The Ombudsman's final decision
Summary: Mr P complains about changes the Council asked him to make to the charges and terms at the pre-school he runs in order to continue to receive funding to deliver the Free Early Education Entitlement. He also complains about support provided during the COVID-19 pandemic. There is no fault by the Council.
The complaint
Mr P complains about action taken by the Council following a complaint about charges at his pre-school.
The Council asked him to change his notice period and said he could not impose a mandatory charge for children accessing both morning and afternoon sessions when providing the Free Early Education Entitlement.
Mr P says these changes threaten the viability of his business. He says other providers have similar terms and conditions and the Council has not taken action. He believes he is being treated unfairly.
Mr P also complains about support provided by the Council during the COVID-19 pandemic. He complains some providers, in particular maintained providers, received more support than others. He believes this is unfair.
The Ombudsman’s role and powers
We investigate complaints of injustice caused by ‘maladministration’ and ‘service failure’. I have used the word fault to refer to these. We consider whether there was fault in the way an organisation made its decisions. If there was no fault in the decision making, we cannot question the outcome. (Local Government Act 1974, section 34(3), as amended) If we are satisfied with an organisation’s actions or proposed actions, we can complete our investigation and issue a decision statement. (Local Government Act 1974, section 30(1B) and 34H(i), as amended)
How I considered this complaint
I have considered: information provided by Mr P; information provided by the Council.
I invited Mr P and the Council to comment on my draft decision.
What I found
Mr P runs a pre-school.
He offers places under the Government’s Free Early Education Entitlement (FEEE).
This is a national scheme to provide free childcare for children aged 2, 3 and 4. The childcare is funded by the Government and administered by the Council. It is delivered by maintained (school-run) nurseries and private, voluntary and independent sector (PVI) nurseries and childminders.
The eligibility criteria are set by the Government. To qualify, the child, its parents and the childcare provider must meet the eligibility criteria.
Childcare providers can choose whether to offer the free childcare. Parents can choose any provider in the scheme. The Council pays the provider directly for the free childcare.
Regulations set out how councils should administer the scheme. The government has also issued statutory guidance councils must follow and from which they must not depart unless they have good reason.
The key requirements of the guidance are that Councils work with providers to ensure: free places are delivered completely free of charge. (Early education and childcare. Statutory guidance for local authorities published by the Department for Education in June 2018, paragraph A1.30) and providers are completely transparent about any additional charges, for example for those parents opting to purchase additional hours or additional services. (Early education and childcare. Statutory guidance for local authorities published by the Department for Education in June 2018, paragraph A1.29) The guidance says Councils should: not intervene where parents choose to purchase additional hours of provision or additional services providing that this does not affect the parent’s ability to take up their child’s free place. (Early education and childcare. Statutory guidance for local authorities published by the Department for Education in June 2018, paragraph A1.27) and ensure, where reasonably practicable, that children are able to take up their free hours in continuous blocks and avoid artificial breaks being created throughout the day, for example, over the lunch period (Early education and childcare. Statutory guidance for local authorities published by the Department for Education in June 2018, paragraph A2.5) Mr P’s terms and charges A parent complained about the notice period at Mr P’s pre-school and a mandatory charge for children accessing both morning and afternoon FEEE sessions. I have not included the details here to ensure Mr P’s anonymity.
The Council investigated the complaint and concluded Mr P’s pre-school did not comply with the requirements of the scheme.
The Council advised Mr P that his charges were not clear; his notice period for parents who paid for extra hours in addition to their Free Early Education Entitlement was too long, and his charge for children attending both morning and afternoon ‘free’ sessions was not allowed. The Council asked Mr P to make changes to his charges and terms.
Mr P objects. He says the changes threaten the viability of his business.
In correspondence with Mr P, the Council explained why his charges and terms do not comply with the requirements of the scheme. There is no fault in the Council’s decision. I appreciate margins are tight in the childcare sector, but the Council is simply following Government guidance as it is obliged to do.
Mr P complained that other providers have similar charges and terms. He believes he is being treated unfairly. The Council said it investigates all complaints made by parents and will audit all providers to ensure compliance with its latest provider agreement. There is no fault by the Council.
Support during the COVID-19 pandemic Mr P complains maintained providers received more support than private providers during the pandemic. He believes this is unfair.
The Government paid Councils to deliver the full FEEE programme throughout the pandemic. The funding Councils received was based on pre-pandemic demand. The Government advised Councils to fund providers which remained open at broadly the levels they would have expected to see in the 2020 autumn term had there been no coronavirus (COVID-19) outbreak.
All providers were encouraged to remain open, although some chose not to. For those that remained open, some saw increased demand, whereas others had fewer customers.
The Council paid all providers for the childcare they provided. However, changes in patterns of demand left less money available to compensate providers who remained open but had fewer children than in previous years.
To cope with this shortfall, the Council decided to: pay all providers of FEEE for 2 year olds at pre-pandemic occupancy rates; pay private, voluntary and independent (PVI) providers of FEEE for 3 and 4 year olds at 60% of pre-pandemic occupancy rates; and pay maintained (school-run) providers of FEEE for 3 and 4 year olds at 100% of pre-pandemic occupancy rates.
The Council gave the following reasons for its decision: it is difficult for maintained providers to adapt their staffing when lower numbers of children attend since staff costs in maintained settings tend to be more fixed compared with PVI providers. [Staff ratios are prescribed by the Government. Where qualified teachers are employed, which is a requirement at maintained providers, the ratio is one member of staff for 13 children. For providers that do not employ teachers, which is more common in the PVI sector, the ratio is 1:8 so it is easier to reduce staff costs if pupil numbers fall.]
if there is insufficient funding for maintained nursery provision there will be pressure on schools’ wider budgets. [Presumably this pressure is not felt in private providers which operate as standalone businesses.]
private, voluntary and independent providers can apply for Covid-19 local discretionary grants and had a non-domestic rates holiday.
The decision was made by a senior officer under delegated powers because the Council needed to act quickly. The decision was then reported to the Council’s Children, Young People and Skills Committee and the Schools Forum (all councils have a schools forum which brings together representatives from local nurseries, schools, and colleges).
From January 2021, the Council has paid all providers based on the number of children attending (in line with Government guidance).
Although the Council departed from the guidance issued by the Government when it decided to pay private providers, such as Mr P, less than they would have received pre-pandemic, it gave reasons for its decision. Changes in patterns of demand meant Government funding was insufficient to pay providers for the actual childcare they provided and compensate all providers fully for any difference between 2019 and 2020 child numbers. It is for the Council, not the Ombudsman, to decide how to use its limited resources. There is no fault in the Council’s decision.
Final decision
I have ended my investigation. There is no fault by the Council in asking Mr P to change his charges and terms in order to continue to receive funding for the FEEE, and no fault in the way the Council administered the FEEE during the COVID-19 pandemic.
Investigator's decision on behalf of the Ombudsman