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Stop losing money on free childcare places - as seen on NMT

Guide to early years funding in the UK

Wow it’s tricky navigating this early years funding system. With each step of the funded process, there has been complications and disjointed grey areas. The team at Nursery In a Box speaks to NMT about the current funding challenges facing nurseries.

With so many changes happening around funding, it’s not surprising that many nursery owners and managers are fearful when it comes down to funding hours.

So we thought it might be helpful to dive into the detail and help you figure this out. Nursery In a Box have over 20 years’ experience managing funded hours and expert knowledge on the complexities of applying these to your invoices. We take a look at how digital technology can help you manage this, and understand the impact funding may have on your nursery or pre-school business.

Keep it simple

The secret sauce to your fees and funding is to keep it simple. Understand which booking patterns are the most popular and generate the most revenue and keep them simple to maximise your revenue, improve occupancy, drive staffing efficiencies and make it easy to apply your funding hours. Understand how much of your revenue is dependent on funding hours and what your shortfall is.

“One of the most common mistakes we often see is an over-complication of fees, over-discounting and fear of funding shortfalls which all have a negative effect on the business which can all be avoided.”

Be careful as many nursery management systems don’t invoice or apply funding correctly, and it’s usually at your expense. If you get lots of invoice queries or funding complications, then maybe it’s time to consider a better management system like Nursery In a Box.

“Nursery In a Box can easily handle all the complexities of invoicing and funding claims so you’re accurate to the penny.”

New funding changes

With the phased roll-out of the UK governments expanded childcare offer from 1 April 2024, which sees working parents of two-year-old children offered 15 hours’ ‘free’ childcare and nine- month-olds from September 2024, we have upgraded our current management system to account for these changes with funding hours easy to apply, calculate and claim.

Increased demand for funded places

We know how resilient the sector is and the demand for places continues to rise. With increased demand for places it’s really important that you track and manage enquiries effectively in addition to your waiting list. We provide website and social media forms for parents to easily apply online for places and make it easy for nurseries to track conversion rates and manage all enquiries in one place using our simple Enquiry Tracker.

Understand your funding shortfall

For many the funding received from the local authority does not cover the full cost of a child’s care and to remain sustainable a charge for meals, snacks, consumables, extra hours and additional services may be required. With lots of noise around the two-year funding rates it’s very important to keep your eye on the three-to-four-year rates as this is probably where most of your funding revenue comes from and also where your biggest funding shortfall is.

Funding revenue

First, we would look at how much revenue comes from your funding places. Across our network of 500-plus nurseries and pre-schools, we often see two trends in where revenue comes from. You are either a 20% funded nursery or you’re a 80% funded nursery. Each one places questions over sustainability.

As an example, if you receive 15 hours funding for three-to-four-year olds at £5 per hour and your daily charge is the national average of £6.50 per hour, then you would have a funding shortfall of £22.50 on a 15 hour funded child. This would equate to a funding shortfall of £42,750 per year based on 50 children attending 38 weeks in the year. It gets even worse for 30 hours children. This is clearly unsustainable for most nurseries and preschools in the UK.

At Nursery In a Box we make it easy to see your funding shortfall so you can decide how to apply meals, consumables and additional services correctly and accurately.

Easy to apply and claim your funding hours

With over 20 years’ experience we try and make it as easy as you can to apply and claim funded hours.

  • Auto apply funding hours
    Easy to apply funding hours to all of your funded children with the click of a button.
  • Automate funding shortfalls
    Automate your funding shortfalls with the click of a button and let technology do the work for you.
  • Produce your funding claim form
    Your funding claim forms itemise each child’s funding hours whether you apply funding to a term or stretched across the year so it’s clear to see and therefore reduce funding queries from your parents.

In summary

Nursery In a Box can easily handle all the complexities of invoicing and funding, so you can remain sustainable and maximise your revenue.


Marketing Manager

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