Proposal to Amend the Payment and Concessionary Structure of the Nursery Charging Policy (In Line with the Corporate Concessionary Framework)

THIS REPORT RELATES STIRLING COUNCIL TO ITEM 6 ON THE AGENDA

EXECUTIVE CHILDREN’S SERVICES

4 SEPTEMBER 2007 NOT EXEMPT

PROPOSAL TO AMEND THE PAYMENT AND CONCESSIONARY STRUCTURE OF THE NURSERY CHARGING POLICY (IN LINE WITH THE CORPORATE CONCESSIONARY FRAMEWORK)

1 SUMMARY

1.1 The Nursery Charging Policy for extended hours of provision within Stirling Council nurseries was introduced in August 1999 having been recommended as part of the 1998 Early Childhood Policy Report and following detailed consultation with parents.

1.2 In 2006, the Council adopted a corporate Concessionary Framework relating to all charging and concessions mechanisms across the Council. The administration of the payment and concessionary structures within the Nursery Charging Policy have been reviewed in line with that framework.

1.3 This report makes recommendations for changes to the collection of payment administrative structure within the Nursery Charging Policy and the concessions offered within the current charging scheme, in order to bring it in line with the corporate Concessionary Framework.

1.4 The current Nursery Charging Policy is underpinned by 2 key principles:–

- fairness

- charging only for enhanced provision.

The fee rate is revised annually in line with inflation and for 2006/2007 is set at £2.35 per hour. This will increase to £2.42 per hour for session 2007/2008.

Parents are charged only for the hours their child actually attends nursery as opposed to the hours their child has been allocated in the nursery.

Enhanced provision is considered to be any hours attended over and above a child’s free 12½ hour per week pre-school entitlement during term-time. This entitlement applies only to children aged 3 or 4 years old.

Children under 3 have no entitlement to free nursery provision and in principle, are expected to pay for all hours attended. A range of exemptions and concessionary reductions currently apply which support free or reduced cost access to enhanced provision for vulnerable families with children aged 0-5 years.

1.5 The proposed changes will bring the Stirling nursery charging structure in line with the Council’s Concessionary Framework, and with the payment structures within both other sector early years providers and in many other local authority areas.

1.6 The full detail of the current Nursery Charging policy is contained in Appendix A of this report, along with a summary of the review of the charging policy in Appendix B and an illustration of the proposed eligibility for concession levels at Appendix C.

2 RECOMMENDATION(S)

It is recommended that, on the basis of the review of the Nursery Charging Policy in line with the Concessionary Framework, that the Executive agrees that:-

2.1 The administration of the payment structure should be amended to allow for the collection of fees against the hours allocated to a family - as opposed to the hours attended by the child.

2.2 The automatic allocation of 12½ hours of free provision to children under 3 who are resident in an area of rural isolation or a designated urban area of need is removed, in order to ensure an equitable position across the Council area.

2.3 To introduce a single concessionary rate linked to family income, which reflects the current operation of concessionary rates across other services.

3 CONSIDERATIONS

3.1 Background

Other than the requirement to provide a nationally set allocation of free part- time pre-school education for 3 and 4 year olds, there is no legislation or guidance from the Scottish Executive with regard to applying charges for early years provision.

The National Childcare Strategy for Scotland (1998) outlines the commitment required from local authorities to ensure the provision of high quality, accessible, affordable childcare in all neighbourhoods for children aged 0- 14years.

However, the funding supporting this is considerably less than that supporting universal entitlement to pre-school education and the funding of childcare costs remains first and foremost a parental responsibility. Working Families Tax Credit has been made available to assist parents to meet these costs.

N:\DEMSUPP\NewDecisions\Executive\Reports\EX20070904Item06NurseyChargingPolicy.doc As part of the Council’s commitment to supporting vulnerable families and its aim of providing access to affordable early childhood services, a range of exemption from payment and concessionary reductions are included in the current nursery charging policy. However, not all of these current concessions are in line with the principles of the Council’s 2006 Concessionary Framework.

Exemptions from charging are currently offered to families entirely dependent upon Income Support or otherwise on a low income. Low income is assessed using the qualifying criteria for Council Tax Benefit and/or Free School Meal eligibility – ie families in receipt of Child Tax Credits with an income of no more than £15,050 per year.

Exemption also applies to families whose child has been referred to nursery as a result of their name being placed on the Child Protection register.

As part of the Council’s commitment to offering early support and intervention to vulnerable children in order to secure improved long-term outcomes, families of children under 3 - whose child has been referred for a nursery place by an Educational Psychologist - are also considered exempt from charges for the first 12½ hours of provision.

No change is proposed to these exemption categories - as the major intention of the Concessionary Framework is to assist individuals or families on low incomes or from vulnerable or disadvantaged groups, by making aspects of family, community, economic, educational and civic life, affordable and accessible.

Current concessions offer:-

a) the allocation of 12½ hours of free provision to under 3’s resident in remote rural areas and designated urban areas of need

b) 50% concessionary rate for families, regardless of income, with more than 1 child attending the nursery

c) 50% concessionary rate where the main earner in a family is in full-time education or training

d) 50% concessionary rate for provision during the holiday periods for all families, regardless of income. (This was introduced in 2001 as an incentive to encourage families to use the provision over the summer.)

It is proposed to move to a single 50% concessionary rate directly linked to low income and targeted towards any families who are not eligible to receive Working Tax Credit – ie those working less than 16 hrs per week.

Support will be available to assist families to access Child Tax Credits or Working Tax Credits from the Council’s Income Maximisation Team. The childcare element of Working Tax Credit can cover up to 80% of a family’s childcare costs and families with joint income of up to £52,000 per year are eligible to receive it.

N:\DEMSUPP\NewDecisions\Executive\Reports\EX20070904Item06NurseyChargingPolicy.doc Example:

Single parent with 1 child at nursery working 35 hrs minimum wage:

Monthly Income - £298.49; Childcare Costs - £117.76; Tax Credit - £81.31

Actual Monthly Cost for Childcare - £23.55

Currently, families are only charged for the hours their child actually attends at nursery rather than the hours allocated to them - ie if a family is allocated a place from 8.30am until 5.30pm (9 hours) but collect their child at 4.00pm instead, they only pay for 7½ hours of provision.

No charge is applied for any weeks that the child is on holiday and not attending nursery and no limit is set on the number of holiday weeks per year.

This is not in line with the payment structure in other sectors or in many other LA areas. In some cases it also leads to “place blocking” where families have been allocated places they are not fully using but have no incentive to give them up – and the nursery is prevented from reallocating the place to any other child.

It is proposed that the payment structure be amended and that families are charged for the full hours allocated to their child with an allowance of 4 weeks per year to be considered as “holiday” weeks when the family would not be charged. Similarly, if a child was absent due to long-term illness (e.g. over 2 weeks), no charge would be applied.

No charges would be applied over the 2 annual fixed closure weeks (Easter & Christmas) or public holidays when the nursery service was unavailable.

3.2 This would mean that charges would apply over 45 weeks of the year once the 2 fixed nursery closure weeks (Easter and Christmas), 1 week for other public holiday closures and 4 holiday weeks were subtracted. In effect, families would purchase time within the nurseries in half or full day blocks.

It is anticipated that the proposed changes to the payment structure may have some impact on the level of demand, however, this is likely to be short-lived and is outweighed by the opportunity to allow for more coherent planning to make maximum use of the nursery resource.

Adopting this model would bring the Stirling Nursery Charging Policy broadly in line with both other sector providers and other local authority provision across Scotland.

N:\DEMSUPP\NewDecisions\Executive\Reports\EX20070904Item06NurseyChargingPolicy.doc 4 POLICY/RESOURCE IMPLICATIONS AND CONSULATIONS

Policy Implications Diversity (age, disability, gender, race, religion, sexual orientation) No Sustainability (community, economic, environmental) No Corporate/Service Plan No Existing Policy or Strategy Yes Risk Yes Resource Implications Financial Yes People No Land and Property or IT Systems No Consultations Internal or External Consultations Yes

Policy Implications

4.1 In addition to the necessary amendment of the Nursery Charging Policy itself, it is recognised that there is some short-term level of risk in terms of potential loss of custom should families choose to remove their children to other sector providers.

Resource Implications

4.2 The amendment of the payment structure and concessionary framework is intended to address the savings we are required to make in the service as agreed by Committee during the budget setting process. These proposals will help us to achieve this whilst ensuring that sufficient criteria remain in place to safeguard free or low cost access to provision for more vulnerable families.

Consultations

4.3 Consultation has taken place with Nursery Heads, and with the early years officers within Children’s Services Learning & Development Team and Children’s Services Support & Development Team.

5 BACKGROUND PAPERS

5.1 Stirling Council Nursery Charging Policy 2006/2007.

5.2 Summary of the review of the Stirling Council Nursery Charging Policy, May 2007.

N:\DEMSUPP\NewDecisions\Executive\Reports\EX20070904Item06NurseyChargingPolicy.doc Author(s) Name Designation Tel No/Extension

Heather Douglas Service Manager (Support & 2458 Development)

Approved by Name Designation Signature

David Cameron Director of Children’s Services

File Name: T:\WP\HOS\Km\Ch Comittee Date Reference Reports\ExecRepProposaltoamendthepay mentandconcessionarystructureofthenurse rychargingpolicy.doc

N:\DEMSUPP\NewDecisions\Executive\Reports\EX20070904Item06NurseyChargingPolicy.doc APPENDIX A

Charging Policy 2006

Stirling Council is committed to the implementation of a charging policy that is fair and provides access to affordable early childhood services.

Following detailed consultation with parents and agreement by the Children’s Committee, charging for early years extended provision for 0-5 year olds was introduced in those nursery establishments that offer enhanced provision, from August 1999.

Key Principles of Stirling’s Charging Policy

• Charges apply for enhanced early years provision (provision over and above entitlement)

• Fairness

Stirling Council currently offers enhanced extended hours provision in 15 establishments:

Arnprior* Doune Raploch Baker Street* Fallin* Wellgreen* Castleview* Hillview* Dunblane Nursery Class Cornton* Killin & Crianlarich* Newton Nursery Class Croftamie* Park Drive Aberfoyle Nursery Class

(*Nurseries with places for children under 3 years old)

However, charges may apply in ANY Stirling Council nursery where the child attending is deferring entry to primary school and where his/her application for a continued funded place was refused.

Entitlement to Free Provision

All children aged 3 or 4 years old are entitled, under the Government’s arrangements for the provision of pre-school education, to a free nursery place for a minimum of 2½ hours x 5 sessions or the equivalent 12½ hours, per week, term time over the academic year.

This 12½ hour free provision entitlement also applies to children aged 4 or 5 years old who are deferring entry to Primary 1 AND whose birthdays fall in the months of January or February.

Charges for nursery provision, therefore, only apply for enhanced provision - that is, provision over and above the 12½ hour Government entitlement, including deferred entry entitlement, for the 3-5 year age group.

N:\DEMSUPP\NewDecisions\Executive\Reports\EX20070904Item06NurseyChargingPolicy.doc Children aged under 3 years old have NO entitlement to free nursery provision under the Government pre-school nursery entitlement scheme. However, in view of the Council’s aim to provide access to affordable early childhood services and taking into account the difficulties faced by many families with young children, a range of criteria for limited free provision or reduced payments in certain circumstances, may be applied.

Charging for enhanced provision - Who Pays ?

Charging for enhanced provision is linked to the nursery admissions policy and admissions criteria. All parents who are able to pay will be expected to make a contribution.

Therefore, all parents accessing enhanced provision, who do not fall within the exemption categories, will be eligible to make payments. These payments may be at the full rate or at a reduced rate according to the eligibility criteria set out in this guidance.

Charges for enhanced provision apply to all 3 - 5 year olds accessing nursery provision over and above their 12½ hour entitlement – subject to the application of the exemption and reduction categories outlined in this guidance.

Children aged under 3 years old are subject to charges for ALL hours of nursery provision - unless they fall into the exemption and reduction categories outlined in this guidance.

Charges may also apply to SOME children aged 4 or 5 years old, whose birthdays are outwith January / February and who are deferring entry to primary school and continuing to access a nursery place.

Children whose birth dates fall outwith the months of January and February are NOT entitled to defer entry and we receive NO funding to support these places.

In cases where the Deferred Entry Panel supports the application to defer :

- the Council will fund the place and no charge will be made to the parent for the 12½hour standard session allocation. Charging will apply to all hours over and above the 12½ hour allocation as normal, subject to the application of the exemption and reduction categories outlined in this guidance.

In cases where the Deferred Entry Panel does NOT support the application but where the parent still wishes to access a place within the nursery :

- the Council nursery charging rate will apply with no exemptions or reductions to ALL hours accessed including the 12½ hour standard allocation.

Unit Charge (Hourly Rate)

The unit charge is based on an hourly rate calculated on occupancy, cost and comparison with other providers.

For Session 2006 / 2007 the rate has been set as: £2.35 per hour

For Session 2006 / 2007, the 50% reduced hourly fee rate (applicable where the eligibility criteria are met) has been set as: £1.17 per hour

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Criteria for Exemption from Payment / Reduction in Fee Rate

As part of the Council’s commitment to supporting vulnerable families and its aim of providing access to affordable early childhood services, a range of exemption from payment and reduction of fee categories have been agreed.

Exemption from Payment

Families meeting the following eligibility criteria may be considered exempt from payment of nursery fees. This means that ALL of the hours accessed within the nursery service shall be free of charge.

Exemption categories apply to all children aged 0-5 years (including January / February entitled deferred entrants) attending nursery.

Low income families

a) Families in receipt of Income Support or Income –Based Jobseekers Allowance or other government benefits as the major source of family income will be considered exempt from charges

Families will be expected to provide evidence to support the exemption process eg. Benefits Book./ letter of entitlement.

Exemption from payment ceases immediately if their Income Support or Income- Based Jobseekers allowance ceases.

b) Families receiving Child Tax Credit ONLY (ie not in receipt of Working Families Tax Credit) and having a gross annual income not exceeding £13,230 (as assessed by the Inland Revenue on their Tax Credit Award Notice TC602) will be exempt from charges.

They must produce their Child Benefit book or letter of entitlement and their current Tax Credit Award notice TC602 as proof of qualification.

c) Families in receipt of Working Families Tax Credit WILL be expected to pay as the purpose of the tax credit relates directly to assisting in meeting childcare costs.

Referred children

a) Families where children are subject to formal referral as a result of having their names recorded on the Child Protection Register may be exempted from charging.

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Reduced Fees

A 50% reduction in fees for families in certain circumstances will also apply. Reduced fee categories for children aged 3-5 years are differentiated from those for children aged 0-3 years.

Children Aged 3-5 years

a) Families where one or more parent/s are in full time education or training AND where that parent is the main earner or source of family income, will receive a 50% reduction on the hourly rate payable.

Families will be expected to provide evidence to support the reduction process in relation to students and trainees – eg. Confirmation from the college/university or training provider

Where the parent who is studying or training is NOT the main earner or source of family income, no reduction will apply.

b) Families who have 2 or more children attending the nursery will receive a 50% reduction on the fees of the eldest child. This reduction ceases immediately the eldest child leaves the nursery.

In all cases only one reduction category may be applied leading to a maximum 50% reduction.

Children Aged 0-3 years

Children under 3 years of age have no entitlement to free nursery provision and will generally be charged for all hours attended. However, in view of the Council’s aim to provide access to affordable early childhood provision, in the case of children aged 0 – 3 years only, a further reduction in fees category may be considered : a) Children aged 0-3 years old may be considered to have an equivalent 12½ hours entitlement to provision at no charge, where they are resident within either an area of rural isolation or within a designated area of need. (Refer to The Points System: Environmental Factors) b) Children aged 0-3 years old may also be considered to have this equivalent no charge entitlement where they would be eligible under either of the other 2 reduction categories ie.student / trainee parent as main earner OR 2 children attending the nursery (assuming in this instance that both children are under 3) c) Children aged 0-3 years old may also be considered to have this equivalent no charge 12½ hour entitlement where they have been formally referred to the nursery by Children’s Services Educational Psychologists.

In ALL cases for non-exempt children under 3 years old, any hours over and above the 12½ hour allocation will be charged at the full hourly rate. No 50% reduction will apply.

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Holiday Provision Charges

Charging for nursery places outwith term-time is currently under review. Further information will be issued between August and October 2006.

Charges for Provision of Lunches

Lunches provided within nurseries by Catering Services should be charged for at the rate of £1.65 per meal.

Families who are EXEMPT from charging for extended provision as they are in receipt of Income Support or Income –Based Jobseekers Allowance or because their child’s name has been recorded on the Child Protection Register, will AUTOMATICALLY QUALIFY FOR FREE MEALS. Entitlement to Free Meals ceases immediately if their Income Support or Income-Based Jobseekers allowance ceases.

Families receiving Child Tax Credit ONLY (ie not in receipt of Working Families Tax Credit) and having a gross annual income not exceeding £13,230 (as assessed by the Inland Revenue on their Tax Credit Award Notice TC602) will AUTOMATICALLY QUALIFY FOR FREE MEALS. They must produce their Child Benefit book or letter of entitlement and their current Tax Credit Award notice TC602 as proof of qualification.

Charges for Nursery Transport

Children attending Stirling Council nurseries have NO statutory entitlement to transport between home and nursery.

The Council, however, is committed to enabling children and families to access the services they need. Minibus vehicles have been provided, therefore, at a number of establishments to support families who may otherwise have difficulties in getting their child to nursery.

The following nurseries operate minibus services for children:

Arnprior ; Baker St ; Croftamie ; Doune ; Fallin ; Killin

Nursery transport provision is currently free of charge to all parents. However, this is under review and further information will be issued between August and October 2006.

For general advice and support on policy matters related to nursery charges, please contact: Heather Douglas on 01786 442458 Specific queries regarding the administration procedures for nursery charging should be directed to: Lisa Macaulay on 01786 44 2789

N:\DEMSUPP\NewDecisions\Executive\Reports\EX20070904Item06NurseyChargingPolicy.doc Charging Policy Administration Procedures

The following section outlines the administration procedures to be followed in implementing the Charging Policy.

System required for administering nursery charging policy and collection of fee income:

1. Extended Hours application forms must be completed for all parents to assess eligibility for paying. You should consider the exemption criteria, reduction categories and any discretionary elements when assessing these forms.

Where a parent meets either the exemption or reduction criteria, you must record the evidence provided and retain a photocopy of it.

Children attending the nursery as non-funded deferred entrants do NOT require to complete an extended hours application form and are NOT entitled to any exemption or reduction of fees.

2. Bills must be raised on a monthly or weekly basis for parents accessing extended hours or non-funded deferred entry nursery provision. Copy to be retained by nursery.

Parents should be asked to give at least 2 weeks notice of planned holidays or where they no longer require to access extended hours or a non-funded deferred entry place to allow admin time for the processing of any amendment to their regular invoice.

A system of double checking invoices issued and fees paid should be applied to ensure accuracy. (I.e. Second staff member checking the information recorded) Where this is not practicable, a system of ‘spot checks’ should be applied once a month.

3. Billing with respect to attendance hours should be rounded to the nearest quarter hour. A payment sheet should be created and maintained to enable a formal record to be held of all payments made. This should detail the child’s name, date of bill, date of payment and be cross referenced to the receipt number.

4. Payment may be made by cash or cheque. The Council currently has no facility for supporting payment of nursery fees by standing order or direct debit. If payment is made by cheque, then cheques to be made payable to ‘Stirling Council’.

In case of postal income, 2 people should be responsible for opening the mail in order to record and witness monies received, and details noted on the payment sheet accordingly.

A Stirling Council receipt MUST be issued for all fee income received and cross referenced with the payment sheet.

5. Cheques and cash must be banked without delay using pay-in books at the nearest Royal Bank of Scotland. Primary schools can bank nursery class cheques.

Cash must not generally be held at the nursery. If there is a delay in banking, however, any cash held at the nursery must be stored in compliance with the

N:\DEMSUPP\NewDecisions\Executive\Reports\EX20070904Item06NurseyChargingPolicy.doc Financial Regulations and Insurance Limits. (Full guidance on the Financial Regulations is available on the Council Intranet.)

As a general rule, where cash has to be stored short-term, up to £500 can be held in a lockable receptacle, in a locked filing cabinet, desk drawer or cupboard.

6. Income Received Vouchers can be generated via the Dataease System. The Royal Bank of Scotland pay-in stub should be attached to a voucher and sent to Viewforth, once authorised by Nursery Head.

7. Alternatively, where it is inconvenient to pay income received into the Bank, cheques only may be sent to Viewforth via the weekly mail run, along with a completed income received voucher. Cash must not be sent via the weekly mail run but may be paid directly into the Cash Room in Viewforth.

8. The income received voucher must include sufficient information relevant to the fees being banked to enable easy tracking of each transaction. It is also essential that it is coded appropriately - all extended hours fee income MUST be coded to account code ‘7571’.

A copy of the monthly transactions will be issued by the finance section, to enable all extended day nurseries to check that income posted to the ledger correlates with their payment sheets and income banked.

9. In the event of non-payment of extended hours or non-funded deferred entry fees:

A verbal reminder should be given to the parent by the Nursery Head after 21 days.

This should be followed by a written reminder after 28 days also from the Nursery Head.

Should payment still not be received after a further 7 days, a request should be made to the Children’s Services finance section to raise a formal Stirling Council Invoice. The Council’s arrears department will pursue the debt from here. Please contact Lisa Macaulay to initiate this process.

For further information or support with the administration processes for nursery charging please contact:

Lisa Macaulay, Accountant, on 01786 442789

N:\DEMSUPP\NewDecisions\Executive\Reports\EX20070904Item06NurseyChargingPolicy.doc APPENDIX B Stirling Council Children’s Services

Review of the Nursery Charging Policy

April 2007

Contents

1. Policy Context Page 2

2. Stirling Council Nursery Charging Policy Page 2

2.1 Council Charging Rate 2.2 Current Exemptions & Reductions 2.3 Fee Income 2.4 Under 3’s Fee Income

3. Stirling Council Concessionary Framework Page 4

3.1 Families on a Low Income 3.2 Referred Children 3.3 Reduction Categories / Concessionary Allocations

4. Comparison with the Private Sector Page 6

5. Recommendations Page 7

N:\DEMSUPP\NewDecisions\Executive\Reports\EX20070904Item06NurseyChargingPolicy.doc Stirling Council Children’s Services

Review of Nursery Charging Policy

1. Policy Context

The provision and expansion of early education and childcare has been a Government priority since 1998 which saw the launch of both the Pre-school Education Initiative and the National Childcare Strategy for Scotland. These were enhanced by Sure Start Scotland funding (introduced in 1999) which targeted services for vulnerable children under 3.

The Pre-school Education Initiative –

ensures that every child aged 3 or 4 years old, whose parents wish it, is able to access a free part-time, term-time place in a nursery or partner centre. Significant government funding is made available to support this universal provision on a place by place basis.

The Childcare Strategy –

outlines the commitment to ensure the provision of high quality, accessible, affordable childcare in all neighbourhoods for children aged 0-14years. However, the funding supporting this commitment is considerably less than that supporting pre-school education and the government remains clear in its view that funding childcare remains first and foremost a parental responsibility. Working Families Tax Credit has been made available to assist parents on relatively low incomes to meet these costs.

The Sure Start Scotland initiative -

followed these 2 key policies in 1999 and is aimed at services for vulnerable children under 3. In Stirling, this funding has been largely used to provide access to nursery places for children under 3 across the regeneration communities and in some isolated rural communities.

The Scottish Minister’s response to the relatively recent (June 2006) Early Years Inquiry reiterates the vision of high quality, accessible childcare with a particular focus on vulnerable families. It is suggested within the response that a revised over-arching strategy will be published after the 2007 elections, however, clearly this may be dependent on the outcome of the elections and to date no indication has been given of likely funding priorities or levels.

Other than the requirement to provide a nationally set allocation of free part-time pre- school education for 3 and 4 year olds, there is no legislation or guidance from the Scottish Executive with regard to applying charges for nursery provision.

2. Stirling Council Nursery Charging Policy

Stirling Council’s Nursery Charging Policy was introduced in August 1999 following detailed consultation with parents which indicated a willingness on their part to pay for non-core provision. The key principles supporting the policy are :

N:\DEMSUPP\NewDecisions\Executive\Reports\EX20070904Item06NurseyChargingPolicy.doc • Fairness • Charging for enhanced provision (core provision remains free at point of delivery)

Currently, charges apply for enhanced extended hours provision in the following 15 establishments:

Arnprior* Doune Raploch Baker Street* Fallin* Wellgreen* Castleview* Hillview* Dunblane Nursery Class Cornton* Killin & Crianlarich* Newton Nursery Class Croftamie* Park Drive Aberfoyle Nursery Class (*Nurseries with places for children under 3 years old)

However, charges apply in ALL Stirling Council nurseries in relation to non-LA supported deferred entrants.

2.1 Council Charging Rate

The current charging rate is £2.35 per hour for all hours over and above the free 12½ hour term-time entitlement for 3 and 4 year olds. This rate is reviewed annually and increased in line with inflation. Families pay only for the hours attended.

Children aged under 3 years old have NO entitlement to free nursery provision under the Government pre-school nursery entitlement scheme and in general would be expected to pay for all hours attended. A range of exemptions and reductions apply, however, which support free or reduced cost access to provision for vulnerable children.

A charging rate of £1.17 per hour applies during school holiday periods. This was introduced in 2001 to encourage year round access as numbers in some nurseries reduced considerably over holidays. The 12½ hour free entitlement is a term-time entitlement and thus all hours in holiday periods may be considered “enhanced” provision. The application of the concessionary £1.17 rate is not income related and is applied to all children attending.

2.1 Current Exemptions & Reductions

Families who can provide evidence of Low Income and families who have been formally referred to nursery as a result of their child’s name being placed on the Child Protection Register are exempt from paying for enhanced provision.

This exemption from charging applies to all children 0-5 years old.

Families of children aged 3-5 years, where the main earner is in full-time education or training, receive a 50% reduction on fees for any hours over and above the 12½ hour free entitlement.

Families of children aged 3-5 years, who have 2 or more children attending the nursery, receive a 50% reduction on the fees of the eldest child only for any hours over and above the 12½ hour free entitlement.

N:\DEMSUPP\NewDecisions\Executive\Reports\EX20070904Item06NurseyChargingPolicy.doc Families of children under 3 receive the first 12½ hours of provision at no charge where they are resident in either an area of rural isolation or a designated area of need (as set out in the Nursery Admissions Guidance)

Families of children under 3 receive the first 12½ hours of provision at no charge where they would meet the criteria for the 50% reductions offered to children aged 3-5 years.

Families of children under 3 receive the first 12½ hours of provision at no charge where they have been formally referred to the nursery by Children’s Services Educational Psychologists.

In all cases, for non-exempt children under 3 years old, any hours over and above the first 12½ hours free allocation (where families meet the criteria) are charged at the full hourly rate. No 50% reduction applies.

2.3 FEE INCOME

Nursery fee income over the last 3 years (including current year projections) has averaged at just under £192,000 per year. Year Fee Total 2004/2005 £197,055 2005/2006 £185,506 2006/2007 £192,307 (projected)

The actual fee income level is very variable from nursery to nursery according to local circumstances – in some nurseries a higher percentage of vulnerable and/or exempt from payment families attend than in others. (e.g. although Fallin Nursery is double the size of Croftamie Nursery, the fee income it generates annually amounts to approx half of the income generated by Croftamie.)

In 2005/2006, of the total fee income, £14,238 was generated over the summer holiday period when the fee rate reduced by 50% to £1.17 per hour.

Had no reduced rate been in place, the income level for that period could potentially have doubled, however, this must be offset against the question of whether the same numbers would choose to attend if the cost was greater.

2.4 Under 3’s Fee Income

In 2005 / 2006, children under 3 accessed approximately 1,400 hours of nursery provision per week at no cost to their parents.

Had the full rate charge been applied for that free provision, an additional income of £3,290 per week (£128K over the 39 weeks of the school year) could have been generated.

However, places for children under 3 are in great demand and we currently receive more than 3 applications for every place we have available. The allocation of places, therefore, is prioritised according to the Nursery Admissions Guidance which gives highest priority to vulnerable children and families.

N:\DEMSUPP\NewDecisions\Executive\Reports\EX20070904Item06NurseyChargingPolicy.doc This means in practice, that in most urban nursery establishments many of the children under 3 are either exempt from charging or entitled to reductions according to the current terms of the Nursery Charging Policy. In rural nursery establishments, however, the supply of and demand for places tends to be more equally balanced and a greater number of families accessing those places are required to pay for provision.

3. Stirling Council Concessionary Framework

In 2006, Stirling Council adopted a Concessionary Framework. This constitutes a set of guidelines and practices, supporting the strategic aims of the Council and intended to help Council services to ensure that their approach to concessions is consistent, integrated and efficient. The framework provides general guidance - with an over-riding focus on “the customer” and, as far as possible, a single assessment process for eligibility to concessions.

Concessions are an important element of social inclusion programmes and eligibility is generally specific to groups of users – eg. Children, students, people aged 60+. The framework proposes that the level of concession (between 0% and 100%) offered will be decided by Service Committees, in line with the budget setting process. Committees will also be required to determine where the qualifying criteria should apply.

The major intention of the Concessionary Framework is to assist individuals and families on low incomes and from disadvantaged groups to participate in aspects of family, community, economic, educational and civic life by making them more affordable and accessible.

3.1 Families on a Low Income

The current Nursery Charging Policy makes nursery services affordable and accessible for families on a low income by exempting them from paying for enhanced provision. (100% concessionary rate)

The qualifying criteria used are those applied when assessing eligibility for Free School Meals -

ie. Families in receipt of Income Support / Income-based Jobseekers Allowance; Families receiving Child Tax Credit are eligible but NOT those receiving the childcare element of Working Tax Credit as the purpose of WTC relates directly to assisting families in meeting childcare costs. A verification procedure involving nursery staff checking evidence in the form of awards letters etc. is already in place.

It is proposed in the Concessionary Framework however, that wherever possible, Council Tax should be used as the primary source for verifying eligibility.

This information is held within the Council and a rigorous checking process already takes place. It can, therefore, be verified that someone is receiving Council Tax Benefit – which would automatically qualify them for other Council concessions within the Low Income category.

Council Tax data is covered by the Data Protection Act but sharing personal information may be possible if customer consent is given.

N:\DEMSUPP\NewDecisions\Executive\Reports\EX20070904Item06NurseyChargingPolicy.doc In order to bring the Nursery Charging Policy fully in line with the Concessionary Framework, the system for verifying eligibility for exemption from nursery charges would require to be expanded to include the consideration of Council Tax Benefit – particularly if this can be checked in-house and thus be less onerous for parents in terms of providing evidence of low income.

The existing verification by documents process, however, would also need to remain in place as where customer consent is not given for the sharing of personal information, a further application / verification process needs to be undertaken which includes the production of qualifying corroborating documentation.

This effectively is the system already in place in the low income exemptions category within the Nursery Charging Policy.

The Framework suggests that over time a single corporate application and assessment process will evolve that will encompass a centralised means of applying concessions but no timescale is set against that vision.

3.2 Referred Children: Child Protection Referrals Education Psychology Referrals (Children Under 3)

The current Nursery Charging Policy makes nursery services affordable and accessible for families whose child’s name is recorded in the Child Protection register by exempting them from paying for enhanced provision. (100% concessionary rate)

The exemption from charging of children referred for extended nursery placements as a result of their name being placed on the CP register does not fall within the scope of the Concessionary Framework. In such instances, the place is being provided at the behest of the Authority – rather than being sought by choice by the parent. Such places, therefore, should continue to be offered free of charge to the family.

Where a child under 3 has been formally referred for a nursery place by Children’s Services Educational Psychology, the family is exempted from paying for the first 12½ hours of nursery provision for their child. (100% concessionary rate for up to 12½ hours)

As with CP referral, referrals from Educational Psychology are arguably also being provided at the behest of the Authority and as such should continue to be offered free of charge to the family.

3.3 Reduction Categories / Concessionary Allocations for Under 3’s

The more discretionary concessionary categories - offering 50% reduced rates and/or up to 12½hrs free for some under 3’s - as currently set out within the Nursery Charging Policy, are either less directly related to family income or are not income related at all.

The 50% concessionary rate applied in relation to the main earner in a family being in full-time education or training is income related and qualifying evidence is required in line with the procedure for low income families. Consideration should be given, however, to whether students / trainees are a disadvantaged group and thus should remain a priority for concessions – and whether that concessionary rate is set at the correct level.

The 50% concessionary rate applied in relation to having 2 or more children attending the nursery is also income related in intention, however, currently no qualifying evidence in relation to income is required and arguably the costs can be

N:\DEMSUPP\NewDecisions\Executive\Reports\EX20070904Item06NurseyChargingPolicy.doc more easily met by some families than by others. In order to comply with the Concessionary Framework, the same kind of qualifying measures in terms of income would need to be applied and an appropriate concessionary rate set.

The concessionary allocation of 12½ hours free provision for under 3’s whose families meet either of the above 50% concessionary categories should also be given further consideration in order to bring the charging policy in line with the corporate framework.

The concessionary allocation of 12½ hours free provision for under 3’s whose families are resident in either an area of rural isolation or a designated area of need is NOT related to income and does not comply with the Concessionary Framework. This has become problematic in relation to designated areas of need as over time, since the introduction of this category in 1999, the demography of the designated areas of need has changed considerably. In the Cornton area, for example, significant private house-build has taken place and recent research carried out by the Council’s in-house Research Team indicates that household income now exceeds the Council average in some parts of Cornton. The structure of the current Nursery Charging Policy, however, means that ALL Cornton resident householders are considered to meet the eligibility criteria and can receive 12½ hours of free nursery provision for children under 3. The same issue is likely to arise in Raploch, Cultenhove and the Eastern Villages. The restructuring of this concessionary allocation to offer free provision only in relation to those families meeting the qualifying income criteria would bring the Nursery Charging Policy in line with the corporate Concessionary framework.

4. Comparison with the Private Sector

The current charging rates within the Council’s Nursery Charging Policy are set at £2.35 per hour - or £1.17 per hour where the 50% reduced rate is applied.

None of the local private sector nursery providers charge an hourly rate to parents, operating generally instead in half day (approx 5 hours) or full day (approx. 10 hours) sessions. A comparative table below indicates the cost of 5 / 10 hours of Council nursery provision, mapped against the cost of the cheapest provider, the most expensive provider and the average provider charge in the private sector.

Stirling Council Private – Low Private – High Private - Average 5hrs 10hrs 5hrs 10hrs 5hrs 10hrs 5hrs 10hrs 11.75 23.50 16.00 30.00 20.50 37.00 18.25 33.50

When private sector charges are broken down to an hourly rate they range from £2.95 per hour to £4.01 per hour – with an average rate of £3.48 per hour.

N:\DEMSUPP\NewDecisions\Executive\Reports\EX20070904Item06NurseyChargingPolicy.doc 5. Recommendations

5.1 Payment Structure

Currently, families are only charged for the hours their child actually attends at nursery rather than the hours allocated to them. (i.e. if a family is allocated a place from 8.30am until 5.30pm (9 hours) but collect their child at 4.30pm instead, they only pay for 8 hours attendance).

No charge is applied for any weeks that the child is on holiday and not attending nursery and no limit is set on the number of holiday weeks per year.

It is recommended that from session 2007/08, families are charged for the full hours allocated to their child with an allowance of 4 weeks per year to be considered as “holiday” weeks when the family would not be charged. Similarly, if a child was absent due to long- term illness (e.g. over 2 weeks), no charge would be applied.

No charges would be applied over the 2 annual fixed closure weeks (Easter & Christmas) or public holidays when the nursery service was unavailable.

This would mean that charges would apply over 45 weeks of the year once the 2 fixed nursery closure weeks (Easter and Christmas), 1 week for other public holiday closures and 4 holiday weeks were subtracted.

Adopting this model would bring the Council Nursery Charging Policy in line with both private sector providers and other local authority areas.

5.2 Fee Rate

The Council charging rate is reviewed annually and increased in line with inflation. It is recommended that for session 2007/2008 a higher than inflation increase is implemented in order to bring charges more in line with other providers.

The impact on families of increasing the Council charging rate to match with even the lowest cost private sector provision, however, would be significant. On a weekly basis it would potentially increase the cost to families with one child attending full-time by £19.50 – or an additional £78.00 per month. It is likely that this would make the provision too expensive for some families.

Additionally, such an increase must be offset against a possible drop in levels of take-up as most private sector providers offer longer opening hours (8am to 6pm v. 8.30am to 5.30pm) than Council enhanced provision and do not have a policy of closing for in-service days or any other regular closures throughout the year. This can create the perception that they offer a more flexible service than the Council which may be more attractive to parents.

5.3 Holiday Rate

It is recommended that the 50% concessionary holiday fee rate is removed and the impact on levels of take-up during the holiday periods monitored. The current reduction in rate applied to all children is not in line with the principles behind the Concessionary Framework.

N:\DEMSUPP\NewDecisions\Executive\Reports\EX20070904Item06NurseyChargingPolicy.doc 5.4 Concessionary Rates

It is recommended the current levels of concession offered to:

¾ low income families – 100% ¾ Students / trainees - 50%

are reviewed. Both of these groups fall within the priority groups listed in the Concessionary Framework and the level of concession offered has remained the same since the introduction of the policy in 1999.

It may be helpful to note that under the current policy, families in receipt of the childcare element of the Working Families Tax Credit and students who receive a childcare allowance as part of any funding award, are expected to pay for enhanced provision.

It is recommended that the 50% reduction offered on the fees of the eldest child to families with more than 1 child attending the nursery should be removed UNLESS the family also meets the criteria set out for assessing low income.

If the low income concessionary rate remains at 100%, then families with more than 1 child attending who also met the low income criteria, would pay nothing. If the low income concessionary rate is reviewed and set at less than 100%, then families with more than 1 child attending who also met the low income criteria would pay 50% of whatever the revised rate is set at on the fees of the eldest child only.

5.5 Concessionary Allocation for Under 3’s

It is recommended that the automatic allocation of 12½ hours of free provision to children under 3 who are resident in an area of rural isolation or a designated urban area of need is removed in order to ensure an equitable position across the Council area. The current policy is not in line with the corporate Concessionary Framework.

If the Concessionary Framework is applied any vulnerable children in these areas are likely to still qualify for provision at a concessionary rate.

5.6 Income Verification Systems

It is recommended that the potential to expand the current document based income verification system to include in-house verification of receipt of Council tax benefit, be explored. If feasible to progress, this would require that permission to access the data was sought from parents under the Data Protection Act.

The application of the above recommendations would bring the Council Nursery Charging Policy fully in line with the corporate Concessionary Framework.

N:\DEMSUPP\NewDecisions\Executive\Reports\EX20070904Item06NurseyChargingPolicy.doc APPENDIX C Examples of Nursery Charges

Based on £2.42 per hour from August 2007

Total Avg. 23hr Free Cost Per Weekly Monthly Tax Actual Income childcare* Entitlement Hour Charge 45 Charge Credits *** Cost 12.5 hrs - weeks** 3&4 yr olds

Example 1 Single Parent with three children – working 35hrs minimum wage @ £5.35 298.49 23 12.50 2.42 29.44 117.76 94.21 23.55 Example 1A Single Parent with three children – Income Support 123.03 23 12.50 2.42 29.44 Exemption 00 Example 2 Single Parent with three children – working 35hrs Annual Salary £21200 434.50 23 12.50 2.42 29.44 117.76 89.5 28.26 Example 2A Single Parent with three children – Incapacity Benefit Short term 125.23 23 12.50 2.42 29.44 Exemption 00 Example 3 Couple three children – working 35hrs minimum wage @ £5.35 463.49 23 12.50 2.42 29.44 117.76 70.66 47.1 Example 3A Couple One Child – Income Support 227.38 23 12.50 2.42 29.44 Exemption 00 Example 4 Couple Three children – Joint income £46,000 721.23 23 12.50 2.42 29.44 117.76 8.24 109.52 Example 4A Couple One Child – Incapacity Benefit 206.58 23 12.50 2.42 29.44 Exemption 00

* Average number of hours of nursery provision accessed by parents seeking extended hours * *Assumes 39 weeks at 10.5 hrs of provision (12.5 hrs provided free), plus 6 weeks at 23 hrs of provision - average charge over 45 weeks * **Estimated using Inland Revenue Online Calculator

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