
26. During August Company A worked with the provider to agree a new set of policies and fees that were compliant. The provider sent the Council several versions of a new fee policy which were reviewed.
27. Mrs X told the Council in late August that the provider had amended their fee structure and told parents there was a fee of £18.40 for optional lunchtime care. The nursery provider confirmed this was optional, and children could go home over lunch and return later. However, the provider stated if the £18.40 for the lunchtime cover was not paid for a child, they would be excluded from activities for that day. Mrs X complained this was unfair.
28. Company A discussed the issue of lunchtime charging with the provider and in early September Company A set out the non-compliance issues to them. Company A suggested options to bring practices in line. The provider raised questions and further discussion took place between the provider and Company A.
29. On 25 September the Council told Mrs X the nursery provider had resolved the problems in her case by offering her a totally free nursery place for her son. It stated it was continuing to work with the provider to ensure they met all the requirements in the provider agreement.
30. Mrs X complained that the matter was not resolved. She stated she raised her complaint not just for herself but to ensure the provider was properly complying for all parents. On 2 October, the Council responded to Mrs X further. It stated it took compliance seriously and audited providers every three years. The Council stated the original queries Mrs X raised had been resolved because she had been offered a free place. It stated there were elements within their investigation that had to remain confidential, for example, financial information about the provider. So, the Council was unable to share more information. The Council re-iterated that it was continuing to work with the provider to ensure they were compliant.
31. In October the provider challenged the Council for singling out his company. The Council held a virtual meeting with the provider discussing the continuing issues. The provider confirmed to the Council that parents could opt out of charges, but its response still did not contain enough detail. As a result, discussions with the provider about the fee structure continued.
32. In February 2021 the Council discussed several new versions of the provider’s fees and admissions policy. Another revised version was reviewed by the Council in March. There remained various issues that were incompatible with the Council’s provider agreement.
33. The Council took legal advice several times during April. It also met with another local authority who also found the provider was not complying with the statutory guidance. The Council sought clarification from the nursery provider that children would not be excluded if they opted out of paying additional fees. This was confirmed in May 2021.
34. The Council declined to sign off the provider’s new fees and admission policy until it was published by the provider. It also took further legal advice in May 2021. Following delay in publishing the new fees and admissions policy the Council told the provider they may be suspended from the provider list of they did not comply.
35. The provider did then publish the new fees and admission policy. As the Council found this was compatible with the provider agreement, the Council agreed the compliance investigation was completed.

Was there fault by the Council

36. The Council acknowledged that it took longer than it should have to progress its investigation into Mrs X’s nursery place provider. It told us this was in part because they were unable to visit the provider, and partly because staff were presented with unexpected additional work due to the COVID-19 pandemic.
37. I acknowledge that the pandemic stretched staffing and resulted in new issues to be resolved by the Council. This could have impacted on timescales. However, in lieu of a visit, it should have been possible for Council to give the provide a clear list of the information it needed, in order to check compliance. Overall, I found there were periods of avoidable delay.
38. Although it took longer than it should have to complete the investigation and achieve compliance, there was not a failure to act on the complaint. The Council sought information and pressed the provider to make changes to its practices. It also took legal advice and advice from the Department for Education (DfE) about aspects of the case.
39. The Council was able to limit the impact on Mrs X. This was because the provider agreed to provide her place from September 2020 with no additional charges. Although this is positive, councils have a duty to secure free places for parents. So, we would expect a council to use the means at its disposal to obtain a refund of the inappropriate charges made to parents. In this case, the Council found that Mrs X was being charged a top-up for her place and she had been charged inappropriately between June and September 2020. We found the Council should have required the reimbursement of the inappropriate charges.

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Agreed action

40. Within six weeks of my final decision the Council should:
41. Send a written apology to Mrs X for the delays in its compliance investigation.
42. Take whatever action is necessary to ensure Mrs X receives a refund of the “top‑up” and any other additional fees that Mrs X was inappropriately charged by the nursery her son attended between June 2020 and September 2020.

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Final decision

43. There was fault by the Council.

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Parts of the complaint I did not investigate

44. We have only investigated the complaint from the point Mrs X complained to the Council. This was when the nursery came under new ownership. This is because we generally expect complaints to be brought to us within a year of someone knowing of the issues they are raising. We have considered the period before the ownership changed as a late complaint.

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Investigator's decision on behalf of the Ombudsman