The Ombudsman's final decision:
Summary: a nursery’s charge of £1 per hour for “consumables” is not a top-up fee, but the charges are not clear. The Council has agreed to work with the nursery to ensure its charges are clear, transparent and itemised, and parents understand how they can access free childcare without paying the charge when the nursery is delivering the Free Early Education Entitlement.
- Mr F complains about charges made by the nursery where his children access the Government’s Free Early Education Entitlement. The nursery charges £1 per hour for “consumables”. He complained to the Council and is unhappy with the Council’s response.
The Ombudsman’s role and powers
- We investigate complaints about ‘maladministration’ and ‘service failure’. In this statement, I have used the word fault to refer to these. We must also consider whether any fault has had an adverse impact on the person making the complaint. I refer to this as ‘injustice’. If there has been fault which has caused an injustice, we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
- 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)
How I considered this complaint
- I have considered:
- information provided by Mr F, including invoices and letters from the nursery;
- information provided by the Council, including its response to Mr F’s complaint.
What I found
- Mr F’s children attend(ed) a nursery in Lincolnshire.
- In 2019, the nursery wrote to parents to explain changes to its charges. It said Government funding only covered part of its costs, and this affected the nursery’s sustainability and ability to deliver quality care. The nursery explained there had been little increase in Government funding in the last three years, and the funding was now £1.70 per hour less than the nursery’s fees. To address the problem, the nursery said it was introducing a fee of £1 per funded hour from April 2019. The nursery referred to Government guidance which says the Government only pays for childcare; parents can expect to pay for consumables or additional activities.
- Mr F queried the charge with the nursery and the Council at the time. The Council explained the nursery was entitled to charge for consumables.
- The Council says the nursery will provide completely free childcare between 8am and 12am, and 1pm and 6pm. It says parents can opt out of the “consumables” charge if they collect their children from the nursery at lunchtime or pay £15 for their children to remain at the nursery over lunch. The Council says this was explained to parents at a meeting. It is not explained in the letter from the nursery. It is not explained in the nursery’s pricing schedule.
- Mr F complained again following publicity of our report about nursery fees in Leicestershire in January 2021. Again, the Council explained the nursery was entitled to charge for consumables. Mr F does not agree with the charge. He considers the charge a ‘top-up fee’. He now complains to the Ombudsman.
- Children in England aged 2, 3 and 4 may be eligible for free childcare. This is known as the Free Early Education Entitlement. The eligibility criteria are set by the Government. To qualify, the child, its parents and the childcare provider must meet the eligibility criteria.
- The free childcare is funded by the Government, administered by the Council and (usually) delivered by private nurseries or childminders.
- Nurseries and childminders can choose whether to offer the free childcare. Parents can choose any nursery participating in the scheme. The Council pays the nursery directly for the free childcare.
- Regulations set out how councils should discharge their duties. The government has also issued statutory guidance councils must follow and from which they must not depart unless they have good reason.
- 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)
- 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. Where parents are unable or unwilling to pay for meals and consumables, the provider is responsible for setting its own policy on how to respond. (Early education and childcare. Statutory guidance for local authorities published by the Department for Education in June 2018, paragraph A1.25)
- 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)
- 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)
- If the provider is unable to offer fully flexible places, councils should ensure providers make sure parents understand which hours or sessions can be taken as free provision. (Early education and childcare. Statutory guidance for local authorities published by the Department for Education in June 2018, paragraph A1.32)
- Councils must exercise their functions with a view to securing childcare providers’ compliance with these requirements. (Childcare Act 2006, s9(2))
- We are only concerned with the provision of the Free Early Education Entitlement, and the Council’s response when Mr F queried the nursery’s charges.
- The Council says Mr F has chosen to pay the £1 per hour charge for consumables to access the nursery at the times he chooses rather than take his children out of the nursery at lunchtime or pay the £15 lunch fee. The Council says Mr F could access completely free nursery care for a limited number of hours per day.
- This may be the case, but it is not explained clearly and transparently in any of the correspondence I have seen. The Council says it was explained at a meeting. However, the only written record is the nursery’s letter which says there is a charge of £1 per hour for every funded hour. The letter does not say the charge is voluntary. It does not say the charge is for “consumables” or explain which “consumables” are included. The letter does not explain how parents can access free childcare without paying the charge.
- In response to Mr F’s complaint and to my enquiries, the Council offered to contact the nursery for a more detailed explanation of the fees.
- The fact the invoices and charges require further explanation suggests they are not clear or transparent, and it is not possible for a parent to understand the charges for additional services. I find the Council is at fault for failing to recognise the problem with the nursery’s charges when Mr F complained. Consequently, the Council has failed to work with the nursery to ensure that its charges are clear, transparent and itemised as it is required to do.
- Mr F believes the charge is a “top-up fee” and, like the parents in Leicestershire, he should receive a refund.
- I note that the charge of £1 per hour is equivalent to an annual charge of £570 for children entitled to the universal entitlement, or £1,140 for those entitled to the extended entitlement.
- Although the nursery justified the introduction of the charge with reference to the difference between the “funding” it received for the Free Early Education Entitlement and its usual charges, I do not consider the charge is a top-up fee. Parents get something in exchange for the charge: “consumables”.
- The problem is not the charge itself, it is the fact the nursery’s charges are not clear, transparent and itemised, and parents are not clearly told how they can access free childcare without paying the charge. This is where the Council should have taken action. Government guidance says the Council should work with providers to ensure their charges are clear and transparent. Its failure to do so is fault.
- We have published guidance to explain how we recommend remedies for people who have suffered injustice as a result of fault by a council. Our primary aim is to put people back in the position they would have been in if the fault by the Council had not occurred.
- If the Council had recognised the problems with the nursery’s charges when Mr F complained in 2019 and fulfilled its duty to work with the nursery to ensure the charges were clear and transparent, Mr F would have been able to make an informed choice about the “consumables” charge.
- I note there are other nurseries close by which make no charge for consumables and explain how parents can access completely free nursery care. One nursery offers meals, for which there is a charge, but invites parents to send a packed lunch if they prefer not to pay.
- Mr F has paid for “consumables”. I understand the charge included meals. He has, therefore, had something in exchange for the money he paid. This contrasts with our Leicestershire investigation, where parents did not. For this reason, I do not consider Mr F should receive a refund.
- I recommended the Council:
- apologises to Mr F for failing to recognise the problem with the nursery’s charges when he complained; and
- takes action to ensure the nursery’s charges are clear, transparent and itemised, and that it is clear to parents how they can access free nursery care without paying charges at the nursery.
- I have completed my investigation as the Council accepted my recommendations.
Investigator's decision on behalf of the Ombudsman