Summary: Mrs X complained about how the Council dealt with its investigation into her concerns that her child’s nursery had been wrongfully charging her compulsory top-up fees which was not allowed by law. Mrs X also complained about the Council’s poor communication with her. There were some faults by the Council which caused injustice to Mrs X. The Council will take action to remedy the injustice caused.

The complaint

1. Mrs X complained about how the Council dealt with its investigation into her concerns that her child’s (Y) nursery had been wrongfully charging her compulsory top-up fees which was not allowed by law. Mrs X’s specific concern was related to non-specified “enhancement” fees.
2. In particular, Mrs X complained about the Council’s delays and failure to properly investigate her concerns. She also complained about the Council’s poor communication with her.
3. Mrs X said the matter caused her financial loss/strain, distress and the time and trouble chasing the Council for updates and resolution about the matter.

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The Ombudsman’s role and powers

4. 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 significant injustice, or that could cause injustice to others in future we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
5. We consider whether there was fault in the way an organisation made its decision. If there was no fault in how the organisation made its decision, we cannot question the outcome. (Local Government Act 1974, section 34(3), as amended)
6. We cannot investigate most complaints about what happens in schools. (Local Government Act 1974, Schedule 5, paragraph 5(2), as amended)
7. We investigate complaints about councils and certain other bodies. We cannot investigate the actions of bodies such as nurseries, schools. (Local Government Act 1974, sections 25 and 34(1), as amended)
8. If we are satisfied with an organisation’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)
9. Under our information sharing agreement, we will share this decision with the Office for Standards in Education, Children’s Services and Skills (Ofsted).

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What I have and have not investigated

10. The Ombudsman does not investigate the actions of childcare providers as they are not a body within our jurisdiction in the same way councils are. However, councils are subject to some legal duties in relation to local childcare providers and the Ombudsman can investigate whether councils have had regard to these duties.
11. In this case I have not investigated the childcare provider itself. I have investigated the steps the Council took to investigate and respond to Mrs X’s concerns and its actions to ensure compliance with relevant law and guidance by the childcare provider.
12. I have therefore investigated matters from January 2024 to January 2025. This covers the period from when Mrs X approached the Council to when the Council issued its final response to her complaint.

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How I considered this complaint

13. I considered evidence provided by Mrs X and the Council as well as relevant law, policy and guidance.
14. Mrs X and the Council had an opportunity to comment on my draft decision. I considered any comments before making a final decision.

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What I found

Law and guidance

15. All children who meet certain eligibility criteria may take up a free childcare place. This is known as the Free Early Education Entitlement.
16. All 3 to 4-year-olds in England can receive free childcare. From 01 April 2024, working parents of children aged 3 to 4 can receive 30 hours of free childcare per week.
17. The Early Education and Childcare Statutory Guidance says 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 councils to deliver free places)
• ensure that providers are aware that they can charge for meals and snacks, consumables, such as nappies or sun cream, and for services such as trips and specialist tuition
• ensure that providers are completely transparent about any additional charges, for example, for those parents opting to purchase additional hours or services; and
• work with providers to ensure their invoices 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.

18. The Guidance also says:

• providers can charge for meals and snacks as part of a free entitlement place, and they can also charge for consumables such as nappies or sun cream and for services such as trips and specialist tuition; and
• parents can be expected to pay for these, although these charges must be voluntary for the parent. Where parents are unable or unwilling to pay for meals and consumables, providers who choose to offer the free entitlements are responsible for setting their own policy on how to respond, with options including allowing parents to supply their own meals or nappies or waiving or reducing the cost of meals and snacks.

19. The statutory guidance must be followed by councils unless there is a good reason to depart from it. Where councils depart from statutory guidance, we expect reasons for this to be recorded at the time of the decision.
20. Councils are not responsible for providers’ individual charging arrangements or charging policies and are not required to proactively audit each provider.
21. The statutory guidance was updated in February 2025. This falls outside the scope of my investigation, therefore I have relied on the guidance in place at the time of the events complained of.

The Council’s complaints procedure

22. The Council has a two-stage complaints procedure:
23. Stage 1 – the Council acknowledges receipt of the complaint within 3 working days, and it aims to issue its response within 10 working days from the date on the acknowledgement letter.
24. Stage 2 – it aims to issue a final response within 20 working days of the complaint being acknowledged.

Background

25. Mrs X’s child, Y, attended a nursery. The Council has an agreement with Y’s nursery to deliver Free Early Education Entitlement (FEEE).
26. In April 2023, Y became entitled to 30 hours of free childcare per week. Y’s funded hours were used over three days a week (Monday – Wednesday; 8am to 6pm) while Mrs X paid for the remaining two days of the week.
27. In August, Y’s nursery wrote to all parents, this included Mrs X. The nursery’s letter stated there would be an increase in the ‘additional service charge’ and that there would also be a change to its invoicing to improve visibility and transparency. The breakdown of the ‘additional service charge’ was:

• Breakfast and AM snacks = £2.95
• Lunch = £3.85
• Tea and afternoon snacks = £3.75
• Enhancements – Full Day = £20.00

28. Mrs X said the letter did not mention the ‘additional service charge’ was voluntary. Mrs X also said no extra-curricular activities took place on Y’s funded days.
29. Mrs X said she felt the £20 enhancement charge per day was unreasonable. She immediately raised her concerns with Y’s nursery and asked it to provide her with additional information about what ‘enhancements’ Y was receiving.
30. Mrs X said the nursery’s response did not appropriately address her concerns.

Key events

31. In early January 2024, Mrs X approached the Council and informed it about her concerns that Y’s nursery had been wrongfully charging her compulsory top-up fees which was not allowed by law. Mrs X said:

• the nursery did not state the top-up fees were voluntary, it added the top-up fees to her bill and applied it to each of Y’s funded session
• she was happy to pay a charge that covered the cost of meals, consumables, trips and outside providers, but she did not agree with a compulsory charge for ‘enhancements’
• the nursery’s policies and written communication with parents around funded places and additional costs were unclear
• the email she received from Y’s nursery about her concerns on the matter was also unclear and misleading. Mrs X said her understanding was that she had only two options available to her if she wanted to continue using Y’s Free Early Education Entitlement (FEEE) with his nursery. These options were:
1. a non-negotiable booking pattern of Monday to Friday (9am – 3pm), over 38 weeks, with no compulsory charges; or
2. a flexible booking pattern with a voluntary charge for meals and consumable and a compulsory charge for enhancements which meant the enhancements charge had to be paid if she wished to continue with her established booking pattern at the nursery.

32. The Council informed Mrs X it would investigate her concerns, contact Y’s nursery and provide her with an update on 31 January.
33. In mid-February, Mrs X chased the Council for updates about its investigation.
34. In March, the Council sought advice from its legal department on how to deal with Mrs X’s case. The Council said this was due to the complexity of the charging issues Mrs X raised, the potential breach of FEEE by other nurseries in its borough and the likelihood of other families being affected.
35. Mrs X chased the Council for updates again in March and April. The Council apologised to Mrs X and said it was still investigating her concerns.
36. In April, the Council wrote to Y’s nursery about Mrs X’s concerns regarding its alleged top-up fees and its unclear policies and communication about its charges. The Council said it also sought external advice about Mrs X’s case.
37. Further correspondence were exchanged between the Council and the nursery between April and May.
38. In its response, Y’s nursery said:

• it provided all parents with its fee sheet and childcare funded guide with details of how it delivered its funding model.
• its funded additional service charges included meals which were voluntary on funded hours only and it said Mrs X raised no concerns about the meal costs.
• it offered various sessions including 9am - 3pm to assist with reducing the additional service charges, it said it also provided copies of its enhancement programs, but that Mrs X declined a change in booking pattern due to requiring childcare on a full-time basis.
• it attached a copy of the invoice it issued to Mrs X with breakdown of all the costs and showed the funding at a nil cost and hours provided free.
• the additional service charge was not a top up charge to make up the difference to a private fee. The nursery said it determined the price of meals and additional service charges based on its costs and overheads.
• it listed the additional weekly activities the nursery’s additional service charges covered.
• various options were offered including reduced days that had reduced enhancement costs. The nursery said it would agree to reduce the enhancement costs by 20% to alleviate the financial burden on Mrs X and it was happy to meet with her to discuss the matter further.

39. The Council informed Mrs X about the nursery’s response, discount offer and advised her to contact the nursery for further discussion. Mrs X disputed the additional weekly activities the nursery said Y received and she declined the nursery’s discount offer. Mrs X said any discount at the time was minimal and did not address her concerns and therefore she would await the outcome of the Council’s investigation.
40. In early June, the Council held an internal meeting with its legal department, but no further clarification was achieved on Mrs X’s case.
41. On 24 June, the Council informed Mrs X and Y’s nursery it had completed its investigation. The Council apologised to Mrs X for its delays and said it found some elements of the nursery's provisions did not fully meet the terms and conditions of the FEEE agreement between it and Y’s nursery. The Council asked Y’s nursery to provide parents with improved communication on how to access totally free placements and with clear and detailed charging information including additional service charges. The Council said it was unable to take a firm view on whether the £20 per day enhancement fee was within the DfE guidelines. The Council said it was in the process of seeking additional guidance on whether it was acceptable to require parents to take up fee paid extras as part of accessing their free entitlement during some sessions.
42. In July, Y stopped attending the nursery and Mrs X said that was when she paid for Y’s last funded session with an enhancement charge.
43. Mrs X remained dissatisfied with the Council’s response, its delays and how it failed to properly deal with her concerns. Mrs X made a complaint to the Ombudsman.
44. The Ombudsman contacted the Council and asked it to deal with the issues Mrs X raised under its complaints procedure. This was because the Council confirmed it had treated Mrs X’s concerns as an enquiry and not a formal complaint.
45. In November, the Council chased Y’s nursery for updates on the recommendations it made to it on 24 June. Y’s nursery confirmed it had made the recommended changes to align with the terms and conditions of the Council’s FEEE agreement.
46. On 18 November, the Council requested an urgent meeting with the external organisation (Organisation 1) it had previously sought advice from on whether the enhancement fees charged by Y’s nursery were top-up fees and in breach of the funding agreement.
47. In late November, Organisation 1 and the Council held a meeting. Organisation 1 then provided the Council with extracts from the statutory guidance relating to top-up fees and it asked the Council to seek its own legal advice on the matter. The Council said the information it received from Organisation 1 was not helpful and provided no clarification into Mrs X’s case.
48. The Council issued its stage 1 and stage 2 responses to Mrs X’s complaint in December 2024 and January 2025 respectively. The Council:

• apologised to Mrs X for its poor communication with her. The Council said the reason for its delays with investigating Mrs X’s complaint was because it had to involve its legal department, Y’s nursery and Organisation 1
• confirmed Y’s nursery had completed the actions the Council recommended to it in June because of its investigation into Mrs X’s case
• said it was still unable to get clarification from Organisation 1 on Mrs X’s case as regards the compulsory enhancement fees. The Council said it would continue to seek guidance on statutory requirements for the additional service charges imposed by nurseries.

49. In response to our enquiries, the Council said:
1. it did not contact Y’s nursery about Mrs X’s concerns until April 2024 due to increased workload and staff shortage. The Council said it recruited additional staff to further review its complaints process to prevent recurrence of delays and communication issues with its service users.
2. it would increase the number of audits it conducts on nurseries annually and address customer queries and concerns about childcare entitlements.
3. it would remain in contact with Y’s nursery to ensure that its funded offer continues to comply with the updated terms and conditions of the Council’s funding agreement.
4. it concluded that the enhancement charges did not qualify as a top-up fee; but that imposing additional charges for services beyond the funded entitlement during certain sessions, when an alternative arrangement without extra payment was offered, remained unclear.
5. it updated its funding terms and conditions following the new 2025 statutory guidance which provided significant clarification and now resolved the issue by expressly prohibiting hybrid models (such as the model adopted by Y’s nursery). The updated guidance also sets out how nurseries should present their fee structures to ensure greater transparency.
6. Mrs X would therefore receive reimbursement for the enhancement fees (this excludes the food and snacks) imposed on Y’s funded sessions from January 2024 until he stopped attending the nursery.

Analysis

50. The Ombudsman’s role is to investigate the administrative actions of councils. So, I have considered the way the Council investigated and responded to Mrs X’s concerns about the charge and whether the Council has sufficient oversight of the way the provider charges parents.
51. I find the following faults by the Council in this case.
1. It took the Council approximately three months (January to April 2024) to make its first contact with Y’s nursery about the charging issues alleged against it by Mrs X. The Council’s delay and its failure to promptly liaise with the nursery about Mrs X’s concerns were faults.
2. Although the Council said it first raised Mrs X’s concerns with Organisation 1 in April, I find the Council was at fault for not chasing Organisation 1 on the matter until November 2024 when it requested an urgent meeting and sought advice on Mrs X’s concerns. This was approximately six months. The Council should have chased Organisation 1 after it received the nursery’s response in May 2024 and before it informed Mrs X it had completed its investigation in June 2024. This is because the Council was still unclear about the nursery’s charging model and whether the compulsory enhancement fees it charged Mrs X were in breach of statutory guidance. This was fault. The Council does not accept this finding of fault. It says it repeatedly pressed Organisation 1 verbally and eventually received an unhelpful response. Despite the disagreement with the finding, it has accepted our recommendations.
3. The Council subsequently dealt with Mrs X’s complaint formally under its complaints procedure after the Ombudsman’s involvement and it issued its final response to Mrs X’s complaint in January 2025. This meant it took the Council one year to complete its investigation into Mrs X’s case. This was a significant delay, and it was fault.
4. Mrs X chased the Council on several occasions for updates and resolution to her complaint. The Council already accepted and apologised to Mrs X for its poor communication with her and I consider this was fault.
52. I find the Council’s faults as identified above caused Mrs X distress, frustration, and the time and trouble chasing the Council for updates. It also caused uncertainty to Mrs X in not knowing whether the Council properly considered her concerns.
53. Mrs X also complained the Council failed to properly investigate her concerns as to whether Y’s nursery was in breach of statutory guidance for charging her compulsory enhancement fees during Y’s funded sessions.
54. Despite the Council’s delays as stated above, I am satisfied the Council took appropriate steps to properly investigate Mrs X’s complaint about the additional service charges. The Council contacted and liaised with its legal department, Y’s nursery and Organisation 1 on several occasions to better understand and deal with Mrs X’s concerns/complaint. These were not faults. And as a result, in June 2024, the Council asked Y’s nursery to provide parents with improved communication on how to access totally free placements and with clear and detailed charging information. This was to ensure Y’s nursery fully complied with the terms and conditions of the Council’s FEEE agreement and in line with statutory guidance.
55. Furthermore, I note the previous statutory guidance which was in place in 2024 set out the principles of clear, transparent and non-mandatory charges by nurseries. The new statutory guidance which was subsequently issued in 2025 has made it even clearer that in all cases, all chargeable extras must not be a condition of taking up a free place at nurseries.
56. In view of this, the Council said it would reimburse Mrs X with the enhancement fees (this excludes the food and snacks) she paid during Y’s funded sessions from January 2024 to when Y stopped attending the nursery. This is welcome.

Conclusion

57. I welcome the Council’s apology and offer of refund to Mrs X and the service improvements it mentioned in paragraph 49. However, I find these remedies are not sufficient and proportionate in line with our guidance on remedies. This will be addressed in the ‘action’ section below.

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Action

58. To remedy the injustice caused by the faults identified, the Council has agreed to complete the following within one month of the final decision:

• apologise in writing to Mrs X and make her a symbolic payment of £150 to acknowledge the time and trouble caused by the Council’s delays as identified above. The apology should be in accordance with our guidance, Making an effective apology
• as offered, reimburse Mrs X with the enhancement fees (this excludes the food and snacks) she paid during Y’s funded sessions from January 2024 to July 2024. This covers the period from when Mrs X approached the Council until Y left the nursery and Mrs X stopped paying the top-up fees
• share this decision outcome with other Free Early Education Entitlement nurseries/providers in its borough to remind them of its expectations in terms of charging compulsory top-up fees in line with statutory guidance. Invoices and receipts should itemise all charges so parents can see they have received their child’s free entitlement and understand that in all cases, all chargeable extras must not be a condition of taking up a free place at nurseries
• provide the Ombudsman with evidence to show the Council has put in place increased annual audits of nurseries in its borough to ensure they comply with Early Education and Childcare statutory guidance.

59. The Council should provide us with evidence it has complied with the above actions.

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Decision

60. I find some faults by the Council causing injustice to Mrs X. The Council will take action to remedy the injustice caused.

Investigator’s decision on behalf of the Ombudsman

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Investigator's decision on behalf of the Ombudsman