London Borough of Bexley (18 007 360)

Category : Education > Other

Decision : Not upheld

Decision date : 04 Dec 2018

The Ombudsman's final decision:

Summary: Mrs X complained the Council wrongly told her childcare provider her son was eligible for free two-year-old childcare funding. She states this has caused financial loss. The Council is not at fault.

The complaint

  1. Mrs X complained the Council wrongly told her childcare provider (the Provider) that her son, R, was eligible for free two-year-old childcare. She says the Council later recognised its error and reclaimed the money off the Provider. Mrs X says this had caused her financial loss after she paid the Provider £773 for childcare she believed was free.

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The Ombudsman’s role and powers

  1. 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)
  2. 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)

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How I considered this complaint

  1. I read Mrs X’s complaint and discussed it with her.
  2. I made enquires of the Council and referred to its ‘Portal Guide for Providers’ and policy on ‘Funding Terms and Conditions for 2,3 and 4-year olds’.
  3. I referred to the Department for Education’s statutory guidance ‘Early education and childcare 2018’ and ‘Early years entitlements: operational guidance’.
  4. I made enquires of the Provider.
  5. Mrs X and the Council had the opportunity to comment on my draft decision.

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What I found

  1. Under the Childcare Act 2006 and 2016, parents of children aged between two and four can receive up to 30 hours of free childcare a week. This must be with an approved childcare provider and stops when the child is in reception class.
  2. The number of hours a child receives is dependent on eligibility criteria:
  • Parents of two-year-olds can receive fifteen hours a week if they receive specific benefits, such as income support, or, if the child meets certain criteria, such as receiving disability living allowance. This childcare is designed to support the most disadvantaged two-year-olds.
  • All three- and four-year-olds are entitled to fifteen hours free childcare. This is called the universal offer.
  • Working parents of three- and four-year-olds are eligible for thirty hours free childcare. This is called the extended offer.
  1. Parents applying for the extended offer must do so either online or by telephone through HM Revenue and Customs (HMRC) childcare service. HMRC checks if the parents meet the economic criteria for the offer and gives an eligibility code which parents must give to their childcare provider to validate.
  2. Parents must apply for the code the term before they want their child to take up a place. So, if a child is eligible to start extended childcare in September, the parent must apply to the HRMC childcare service before 31 August. The HRMC code is valid for three months. Therefore, parents must reconfirm eligibility for extended childcare through the HRMC childcare service.
  3. Councils are responsible for having a service which childcare providers can access to check the codes parents give to them. The Council’s system ‘talks’ to HRMC system to confirm whether the code is valid.
  4. Bexley Council uses an online portal. Childcare providers enter the parents’ code into the portal to validate it. The portal does not check whether the child is the correct age to start accessing the extended offer.
  5. Parents apply for free two-year-old childcare directly through their local council. In Bexley, parents must apply either through the Council’s portal or the childcare provider can complete an assisted application to give to the Council. The Council gives parents a unique reference number to give to their provider.
  6. The provider must then complete a ‘placement notification form’ before applying to the Council for funding for eligible two-year-old children.
  7. The Government splits two-, three- and four-year-old childcare funding and provision into three terms.
    • Autumn term runs from 1 September to 31 December. Children born between these dates are eligible for childcare on or following the 1 January after their second or third birthday.
    • Spring term runs from 1 January to 31 March. Children born between these dates are eligible for childcare on or following the 1 April after their second or third birthday.
    • Summer term runs from 1 April to 31 August. Children born between these dates are eligible for childcare on or following the 1 September after their second or third birthday.
  8. The Council’s guidance for childcare providers states “for the child to be able to access their 30 hour place this term the code must have an eligibility start date within the previous term”. This means, for a child starting thirty hours of free education in September, they must have an eligible start date from the summer term (between 1 April and 31 August).
  9. After Providers have completed the placement notification form (for two-year-old funding) or validated the eligibility code for the extended offer, they complete a forecast headcount. This forecast headcount includes the names of the children they expect to have with them the following term. The Council uses this information to release funding to childcare providers.
  10. Childcare providers supply an actual headcount to the Council once the term starts. If the Council has paid funding for children based on the forecast headcount, and they do not start, the Council invoices the childcare provider for this money.
  11. The Council’s policy on ‘Funding Terms and Conditions’ states the childcare provider is responsible for:
    • confirming whether a child is within the eligible age range on initial registration for all free entitlements; and
    • ensuring the information entered into the Council’s portal is accurate.
  12. It states providers must repay on demand any funding paid by the Council “which the Provider was not entitled to receive for any reason”.
  13. The Council complete audits throughout the year. The audits highlight any differences between the forecast headcount and actual headcount.

What happened

  1. R was born April 2015. This means R could access two-year-old free childcare funding from 1 September 2017 if he or his parents met the specific eligibility criteria. He would be eligible for the universal offer or extended offer of three-year-old funding from 1 September 2018.
  2. In April 2018, Mrs X applied to HMRC and received an eligibility code for the extended offer for R.
  3. Mrs X gave this eligibility code to the Provider. On 3 April 2018, the Provider entered the code into the Council’s portal for checking 30 hour codes. The portal validated the code and stated R was eligible from 1 April 2018.
  4. On 4 April 2018, the Provider says they telephoned the Council. They were unclear why the portal stated R was eligible from 1 April 2018 if he could not access the extended offer of 30 hours childcare until 1 September 2018. The Provider states the Council told them R was eligible for 15 hours of funding and the extended 30 hours would start in September. The Council does not have a record of this conversation.
  5. Following this conversation, the Provider put in its forecast headcount and included R. R’s funding age appeared as two-years-old and the Provider applied for fifteen universal hours funding.
  6. On 12 April 2018, the Council issued the Provider with the funding statement for the summer term. This included two-year-old funding for R based on the forecast headcount.
  7. On 17 April 2018, the Provider emailed the Council’s school finance team stating the funding statement showed R being eligible for two-year funding. The Provider asked if this was a mistake as they put R through for three-year-old funding.
  8. On 18 April, the Council responded stating R was in the age bracket for two-year-old funding. The Council did not confirm that R met the eligibility criteria for two-year-old funding.
  9. In May 2018, the Provider put in their actual headcount to the Council.
  10. The Council runs an audit after childcare providers have put in their actual headcount. This shows children entered on to the actual headcount that are not eligible for the two-year-old offer or the extended offer. This identified R was not eligible for the two-year-old funding.
  11. On 14 June 2018, the Council invoiced the Provider for the two-year-old funding.
  12. Mrs X complained to the Council saying it had wrongly told the Provider, R was eligible for free two-year-old childcare provision. Mrs X stated she had to pay the Provider for the childcare R had received.
  13. On 20 July, the Council wrote to Mrs X with the outcome of its investigation. It stated the Provider had failed to follow the correct procedure and claimed funding for R wrongly. It stated the Provider:
    • had not got a signed declaration from Mrs X to give permission for funding to be drawn;
    • had not completed the ‘placement notification form’, which must be completed before the Provider can claim two-year-old funding.
  14. The Council stated if the Provider had followed the correct process, it would have been clear R was not eligible for funding.
  15. The Council stated it had no record of the telephone conversation the Provider said they had with the Council, therefore it could not uphold this part of the complaint.
  16. Following the stage one response, the Provider found the email received from the Council saying R was in the two-year-old funding bracket. Mrs X asked for a stage two complaint review and the new evidence to be considered.
  17. On 2 August 2018, the Council completed its stage two response. This response did not comment on the email provided by the childcare provider. In response to my enquiries the Council said the email was not sent to the investigating team.
  18. The second stage response did not uphold Mrs X’s complaint. Mrs X remained unhappy and complained to the Ombudsman.

My findings

  1. For a child to be eligible for the extended offer of thirty hours free childcare, they must have an eligibility date from the term before they are due to start. The eligibility date confirms the child meets the economic criteria to access the extended offer, it does not check the child’s age.
  2. In April 2018, Mrs X applied through HRMC childcare service. She received an eligibility code for the extended offer which she gave to the Provider.
  3. On 3 April 2018, the Provider validated R’s code through the Council’s portal. This stated R was eligible from 1 April 2018 meaning R’s parents met the economic criteria for extended childcare funding from this date. R’s eligibility date of 1 April 2018 meant his thirty hours of free childcare could not start until September 2018. It did not mean he could receive free childcare from the 1 April 2018.
  4. The Provider says they spoke to the Council to query R’s eligibility date. The Provider states the Council advised R was eligible for fifteen-hours of funding until September, when he would become eligible for thirty-hours of funding. As there is no record of this conversation I cannot confirm what information the Council gave the Provider. However, there appears to be a misunderstanding. It is not clear why the Council would advise R met the eligibility criteria for two-year-old funding without him having a unique reference number. It is most likely the Council advised he was in the two-year-old funding bracket.
  5. On 17 April 2018, the Provider emailed the Council saying the funding statement showed R receiving two-year-old funding, but that he was put through for three-year-old funding. The Provider believed there may be an error in the funding statement.
  6. The funding statement is based on information entered by the Provider in the forecast headcount. The Provider had entered R’s start date as 1 April 2018; therefore, the Provider had applied to the Council for two-year-old funding for R.
  7. In response to the Provider’s email, the Council correctly advised R was within the two-year-old funding for the summer term. The Council did not advise the Provider that R or his parents met the specific eligibility criteria for the funding. The Council expects the Provider to confirm eligibility before putting in the forecast headcount. The Council only confirmed information given to them by the Provider. Therefore, the Council did not wrongly advise the Provider that R was eligible for free two-year-old childcare. The Council is not at fault.
  8. Mrs X complained the Council caused her financial hardship as she had to pay the Provider for childcare she believed was free. The Council’s guidance states Providers must repay money which they are not entitled to receive. In this case, the Provider was not entitled to receive two-year-old funding for R. Therefore, it repaid the money it owed the Council and Mrs X chose to pay the Provider. There was no fault in the Council’s actions.
  9. The Council failed to consider the email sent in by the Provider as part of its stage two investigation. However, this fault is not so significant that we would want to identify it as maladministration. And, even if this email had been considered it would not have brought about a different stage two response. Therefore, this has not caused an injustice.

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Final decision

The Council is not at fault for providing incorrect childcare advice. Therefore, I have completed my investigation.

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Investigator's decision on behalf of the Ombudsman

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