Bolton settings tell council they may be forced to close

Already one nursery in Bolton, Greater Manchester, has shut this year because of rising costs. A second setting, Elms Nursery, which has been operating for 28 years, is due to close in a couple of weeks.

A source at Elms Nursery told Nursery World they had hoped to keep the setting open until Easter, but with the introduction of the National Living Wage, auto-enrolment pensions, and other rising costs, that would not be possible.

Nurseries in Bolton are facing a ‘triple whammy’ of costs from April, with business rates going up – in some cases doubling – reduced or stagnant funding for the free entitlement (the funding rates are currently being consulted on), and an increase in the living wage. This is on top of the phasing in of automatic pensions and the requirement for all staff to be first-aid trained.

A number of providers in the town have expressed concern about their future, and have formed an alliance to lobby the council and Government.

Of the 75 nurseries and 11 childminders in the Bolton Alliance of Early Years Professionals and Owners, half (43) are concerned about sustainability in the next two years. This is the equivalent of just under 50 per cent of the total number of registered early years providers (91) in Bolton.

The 30 hours entitlement is being rolled out in September, following its pilot.

Entitlement funding

Bolton Council will receive an hourly funded rate of £4.37 under the EYNFF, down from £4.56 for 2016/17. Bolton has confirmed that the current base rate is £3.18 per hour per child for nurseries with an early years professional (EYP) and £2.10 for those without. This does not include supplements of up to £2.28 for ‘management’, ‘deprivation’ and ‘flexibility’. For childminders, the base rate is £3.27 per hour per child.

Under the new proposed funding rates, from April all early years providers in Bolton will receive a base rate of a minimum of £3.64 and a maximum of £3.83. Including supplements for deprivation and quality, the most a setting could receive is £4.35 an hour per child.

Under the new rates, nurseries in the Alliance have estimated that they could lose tens of thousands of pounds a year to provide the existing 15 free hours, with their losses significantly higher when these are extended to 30 hours.

Childminders also claim that under the proposed rates, they may be earning less than the minimum wage. Because of this, some ‘very experienced’ childminders say they are considering retiring.

However, the council told Nursery World that because deprivation supplements will be dependent on a child’s postcode rather than a nursery’s, ‘providers will likely get a mix of children and the average rate across all children at the nursery will be a minimum of £4’.

The Bolton Alliance, which has the support of the Federation of Small Businesses, is now calling on the council to reduce business rates.

Local authorities have flexibility to offer discounts on rates to businesses. In 2015, the then childcare minister Sam Gyimah asked the Department for Communities and Local Government to tell local authorities to consider offering business rate relief to nurseries. For councils that did this, the Government would pay 50 per cent of the costs.

The Alliance also wants a transitional period, up to a year or until September, in which any drop in funding is gradually introduced, so providers can make necessary adjustments. It also wants the council to publicise to parents in a leaflet that settings delivering the 30 hours will have a right to charge for extras and add-ons.

A meeting is scheduled with the council’s heads of children’s services and finance today (20 February) to discuss a transitional period.

The Government has said that providers are free to charge parents for consumables, such as drinks, meals and nappies, provided they are not compulsory and this is not a condition of taking up a place. According to the Government, the level of such fees is a matter between providers and parents.

Council’s comment

A council spokesman said, ‘Following a review of early years funding nationally, the Government has reduced the amount it allocates to Bolton. We have to implement a new funding formula within the guidelines as set by Government and have consulted with providers. We recognise, however, that there will be losers in the system and we are looking for ways to manage this process as fairly as possible.

‘A decision will be taken on how the funding is allocated locally once we have finished analysing feedback from the consultation.’

Robert Downes, spokesman for the Federation of Small Businesses, said, ‘There is a storm brewing in Bolton, and if the council doesn’t address this issue many childcare providers could have no other option but to close. Not only would that be terrible for the local economy, but devastating for working parents who will suddenly find themselves without childcare while they are at work.

‘We urge all parties to get round the table to discuss this.’

PROVIDERS' VIEWS

Wells House Kindergarten
Tina Knight (pictured), who owns the nursery, says the introduction of the 30 funded hours scared her.

She explains, ‘I’ve been running the nursery for 20 years and operating in the sector for 30 years. I’ve seen a lot of changes, but this scares me.

‘We currently receive £4.60 per hour per child. Under the proposed new funding rates, this could drop to £3.80, resulting in a projected loss of £12,800 this year – and this is just for the 15 hours. I have to find £40,000 to get to next April.

‘We just can’t deliver the high-quality services required at these funding levels, and I have grave concerns about where this will lead.

‘Bolton Council is effectively asking us to operate at a loss – and that’s not sustainable. We care very much about our children and parents and want to support the 30-hour offer, plus the rights of our employees to have job security.

‘I am going to try my best to offer the 30 hours. I think I can ride the storm, but other settings may not be able to.’

‘There’s a real danger many nurseries in Bolton will have to close or opt out (of the free hours) to survive.’

Eagley House Nurseries
At the moment the nursery group of two settings receives £4.61 per hour per child. It gets an extra 86p for children from deprived areas, five of which are currently eligible.

Owner Julie Robinson says, ‘Depending on which funding option the council chooses, from April we will receive between £3.64 and £3.93 per hour for the majority of children. This means at the worst we will lose 97p per hour per child and at best 68p. Worst case scenario, we will be losing well over £30,000 a year.

‘We will have no option but to pass on extra costs to parents.’

Ms Robinson adds, ‘I am concerned about our sector. With increased costs and reduced or stagnant funding, no nurseries will be viable or able to afford to offer the 30 hours. Quality will also be affected.

‘We know this is a national crisis, but we have improved quality as a whole across Bolton and want the council to support us. I employ three teachers and half of my staff are doing degrees.

‘Providers need a glimmer of hope or the sector won’t exist in ten years.’

Red House Nursery
Owner David Bailey says, ‘The proposed top rate funding is less than what we get at the moment. The council is expecting the nursery to operate on less than minimum wage with these rates.

‘The council has encouraged EYP, but that comes at a cost. We have one EYP. The costs have to be paid for somehow, decisions will have to be made.’ 

He adds, ‘With the 30 hours, there is a risk’.