Summary: Mr X says the Council wrongly said his nursery had charged a compulsory top up fee, reached that decision without giving him an opportunity to comment and treated him differently to other nurseries that operate in the same way. There is no evidence of fault in how the Council reached its decision about the charges Mr X’s nursery was making or evidence it treated him differently to other nurseries. However, the Council did not give Mr X an opportunity to comment before telling him to refund the parents’ fee. That caused him frustration. An apology and guidance for officers handling complaints is satisfactory remedy.

The complaint

1. The complainant, Mr X, complained the Council:
• wrongly said his nursery had charged a compulsory top up fee in addition to the free early education hours, in breach of the Kent Provider Agreement;
• reached that decision without giving him an opportunity to comment; and
• treated him differently to other nurseries that operate in the same way.
2. Mr X says the Council’s actions led to a financial cost on his business.

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The Ombudsman’s role and powers

3. The law says we cannot normally investigate a complaint when someone could take the matter to court. However, we may decide to investigate if we consider it would be unreasonable to expect the person to go to court. (Local Government Act 1974, section 26(6)(c), as amended)
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 an injustice, we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
5. 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. 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)
7. 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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How I considered this complaint

8. As part of the investigation, I have:
• considered the complaint and Mr X's comments;
• made enquiries of the Council and considered the comments and documents the Council provided.
9. Mr X and the organisation 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

10. 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.
11. 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 (FEE).

The Early Education and Childcare Statutory Guidance for local authorities April 2023

12. The guidance includes the following relevant sections for local authority responsibilities:
13. A1.25 Ensure that providers are aware that they can charge for meals and snacks as part of a free entitlement place and that they can also charge for consumables such as nappies or sun cream, and for services such as trips and specialist tuition. Parents can therefore 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. Local authorities should ensure that providers are mindful of the impact of additional charges on the most disadvantaged parents.
14. A1.29 Ensure that providers are completely transparent about any additional charges, for example, for those parents opting to purchase additional hours or additional services.
15. A1.30 Work with providers and parents to ensure that all parents, including disadvantaged families, have fair access to a free place, which must be delivered completely free of charge. 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).
16. A1.33 Work with providers to ensure that 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. Invoices and receipts should include the provider’s full details so that they can be identified as coming from a specific provider.

Kent provider agreement

17. It refers to section 9 of the Childcare Act 2006 which gives the Council powers to ensure any provider with whom they enter into a financial agreement meet the needs of the requirements imposed on them.
18. Section 8.9 says providers should have a written agreement with all parents that take up a FEE place. The parental declaration form can be such an agreement but this must be signed by parents before providers claim funding for the child. Any fees should be clearly set out in a fee structure that shows how FEE is delivered and any additional charges for optional activities outside the free entitlement.
19. Section 14.2 says the Council has a duty to ensure FEE places are delivered completely free and the education people will administer this on the Council’s behalf. Providers must not charge parents a fee for their child’s FEE place.
20. Section 14.5 says the education people will not intervene or arbitrate where parents choose to purchase additional hours or additional services providing this does not affect the parent’s ability to take up their child’s free place.
21. Section 14.6 says providers may charge for meals and snacks as part of a free entitlement place and they can also charge for consumables such as nappies or suncream and other services such as trips and specialist tuition, music and extracurricular activities. Parents should therefore expect to pay for these, although these charges must be voluntary for the parent.
22. Section 14.7 says where parents are unable or unwilling to pay for meals and consumables, providers who choose to offer 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. Providers should be particularly mindful of the impact of additional charges on the most disadvantaged parents.
23. Section 14.8 makes clear providers must make their charges clear in a fee structure and ensure that parents are aware of any charges for additional services before they take up their free place.
24. Section 14.13 says providers should ensure their invoices and receipts are clear, transparent and itemised, allowing parents and the education people and/or the Council to see that they have received their free entitlement completely free of charge and understand fees paid for additional hours or services.

What happened

25. Mr X runs a nursery. The Education People is the trading name of the company the Council owns which manages the FEE entitlement. I will refer to the Education People as if they were the Council as the Council is responsible for the actions of organisations acting on its behalf. Mr X's nursery signed a contract with the Council to deliver FEE. That is the Kent Provider Agreement.
26. The complaint the Council investigated came from a parent whose child attended Mr X's nursery. The child in question originally received private nursery care at Mr X's nursery until the child became entitled to FEE in September 2023. The child stopped attending the nursery from 12 April 2024. The parent then complained to the Council that the nursery had charged a compulsory top up fee for the childcare provided.
27. The Council wrote Mr X to tell him about that complaint on 3 May 2024. In that email the Council referred to previous correspondence between Mr X and the Council where the Council had raised concerns about the transparency of Mr X’s paperwork on the charges. The Council said it supported the parents request for a refund of the added charges less any lunches accessed. The Council said it had calculated the amount to be repaid as £677. The Council said if Mr X had not paid the amount within the timeframe stated or challenged the Council's calculation it would deduct £677 from his next funding payment and pass that amount to the parent. The Council said it wanted to review the provider’s current documents supplied to parents and asked for those by 17 May.
28. Mr X raised concerns about the Council making a decision on the complaint without giving him an opportunity to comment. The Council said it was satisfied the information the parent had provided was detailed and clear and contained the invoices and correspondence and asked Mr X to respond within 10 days.
29. Mr X provided comments on the complaint from the parent on 19 June and again raised concerns about how the Council had investigated the complaint.
30. The Council contacted Mr X on 22 August. The Council said it had considered the evidence and was satisfied the parent had not received their FEE entitlement free as Mr X had attached a supplementary charge to every hour. The Council asked Mr X to provide details of the French lessons accessed by the child so it could confirm the refund required. Mr X told the Council he disagreed.
31. The Council wrote to Mr X on 19 September to note it had not received the information it had asked for about the extra services the child had accessed. The Council acknowledged the terms and conditions document Mr X had provided which he said showed the parents had signed to accept the charge. The Council said the parents had disputed signing that document and as it had been signed after the date the child left the nursery it could not accept that as evidence of acceptance of the costs. The Council said it intended to write to the parents that week to advise it had found in their favour and £677 would be deducted from the next FEE payment. The Council said Mr X could appeal that decision in writing by 3 October. The Council said it was willing to meet.
32. Mr X put in an appeal on 8 October. The Council responded to that on 7 November. The Council said it partially upheld the parents’ claim because it was satisfied Mr X’s nursery was charging a partial top up fee and its invoicing lacked sufficient detail and clarity to be transparent
33. Mr X’s representative contacted the Council on 22 December to explain why Mr X continued to disagree and asked the Council to take the complaint to the next stage. The Council responded to that on 20 January 2025 but did not change its decision.

Analysis

34. Mr X says the Council wrongly decided his nursery had charged a compulsory top up fee in addition to FEE hours, contrary to the Kent Provider Agreement and Government guidance. Mr X says in reaching that view the Council failed to consider his representations and the evidence he provided and treated him differently to other nursery providers.
35. It is not the Ombudsman’s role to decide whether the fee Mr X’s company has charged is legitimate or whether it breaches the Kent Provider Agreement or Government guidance. That is a matter for the Council to decide and can only be challenged in court. My role is to consider whether the Council, in reaching its decision, properly considered the evidence.
36. It is clear the Council accepts nurseries, including Mr X’s nursery, can charge for various items on top of the FEE hours, subject to certain requirements. I set those out in paragraphs 12-16. It is clear the issue in this case is whether the charges Mr X is making are voluntary and clear. It is the Council’s view the charges are not voluntary and also not clear. I have considered the documentary evidence.
37. The Council’s view is Mr X’s method of charging £1.50 per hour to cover multiple matters is not clear or transparent. I am satisfied the Council has explained to Mr X that without a breakdown of that £1.50 charge it is not possible to show how much is charged for each item. The Council has raised concerns about whether parents can opt out of parts of the charge. The Council has also raised concerns about the lack of evidence provided by Mr X to show what the child in question accessed to justify the £1.50 charge per hour. I cannot criticise the Council for asking those questions. It has a responsibility to ensure providers obey the Kent Provider Agreement and Government guidance.
38. Having considered the evidence available to the Council I have no grounds to criticise it for deciding the charges Mr X makes are not clear or transparent and are therefore not in accordance with the Kent Provider Agreement or Government guidance. I am satisfied the Council has reached that view after considering all the evidence and Mr X’s comments. I am also satisfied the Council has explained to Mr X why it does not share his view about the transparency of the charges. I am therefore satisfied this is a matter of officer judgement and not one the Ombudsman can comment on.
39. In reaching that view I recognise Mr X says he has provided the Council with invoices which show the supplementary charge listed separately. I am satisfied the Council has taken that into account as it refers to it in the complaint responses. The Council’s view is that this is inadequate because there are several matters included in the £1.50 charge and the invoices do not specify what is charged for each item or provide any clarity about which of the items the child in question accessed. As I am satisfied the Council has considered Mr X’s representations and explained why it takes a different view there are no grounds on which I could criticise it.
40. I recognise Mr X says until Government guidance changed, after the parents complained to the Council, there was no requirement to itemise invoices. Mr X therefore says the Council should not have required him to do that. I am satisfied Government guidance in place at the time, which I refer to in paragraph 16, makes clear invoices should be clear and transparent. I recognise Mr X believes his invoices are clear and transparent. However, the Council takes a different view. It is not my role to adjudicate on two different views or interpretation of Government guidance. Only a court can do that. As I am satisfied the Council has considered Mr X’s representations and explained why it takes a different view I am satisfied the Council has reached a decision it is entitled to reach. In those circumstances I have no grounds to criticise it.
41. Mr X has provided me with evidence from other nursery providers which the Council is involved in running. Mr X says those nurseries work in the same way and the Council has taken no action against them. I have considered the evidence Mr X provided about those other nurseries and the evidence the Council provided.
42. I am satisfied there is a material difference between the method of charging by those other nursery providers compared to Mr X. First, those nursery providers charge an amount per session rather than an amount for each hour. Also, those providers list the extra charge as covering food, rather than the number of items Mr X’s nursery has included in the charges. In those circumstances I would not expect the Council to require those other providers to itemise how the charges are made up because it covers, in effect, one item: food. That is not the same for Mr X. His charge also covers French lessons, daily forest school experiences, extracurricular experiences, trips out and some toiletries. I therefore do not consider Mr X’s method of charging is comparable with the other nurseries.
43. I am also satisfied the three other nurseries Mr X has provided details of make clear the extra charge is voluntary. For one of the nurseries it makes clear it can provide lunch for an extra charge or parents can provide their own lunch, the second lists optional extras which parents can pay for if they choose to and the third seeks a voluntary contribution for food. I am therefore satisfied there are material differences between how those nurseries work and how Mr X’s nursery works. I therefore could not say the Council treated Mr X differently.
44. The other issue is whether the Council was right to decide there was no evidence Mr X told the parents in this case the charges were voluntary.
45. I understand the parents had sent their child to the nursery for some time and had agreed to the charges before the child became entitled to FEE. That relates though to a period where the child was not entitled to FEE. I have therefore considered what information the Council had about the information given to the parents when their child became entitled to FEE.
46. The Council’s view is there is no evidence Mr X made clear to the parents they could choose alternative sessions without the supplementary fee. The Council was also not satisfied Mr X had given the parents the option of opting out of some or all the supplementary charge. In contrast, Mr X refers to a nursery document which sets out the FEE sessions that do not attract a supplementary fee and the FEE sessions that attract a supplementary fee.
47. I have seen no evidence to show that nursery document was provided to the parents when their child became entitled to FEE. Mr X has also referred to email correspondence with the parents about the availability of FEE sessions without a supplementary charge before their child started at the FEE sessions. However, I have not seen a copy of those emails and I have seen no evidence Mr X provided those emails to the Council. In those circumstances I cannot criticise the Council for deciding there was no evidence the parents had been given the option of not paying the supplementary fee. I further note the Council has raised concerns about the number of items covered in the FEE and the lack of evidence to suggest parents could opt out of some or all the extra fee. Again, I do not have any evidence to show parents were given those options and I therefore cannot criticise the Council for the decision reached.
48. In reaching that view I have considered the point Mr X makes about an email he sent to the parents in March 2024 where he referred to the availability of FEE sessions without a fee. However, I am satisfied Mr X sent that email to the parents in response to their decision to give notice on the nursery place and remove their child. The free option at that point would therefore only have come into play once the notice period had expired. That falls outside the scope of the complaint the Council was investigating and is therefore not relevant.
49. Mr X has also raised concerns the Council made a decision on the parents’ complaint without giving him an opportunity to comment. In contrast the Council says it did not make a final decision about the parents’ complaint until September 2024 and Mr X had an opportunity to comment in the intervening period.
50. I have considered the Council’s first email to Mr X on 3 May 2024, telling him about the complaint. I can understand Mr X’s concern the Council had made its decision before giving him an opportunity to comment. That is because the email to Mr X said the Council supported the parent’s request for a refund of the added charges given earlier communications between the Council and Mr X about his charging arrangements. The email also said he was required to refund the amount requested.
51. I am satisfied that reads as if the Council had reached a decision. I appreciate the Council then entered into correspondence with Mr X and gave him an opportunity to respond to the complaint. However, that does not change the fact the Council’s first contact with Mr X effectively said it had upheld the complaint and told him he was required to make a refund. Doing that without giving Mr X an opportunity to comment, even if there had been earlier communications with Mr X about his charging arrangements, is fault. I would, instead, have expected the Council to invite Mr X’s comments before making a decision.
52. I do not consider it likely though the Council’s approach in this case affected the decision on seeking recovery of the money the parents paid. As I have made clear, I do not consider there is fault in how the Council reached its decisions. I am therefore satisfied Mr X’s injustice is limited to his frustration at not being given an opportunity to comment before being asked to pay the money back. I consider an apology satisfactory remedy. I also recommended the Council issue guidance to complaint staff to ensure they know about the need to allow the provider complained about to respond to a complaint before the Council reaches a decision. The Council has agreed to my recommendations.

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Action

53. Within one month of my decision the Council should:
• apologise to Mr X for the frustration he experienced due to the faults identified in this decision. The Council may want to refer to the Ombudsman’s updated guidance on remedies, which sets out the standards we expect apologies to meet;
• issue guidance to complaint staff to ensure they know about the need to allow the provider complained about to respond to a complaint before the Council reaches a final decision.
54. The Council should provide us with evidence it has complied with the above actions.

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Final decision

55. I find fault causing injustice. The Council will take action to remedy the injustice.

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Investigator's decision on behalf of the Ombudsman