In the third episode of the Early Bloom Podcast, we welcome Tricia Wellings who has over 25 years of experience running several nursery settings and is known for her work at MBK Group, where they support nurseries with consultancy, training, Ofsted, and safeguarding.
Are you a busy Day Nursery Owner? Are you struggling to understand the new funding changes happening this April in the UK? Then this is the podcast for you!
View transcript (generated automatically)
0:04
Today we have a renowned guest in the realm of early years funding.
0:08
Trisha Wellings has 25 years of experience running a successful nursery setting and is now known for her work at MBK Group, which they support nursery settings with funding Ofsted training, consultancy and safeguarding.
0:21
Tricia, it’s a pleasure to have you here today.
0:23
I’d love to kick the segment off with getting to know more your work experience, background and the work that you’re doing today.
0:30
Lovely.
0:30
Thanks ever so much for inviting me onto your podcast.
0:33
I’m really excited to be here.
0:36
So I, as you said, I’ve, I’ve been in the early years sector for 25 years, started off running my own nursery back in 1999 and now have a group of eight nurseries.
0:46
About 10 years ago, we became very disillusioned with some of the training that was available for nursery settings, for our own settings.
0:54
So we decided to establish our own training and consultancy company that’s grown over the last 10 years.
1:00
And of course the area of funding has become one where a lot of settings don’t quite understand.
1:07
So we’ve naturally progressed some of our training and consultancy work into the area of early years funding, right.
1:15
When it comes to funding, I feel like that’s kind of an ongoing topic where, you know, people are often like confused as to where to allocate funding and consumables.
1:23
I’m, I follow a lot of these like nursery groups on Facebook and I feel like it’s a constant challenge for people.
1:29
So that’s really great that you know, you’ve kind of stepped in from having so many years of experience and running your own setting to now kind of helping aid with consultancy and funding.
1:39
Now when it comes to the changes that are happening with funding here in April, do you feel feel that nursery settings are or nursery owners are prepared for the changes that are happening?
1:49
And if they’re not, what advice do you have for them?
1:53
So I think that there are some that will be more prepared than others.
1:58
It’s difficult sometimes to prepare when actually there’s quite a few local authorities that haven’t yet even told us the rates that we might be getting for the children, the the newly funded children, the 2 year olds.
2:10
So that’s a bit of a stumbling block for some of them.
2:14
I think the funding itself is, is is a very complicated area, very complex.
2:19
And it can be difficult to when, when a change comes in, when something new happens, how do, how are we going to do this?
2:26
How are we going to do it differently?
2:29
The way I like to try and help and support settings is to, to take everything back to basics.
2:35
Let’s look at your, your business model.
2:37
How are you actually delivering your services to customers in what hours?
2:42
And then how can we get a funding model to work with that one that is going to ensure you can maintain your profitability and also make sure that you can provide a good service for families as well, right?
2:56
Which is which is another thing, right?
2:58
When it comes to profitability, it’s that’s a big question mark, right, to make sure that you have the right systems in place to to ensure that.
3:06
Now back to like the changes in funding, are these changes only, are they in some parts of the UK or only is it throughout the UK or only in some parts of the UK?
3:18
So at the moment the new 2 year old funding is being rolled out in England.
3:25
There are plans for it to be rolled out across a wider area of the UK, but but it’s the, it’s the English sector that we’re focusing on at the moment.
3:35
Yes, right.
3:38
And when, when it comes to funding, how come like it’s not very clear as to what changes will be made.
3:49
Why is it that I guess some local authorities make it public and others make it private again, I feel like maybe it’s not giving enough time for nursery settings to prepare.
4:00
Yes, yes, I think, I think the mechanism of the way that the funding works is it it it’s announced by central government and they potentially don’t give the information out quickly enough as to how it’s all going to work to the local authorities.
4:15
So they’re kind of sort of stuck in the middle there between them and then us, the providers who are sort of wanting to know well, how is this going to work?
4:23
What is going to happen?
4:24
So we’ve been drip fed information along the way.
4:28
Some local authorities are very good, they’ve done consultations with their their providers in their area.
4:35
Others have been a bit more sort of closed and they’ve maybe not not been quite as open as to what is going to be happening in their area.
4:43
But I think the fact that we’re dealing with 150 different local authorities and everyone of them potentially has a different mechanism for the, for the way they communicate with their providers, the way they provide the funding doesn’t really help the matter overall.
4:57
But I think for providers, it’s about knowing your local authority, knowing where to get that information.
5:04
If you’re providing services in the area, once they’ve got the information, they should be sharing it, you know, with yourselves, with the providers in the area.
5:13
For people to find out information outside of their own area, it might be a bit more difficult.
5:19
Sometimes it’s openly available on on websites, the funding rates and the ways that they monitor and and manage the funding.
5:29
Other times it’s you actually have to be logged in in into some sort of online portal to get that information.
5:36
So you can understand why providers are quite confused and especially if you’re a provider and you’re delivering services in one area and you open a new nursery in a different area, you might find a completely different mechanism there.
5:52
And that can that can be really confusing to have to navigate a completely different way of doing things, right.
5:59
And I know we spoke about this before sitting here.
6:03
Now I kind of want you to go back through how you mentioned you gave the example of like Birmingham and how some funding might be allocated here, but then to source information it how, how is it that you explained that to me earlier back to like you gave the example of Wandsworth and Birmingham.
6:25
Do you remember?
6:26
Well, that’s OK.
6:28
So, so because we have different types of local authorities, right, then for example, you might have a very small local authority in London, you tend to have a lot of smaller local authorities and they’re probably quite accessible to the providers in their area.
6:48
But then you get very large local authorities like Birmingham who don’t have a separate borough for each of their funding streams.
7:01
So it’s a bit harder to source that information.
7:03
So, so, yeah, so if you needed to get some information out of Birmingham, for example, you send them an e-mail because there’s very rarely a phone number and, and the response comes back, we’ll get back to you within five days.
7:15
So sometimes that that can obviously, you know, hold you in your tracks as to well, I need to plan for this.
7:20
I need to be able to get some information.
7:23
But, but it it is just because all of the authorities run their funding streams slightly differently.
7:30
The the government ultimately gives out the funding to the local authority.
7:35
So and those figures are publicly available.
7:39
The amount of money that goes to each local authority that varies across the country and it the metrics that they use to actually calculate that is also quite complex.
7:51
They bring in things like business rates using a system that is actually no longer in place.
7:57
So the the the way each local authority gets a different amount of funding from the government.
8:03
Then when the funding arise to the local authority, they then have their own metrics that they will look at as to how to distribute the funding.
8:11
Now there are national guidelines that they have to implement and a funding formula that they have to follow, but ultimately there are segments of that that they can choose, which again would be different in one area to another.
8:25
So for example, some areas in their funding, in their funding remit, they will have a a quality supplement.
8:35
So they will put in some extra money, pence per hour to settings that maybe have got a qualified teacher, for example, whereas other local authorities won’t use that metric and they’ll just spread it out evenly across all settings.
8:52
There are metrics that they have to do like for deprivation and for special needs children.
8:58
But but those are the reasons why funding rates come out very differently because what comes from the government is different.
9:06
And then what the local authority has got to spread out to the providers is also different.
9:14
They are allowed to take a 5% cut as well for, to cover their own sort of running costs as well.
9:21
Some local authorities are very good and they don’t actually take the full amount because they don’t need it, whereas others are a little bit more starved of cash.
9:30
So they’ll see the opportunity to support their overheads basically.
9:36
Well, so I, I see now why this could all be a bit confusing and challenging at the same time.
9:42
So let’s say if, what advice would you have for someone that’s opening up their nursery setting kind of new to this realm of, you know, what it what it takes to set one up?
9:53
What are regarding funding?
9:56
Some things you should be aware of or consider.
9:58
Yeah, actually I, I took a phone call the, the other day from a, a client who’s opening up a new nursery this month.
10:05
Is it their first nursery?
10:06
It’s their first nursery.
10:07
And they, they, they enquired to us via our website with I, I, I don’t know whether I should be offering funding or not.
10:16
And, and so my first thought was, well, why wouldn’t you?
10:18
This is a, a support for families.
10:20
This makes childcare more affordable for families.
10:24
But I think they’re a little bit confused, scared about what this might mean for their profitability.
10:31
Well, if we offer funding, you know, there’s a lot of stories that if ioffer funded places, I can’t make a profit, for example.
10:40
And, and I think, well, thinking about the advice, it’s first of all, find someone who understands funding.
10:49
The local authority will be able to give you a certain amount of information.
10:54
They’ll be following the letter of the law and the legislation that funding falls under is, you know, quite well, it’s specific, but it’s open to interpretation.
11:06
So I support people in interpreting the legislation in a way that will help them retain the profit that they need to in order to run their business.
11:17
Ultimately, as earlier settings, you know, we are all businesses and we do need to be able to, to make a profit even on ours that the government is sort of fixing and capping the the amount of money that they’re giving us for.
11:31
So for those new nurseries, I would say, you know, read, learn, understand everything that you can about the legislation and then look at how you can use that and model that and build it into your existing pricing structure so that it works for you and not against you.
11:50
Well, hopefully this isn’t getting too political.
11:52
And so a colleague of mine brought up that if there is an election or when there’s an election, do you think anything funding or childcare funding related will change?
12:03
Well, I think if we look historically at what’s happened when we’ve had potentially a change of government, for example, that the the outgoing government, if they’ve input certain mechanisms such as funding for parents and things that it doesn’t actually really change.
12:20
It might be tweaked.
12:22
There might be minor modifications.
12:25
But ultimately I think this legislation and this funding is in and it’s here to stay.
12:30
And whatever government comes in at the next election, then I don’t think they’re going to remove it.
12:35
It is going to be popular with parents.
12:38
Parents are the ones that ultimately vote in our governments.
12:41
So I think any government that actually tried to change this or go back there would be, you know, a bit of an uproar.
12:48
So do you think that there’s a moral obligation?
12:51
And also, can nurseries be forced to provide funding?
12:57
Well, I think the legislation’s clear that a nursery provider does not have to provide the funded hours.
13:05
It’s entirely their choice.
13:07
They can choose to sign up with the local authority to accept, to apply for and accept the funding through them for children that are attending, but there’s no legal obligation for them to do so.
13:21
However, you know, as I indicated earlier, I think providing they can get the model to work, then why wouldn’t you actually, you know, morally support parents with their sort of what is, can be quite an expensive journey, you know, bringing up their children.
13:40
And it’s, and it’s that’s the side that, you know, the quandary, as I say, the phone call I had earlier this week was, was very much that, well, I don’t want it to cost me money to deliver the funded hours.
13:54
And it shouldn’t be like that.
13:56
The, the new funding that’s coming in is, is more highly funded than the existing funding for three and four year olds.
14:05
So the the funding for the 2 year olds and for the babies coming along in September is going to be fairly well funded.
14:14
That dynamic will only last for probably a few years because as minimum wage goes up at a greater percentage than funding rates will go up.
14:24
We’ll soon find ourselves in a position where potentially the funding that the government is giving us is again, not covering the costs of delivering the service.
14:34
So, so I think ultimately if you can find the right business model, then you are almost morally obligated to deliver this to support your community, your families.
14:48
And also it’s better for business, you know, if you don’t take funded children and nearly all of our children will be funded once the, the new funding does come in, then you’re, you’re going to be in competition with people who are delivering the funded hours and you are naturally going to be quite an expensive, you know, delivering quite an expensive product to, to your families.
15:13
So, you know, I would encourage everybody to take on the funded hours, but get, get the modelling right.
15:20
That’s the important part.
15:21
Well, it sounds like, you know, it’s important then to understand funding, right?
15:27
And I do agree.
15:28
I mean, it’s it’s difficult and challenging for parents to not have that support from the government.
15:33
So, I mean, I don’t know many families out there that could go, you know, months and months without working.
15:40
So, yeah, I’m, well, that’s good.
15:42
That’s positive that there is some sort of change to look forward to.
15:45
But again, you know, depending on, you know, how we do economically, then perhaps, you know, we’ll see positive changes in funding and, and, you know, hopefully there’s no recession anytime soon.
16:00
But yeah, yeah, great.
16:01
And I think it’s, it’s important because there will be some settings who are struggling at the moment.
16:07
They’ll be struggling in different ways.
16:09
They’ll be struggling because they don’t know how to make the current funding work and might see that the new funding is going to make the problem worse.
16:18
But there’ll also be settings that are struggling to understand the dynamic of this new funding.
16:24
And I’ve, I like to see it as an opportunity rather than another problem on top of the, the, the funding problems that, that we’ve had for many years, because it’s an opportunity to support families.
16:38
It’s an opportunity to further fill your nursery if you’re not full at the moment.
16:44
And, and as I say, the, the key to this is, is good understanding of the legislation, good understanding of what you are allowed to do and working with your local authority.
16:58
Rather than seeing them as, because they are our auditors, they come in and they will audit what we’re doing.
17:04
But by working with them and making the your business, modelling, delivering the funding, working with them can you know, make you a much better provision overall.
17:16
Sounds like if you have a nursery setting you have to keep up with your homework.
17:21
Definitely yes.
17:23
Yes, it is an ever changing field.
17:26
So for nurseries that are struggling and might, it might be in a position where they don’t look forward to the changes happening in in in April.
17:35
Do you have any advice as far as how so, how they could look at funding not as a loss?
17:41
OK, yeah, well, and the legislation is clear on this.
17:45
We are allowed to charge for, I think the wording is something like additional services, additional hours, consumables.
17:53
And they, they give examples like food and nappies and wipes and things.
17:57
So what I always encourage nurseries to think about is what it is that they’re delivering.
18:03
They are being asked to deliver some childcare elements of the earliest foundation stage on behalf of the government.
18:10
But the government isn’t expecting to pay for everything that they’re doing.
18:14
So for example, if they’re creating, I don’t know, a house flower pots with a seed in and growing a sunflower and giving that to to mums on Mother’s Day, well the government’s not expecting to pay for that.
18:27
So there are many things that they’re doing that they can legitimately charge extra for.
18:32
And the key to this is packaging that up into a session offer for families.
18:39
So you might, for example, say the funding is 15 hours, it’s only for 38 weeks.
18:47
Many nurseries are open for 51 weeks.
18:50
So actually we stretch our hours and we that ends up to be just over 11 hours a week.
18:56
So if you had a 2 day package or a three day package, here’s three days, you’ll get 11 hours funded.
19:03
You’ll get the rest of the hours will be need to be paid for and also you’ll get all your food.
19:10
You’ll get all these additional services that we do like providing for Mother’s Day, Father’s Day, Christmas gifts, Easter gifts, all of those things that we choose to do that the government’s not expecting to pay for.
19:23
And that’s your price for this package.
19:27
You might, for example, have another family that comes along and says, well, we only want to do our funded hours.
19:33
So we’ll, we only deliver it as 11 hours or just over 11 hours.
19:38
That doesn’t really fit into any of our packages.
19:41
So we might want to say, well, you can do one day at 10 hours and we won’t use the other hour.
19:49
That way they can have their funded hours, but the setting can also they’ll get the money for the funding.
19:55
They won’t be able to charge any additional hours, but they’re quite legitimately able to offer a.
20:03
Additional services as described and their food and everything like that.
20:07
So they can impose a charge on parents.
20:12
Now the the legislation has recently changed.
20:15
It used to say that these charges had to be voluntary for parents.
20:19
And actually that’s a key point.
20:21
It now says there have to be alternative options available for parents.
20:26
So your alternative option might be, well, we can’t give you that full day as a 10 hour day, but we can offer you a couple of afternoons spaces that maybe haven’t been filled.
20:38
And so you can come to us.
20:40
That is our alternative to you paying any additional charges.
20:44
You can come completely free, but just for these sessions here.
20:48
So if nurses construct their packages, then they can make sure that they have enough packages that are what I will say, profitable.
20:59
So they’re making up extra hours and things and charging parents a few packages that are maybe just charging the extra consumables on and then just one or two packages where they can come completely free at the point of delivery.
21:13
Thank you so much for sharing this valuable information.
21:16
And I know it’s going to be very useful for many nurseries out there that are either struggling or haven’t thought of, you know, ways to package to set these packages.
21:26
Thank you for being here on this podcast.
21:29
And honestly, I hope to have you back.
21:31
It’s been wonderful.
21:32
Thank you ever so much for the for the invite.
21:34
And good luck to everybody out there tackling the new funding in April.
21:39
And Trisha, if anyone wants to get in touch with you, what how’s the best way to, to reach you?
21:45
So the best way to reach us is probably through our website mbkgroup.co.uk.
21:51
And in there you can send us a contact or find out our e-mail details and things.
21:57
Perfect.
21:57
Thank you so much.
