- Many councils yet to move to monthly payments for funded hours
- Some providers say monthly payments make cashflow tricky
As per the Department for Education’s Model Agreement, local authorities are meant to start paying funding monthly by September. The document states, ‘The local authority should pay all providers, particularly childminders, monthly by September 2018 unless a provider requests and the local authority agree to continue an existing alternative sustainable method of payment.’
Local authorities that are already paying funding monthly include Northamptonshire, Sunderland, Bedfordshire, Southampton and Wiltshire. Both Bedfordshire and Wiltshire councils said they had been paying monthly for some years.
Some providers being paid monthly said they were pleased above the move, including David Wright, owner of Paintpots Nurseries in Southampton.
‘Anything that aids cashflow is a benefit,’ he told Nursery World. ‘We are paid on the 6th of every month for the current month. Previously we received a lump sum twice a year.
‘The only challenge is ensuring the payment you are receiving is what you are entitled to. You have to check more often that you are getting the right payment, and there is a delay in getting the paperwork after the funding, so there is a bit more admin.’
However, for some childcare providers, being paid monthly has created more admin and, for those that are paid in arrears, difficulties managing cashflow.
Of those paying monthly, Bexley and Sunderland are flexible with payments and give providers a choice if they want funding monthly or termly.
Together for Children, which delivers children’s services on behalf of Sunderland City Council, said 55 settings remain on termly payments and 77 have moved to monthly payments.
Not made the move
Local authorities that have yet to move to monthly payments include Bexley, Brighton & Hove, Gloucestershire, Essex, Cheshire West, Shropshire, Enfield and Hertfordshire
Bexley Council said it had worked out a monthly payment schedule, which it would ‘disseminate’ to all providers, who will be offered a choice of whether they want to be paid monthly or continue with termly payments.
Brighton & Hove Council said it had just closed a consultation with providers about monthly payments and was analysing the results.
Treasurer of charity Fiveways Playcentre in Brighton, Keith Appleyard, said, ‘I completed the survey for Brighton & Hove. I opted to stay as we are – payment six times a year. One option was to be paid monthly in arrears. This would mean having to close the setting, displacing 250 children and 36 staff because we don’t have the reserves to fund the £30,000 per month payroll in arrears.
‘Another option for monthly payments did not indicate when in the month providers would be paid. If payment was later than the 15th of the month, we again would have to close because [that is] when staff are paid.
‘Brighton & Hove has warned the outcome will be one-size-fits-all. So, if they say the vote is to change to monthly, then there will be no opting out or asking to revert back.’
Cheshire West said if it receives feedback that monthly payments would benefit the sector, it will carry out a full consultation before a decision is made on changes.
Essex County Council plans to consult with providers in the summer. However, the council said the current process is more beneficial to the sector as it allows for larger sums to be paid in one go, a good proportion of which is in advance.
Helen Palmer, director of Cheeky Monkeys Nurseries, a group of three settings in Colchester, said she would prefer monthly payments for cashflow. She said, ‘On paper my company brings in enough money to be sustainable. However, with most bills needing to be paid monthly, such as HMRC, wages, rent, rates, we have one month where we have plenty of money, then the following month we struggle.
‘The council claiming we have more funding paid termly is not really the argument. Why should we provide a service at a reduced rate (a separate argument altogether) and have to wait up to eight weeks to receive the funds?’
