Why do nurseries and childminders charge for consumables alongside funded hours?

The 2023 spring budget announced a £1,200 bonus for new childminders joining an agency like Koru Kids. We’ll share more information when details have been published.

Government websites often talk about funded hours as ‘free’ hours of childcare. The idea is that parents won’t have to pay for 15 hours of childcare per week when their children are 3 and 4, because the government pays for it instead. But sadly—and unsurprisingly—the reality of how funded hours work is much more complex.

We’ve broken down all your usual childcare costs in our Childcare Guide

Funded hours can be difficult to navigate

The reality of funded hours

The government’s idea of how much money is needed in each borough in London and each country across England doesn’t reflect actual childcare costs for most nurseries and childminders. In order to make a decent living and provide great care with good products and fun days out, childminders often have to charge a little more than what the government offers in terms of funding. 

Government funding is intended to deliver 15 or 30 hours a week of free, high quality, flexible childcare. It is not intended to cover the costs of meals, other consumables, additional hours or additional activities. Parents can therefore expect to pay for any meals offered by the provider alongside their free entitlement. Parents can also expect to pay for other consumables or additional activities offered by the provider, such as nappies or trips.

Early years entitlements: operational guidance

Most childminders and nurseries will offer the funded hours with a consumables charge. This is so they can offer funded places without running a loss. The consumables charge makes up for that loss of income. The parents still pay very little (often around £2 per hour), and the childcare provider can still offer the same quality of care as they do to other children whose parents pay the full amount themselves. 

Common for nurseries and childminders alike

Some nurseries find other ways to get around the issue with funded hours. They might offer 3 hours here or there, well aware that most parents need longer days. And they won’t allow you to use 7.5 hours on one day and 7.5 on another. Instead, you have to pay for lunch or dinner, an hour in the middle of the funded slots, and that rate often makes up for the shortfall.

Childminders that don’t ask for the consumables charge can get stuck in a really awkward situation. Of course parents could send their own nappies, wipes, creams, take care of all the laundry, send home-cooked meals for the childminder to heat up, and snacks and drinks… But how would you feel if you were serving the other children a lovely pasta dish, and the little one you’re looking after asks for some? Or how about some of the carrot muffins you’re having for pudding? You wouldn’t say no either. Often, the childminder ends up out of pocket, or has a situation where they have to bring extra things and treat one child in their home nursery differently. And that’s not great for the child or the childminder. 

Eating together, adventuring together

Funded hours and when they start

Children under 2 and children that have started in reception class are not entitled to funded hours. And parents of 2-year-olds have to meet certain income criteria. But 570 hours a year of funded childcare are available to all children in England between 3–4. This doesn’t start immediately on their third birthday. Instead, the funded hours entitlement can be claimed starting with the term that falls after their third birthday.

15 hours per week… or 570 per year?

You only need a calculator to see that 52 x 15 is 780, not 570. That’s because the 15 hours per week is based on term time only, and that’s 38 weeks per year. Some nurseries and childminders will only accept funded hours during term time. That means you would have to pay full fees during weeks with school holidays, or that you would use the childcare setting during that time at all. But some childminders and nurseries will let you ‘stretch’ the hours over more weeks. For instance, 48 weeks per year come to just shy of 12 funded hours per week.

Not all funded hours are created equal

Funded hours can be nightmarish for childminders and nurseries too. So much so, that some just never set them up. Local authorities are in charge of setting the rates annually, and the rates can differ a great deal, even within boroughs in London. The government provides a guide that local authorities can use to set funded hours. But if you are using a nursery in Bromley (government guided rate at £5.05), and your friend has a childminder in Surbiton (government guided rate at £5.91), that’s a difference of £0.86 per hour. That really adds up. And when a childminder or nursery provides higher quality food and better outings and extras, that could make a huge difference to how much the funded hours actually cover.

Childcare funding in the UK

The consumables charge is a common solution to a distressingly common problem. The 15 hours per week (term time) that the government offers just don’t cover the real costs of childcare. The poor childcare funding in the UK is a real blocker to many parents. We created an article to help parents find out if they are entitled to Tax-Free Childcare or funded hours. And we will keep doing more. But until the government steps up, the consumables charge is the only way for our Early Educators to offer high quality childcare without having take a pay-cut.

There is often extra help available for childcare costs. And we’re happy to help parents look at what help they can get to access the high quality childcare we all want for our children. So please don’t hesitate to reach out to us if you would love to use the service but need help figuring out your childcare costs first. 

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