The rising cost of childcare – from the providers perspective!

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The rising cost of childcare – from the providers perspective!

The letters are looming ….. if you haven’t received yours its likely in draft stage!

It’s that time of year where parents all over the country are getting the annual letter regarding increases in childcare costs.

I can assure you that letter is dreaded equally as much by the authors as it is for the recipients.

Never has there been a year in recent times where we have heard of childcare providers closing doors overnight especially in England where they have actually 30 hours ‘free childcare’. The issue with the free childcare is that is simply isn’t enough to cover the cost of providing the childcare.

Free childcare in England – why is it not working?

The 30 hours free childcare has failed to reach thousands of eligible families because nurseries and childminders are getting inadequate funding from local authorities. Childcare providers are reporting that the difference between the cost of providing childcare for 30 hours and the funding received equates to approximately £2155 per year (source this is OFSTED report that between January and March 2019 179 day nurseries closed in England and 401 childminders.

At Sleepy Hollow we have links with the Day Nurseries owners associations in the UK and we are reading daily about nurseries for sale or sales of nursery contents. The numbers are quite unprecedented.

So why are we at Sleepy Hollow lobbying for subsidised childcare for our working parents in NI?

We mentioned in a blog a couple of weeks ago about our approaches to lobbying. One of those is actively lobbying for a childcare strategy for parents in NI. Prior to the collapse of NI Assembly there was consultation on a childcare strategy which surrounded 3-4 year olds.

This is fantastic but we need to remember that there are already 12.5 hours funded for pre school education WHICH arguably isn’t childcare but it comes out of the same pot in terms of early years education – so what about our under 3’s? Parents need funding assistance from birth and we have all the UNICEF research supporting us in stating that the first 1000 days of a child’s life is the most crucial for development – so why not fund these years.

What of course we don’t want for any parent or provider is a promise of xxx free hours if they aren’t actually free ie. if parents have to subsidise this or if providers have to provide these at a loss using income from other age brackets to part fund the free childcare.

But … we are still a while off from even getting a childcare strategy so at this stage we can only speculate what the outcome might be. We continue to lobby at every opportunity for childcare funding from 0-12 years of age.

Why is childcare so expensive to provide?

Any of our readers who have studied business management or accounting will tell you that the ideal payroll figure for a manufacturing company should be in and around 30% and for any service company like childcare it should be around 50%.

Studies from settings in UK show that childcare can be as much at 75% of income in some settings and even higher in NI.

Why higher in NI you may ask ?

Our childcare ratios of staff to children are higher in NI. We have to employ

1 staff member to every three children for 0-2 year olds

1 staff member to every four children for 2-3 year olds

1 staff member to every eight children from 3-12 year olds.

We also must have two staff members employed in each room as a minimum so even if we only have three 0-2 year olds in a baby room we need to have two staff members employed.  These ratios are the highest in the UK and Ireland meaning we employ more staff bringing our wage bill up to around 80% of total income.

Even in infant schools where we care for children up to primary three we cannot take children from nursery school age meaning that most children from nursery schools have to go back into day nurseries and are being charged full day care spaces. The reason behind having to charge full day care spaces if children are out for less than three hours is that it doesn’t fit in with any other day nursery part time session meaning that that child must be counted in the day care or childminder room ratio that day even if it means they are absent for a period of time for nursery school. Also unlike many of our neighbouring countries 100% of our staff must have or be working towards childcare or equivalent qualifications which range in price from £1000 to almost £4000 – £9000 pa if its for a BA Hons Degree. Quite often employers are funding or even part funding these to retain the staff or at least covering relief staff during staff training or assessment periods.

Now in Sleepy Hollow we ASPIRE to and WANT quality at all times – we don’t necessarily disagree with any of these stipulations but it means childcare is extremely expensive to staff but early years staff across NI aren’t necessarily paid in line with what they should be paid for the excellent role they play in early education. We have renamed all of our roles in our early childhood centre for example to be an early childhood teacher – not a carer, not a nursery nurse and certainly not an assistant. Our staff are extremely proficient in their roles and as much as we lobby for support for working parents we lobby for recognition for our employees so we can get funding for training at least to recognise the important roles they play. Quite simply put staff in our sector would have much less stress, better conditions and shorter working hours if they worked in our large supermarkets – but most childminders and people working in early years or Afterschools choose this career path for the LOVE they have for working with children.

Other costs which may not be apparent!

Heat and light : The cost of heating is huge as we keep our buildings to a certain regulated temperature all year round for up to 13/14 hours per day ensuring for example our heating comes on at 4am on a Monday morning to ensure we are warm for 7.30am. We need to keep it on most of the winter to ensure our temperatures remain warm. Then in summer we have the complete opposite as we fight to keep rooms cool – yes we are never happy (mostly with the fuel bills!)

Quality menu’s require quality provisions: – so we source our supplies from local grocers and butchers to ensure we are providing the best for children and young people in our settings. All of our managers have company pre paid credit cards and they buy from local stores in the proximity to our settings so we are ensuring that everything is fresh. Of course we ensure to buy the core supplies from our large supermarkets to keep costs down but there are many things we need to pick up on a day to day basis.

Transport – have you ever had a quote for minibus insurance for carrying children on a business level cover? I kid you not when I say we have three people carriers and a minibus and this sometimes makes me wonder how Translink can stay afloat! We have just put our bus through PSV again this year and another of our 7 seaters has gone through MOT last week and we are constantly getting services, checking tyres and luckily Stephen our transport manager keeps on top of all things road safety BUT this is a huge overhead for us. Of course all of ur settings make use of the vehicles over holidays because if we had to have bus hire for all of our TRIPS parents would face huge trip fees which we don’t want to have to pass on.

Supplies – we can’t be a childcare provider without the necessary tools of the trade – our equipment. Whilst you may think our Reggio inspired ethos is more affordable in terms of buying fewer toys – well it is in one way as we buy group membership to our local Play Resource Centre and are able to pick up lots of items there but the art and craft supplies are a huge part our monthly outgoings.

Rent – we pay a certain percentage of all of our fees each day in rent. Now we don’t complain about that as that fits in with our social economy ethos it means by using school premises we are making great use of public spaces and giving a percentage of our income back in way of rent which goes directly into school funds.

Rates – we and many of our friends in the sector have been crippled with the rates review. We haven’t got an exact figure yet but our rates bill in our Day Care for example is going up by £0000’s according the the Rates Reveal 2020 draft.

Professional development – in order to keep abreast of best practice Sleepy Hollow DO invest quite a proportion into professional development. We don’t see this as an optional expenditure the same way as hospitals ensure that their staff are trained on new procedures or protocols, banking staff are trained in new legislation or banking software, accountants train on new HMRC rulings – we need to train and update CPD to meet the needs of these very important children and young people in our care.

Subscriptions – we pay subscriptions to magazines, membership organisations and the most importantly to SAGE for our staff salaries and accounts packages. We see this as a necessary expenditure as we need to keep correct records and ensure that we are meeting all of our legislative requirements in terms of staffing needs. However again the bill for this runs into £££

Pensions – this is a tough one! We want to provide staff with pensions we NEED to but the cost is 5% of salaries for providers in an already very labour intensive workplace so our nursery and any nursery is struggling with this relatively new expense .

Maintenance – as with everything in our childcare settings we risk assess, risk assess and risk assess more (we like to add in a benefit column just to ensure that our staff and children don’t see risk as being a negative thing). When something is broken we recycle it but the nature of our sector is that things get broken which need replaced (our most recent one was the oven), walls get drawn on and get messy so they need painted, soft furnishings are washed more than they would be at home so their life span isn’t great even when we buy top quality so we have a high maintenance budget.

…. these are just a few of the overheads that come to mind. I’m sure other providers can add more to the list of outgoings but we wanted to explain WHY as providers we dread the annual increases as much as we dread passing them on. At a recent meeting of the employers forum for childcare providers which I chair providers were talking of increases this year as much as 10% to allow for the significant wage rise in April and the Reveal 2020 rates increases.

Some providers haven’t increased in a couple of years but it’s unlikely settings could survive without seeing significant increases this year.


We WANT parents to get every penny they can with help towards childcare costs and there is no magic solution to what percentage of savings parents can expect through the various support systems out there. That’s why we always recommend that parents contact EMPLOYERS FOR CHILDCARE to discuss your individual circumstances and they will deal with your call in a confidential manner and tell you what you can expect to receive by way of assistance through various savings that can be found out towards childcare costs.

We would also urge parents NOT to transfer over onto universal credits if you are claiming for an increase in childcare costs without phoning to check your circumstances with EFC first. It may not be in your financial interest to move over to universal credits and you MAY be able to avoid doing so. Childcare providers wont be the experts here in helping you with savings but all responsible childcare providers should be signposting parents to where they can get help towards childcare costs.

0800 028 3008 – free confidential helpline

Unregistered childcare – PLEASE DON’T … here’s why

Remember we would urge parents NOT to use unregistered childcare and you should report anyone you know providing unregistered childcare – not only are they not vetted to work with children they also wont be insured in the event of an accident.

Any setting providing childcare, including schools, for more than two hours must be registered with the local HSCT if they are providing CHILDCARE – note activity based extra curricular activities fall outside the requirement to be registered .

We would love to see more advertising campaigns surrounding unregistered childcare as parents will not get any financial help for unregistered childcare.

Another tip for working parents :- 

If you have to pay a balance after any voucher payments check if your provider accepts payment via debit or credit cards. Some of our parents tell us they use cards to accumulate points eg. Tesco card – for example for every £5 voucher you can redeem this for £20 voucher for Irish Ferries (for summer holiday) or vouchers for cinema, food etc. So ensure you are at least making savings through other means if you are paying childcare bills.

We don’t however advocate that you use credit cards to get into debt over childcare bills.  This will only work if you are clearing your credit card bill each month in order to avoid interest. Its simply an alternative to accruing spending or reward points – but if you can accumulate lots of points during the course of a year if you ensure not to be late paying your credit card bill or accruing interest.



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