Over the past 18 months Nursery World readers have been vociferous in their condemnation of childcare vouchers. Some have threatened to boycott them altogether, while others have proposed a surcharge on parents using them.
Complaints have centred on the fact that there is no standardisation between different companies and schemes, and that the lack of referencing of individual families' payments creates an administrative nightmare.
While vouchers clearly enable companies and their employees to reap significant financial benefits through exemptions from tax and National Insurance contributions, many nursery managers feel they have nothing to gain.
For Sarah Steel, managing director of the Oxfordshire-based Old Station Nursery chain, the lack of referencing is the biggest bugbear.
'We find vouchers are usually processed quite quickly, but some companies do not give a reference with the payment,' she says. 'So when you have more than 1,000 customers, as we do, a payment that just says the amount is not very helpful.'
She also finds vouchers inflexible. 'Often if a parent has a limit set to pay for vouchers each month, this will continue to be processed, even if they drop the sessions used. This can mean they over-pay for several months until the voucher system catches up with the changes, and then we have to pay them back.'
SPEEDING UP PAYMENTS
Both nurseries and working parents had an opportunity to air their frustrations to voucher companies at an HM Revenue & Customs childcare forum that was held in London in October.
Early Years Vouchers Ltd (EYVL), which attended the forum, says that its Autopay option goes a long way to countering the well-documented problems. Using this system, fees are automatically paid into the nursery's bank account as soon as the employer has paid for the voucher. Each payment is referenced with the child's name, the voucher number and the name EYVL for ease of identification.
Amanda Ward, director, says, 'As soon as EYVL receives payments from an employer, funds are redistributed straight to the carer. So, for example, if an employer purchases a voucher for a member of staff on a Monday and pays online so we have the funds the next day, we can then pay the carer on the Tuesday, enabling them to access funds by the Thursday of that week.'
Improving efficiency is also the focus for the UK's largest voucher provider, Busy Bees Childcare Vouchers. It is gearing up to launch its new voucher system, Beetrix, in January. This will provide direct and quick access to its e-voucher site.
Iain Beadle, sales and marketing director, says, 'We have invested heavily in a new operating system which will make vouchers easier to redeem, and the operating system will be quicker to upload.'
Busy Bees already has some satisfied customers. Susan Miller, manager of Stepping Stones nursery in Millom, Cumbria, says, 'We only deal with Busy Bees vouchers and we quite like the fact that they provide a guaranteed, regular payment. As we are only a small setting, the administration of these vouchers doesn't take very long at all and is quite straightforward to do.'
DO IT YOURSELF
Some company employers have recognised that there is not necessarily a need for a third party voucher provider at all. Abacus Solutions, for example, reports a healthy take-up of its virtual childcare voucher solution that allows companies to operate their own schemes in-house.
Senior partner Anthony Rentoul says, 'We believe that cost-conscious employers, wondering what they get for the money spent in buying vouchers from a third party, will increasingly recognise that involving a third party entails no less work than operating one's own scheme. In this case they might as well be saving themselves the substantial profit element in a voucher provider's charge.'
Looking to the future, he anticipates that there will be fewer smaller players in the market because of the attraction that a brand name holds for many employers. But until the market consolidates, it seems that inconsistencies will prevail.
While Sarah Steel at the Old Station Nursery recognises that the investment on the part of big operators such as Busy Bees will ultimately create better systems, she also questions the need for third party providers.
'Each company who signs up to use the voucher service for their employees loses most of the benefit in fees to the voucher company,' she says. 'We have several companies who simply make the salary sacrifice from their employee and then make a monthly payment online direct into our bank account, with the child's name and reference.
'I know the voucher companies won't thank me for it, but it's a very simple process, and as long as the employer uses the correct documentation they can just do it themselves and benefit from the saving.'
Further information
www.busybeesvouchers.com
www.abacusvouchers.co.uk
www.childcare-vouchers.net.
