Memorandum submitted by Heathside Preparatory School


We believe that the wording of the draft Code of Practice and the proposed Single Funding Formula for the NEF are well-intended but financially unworkable. Most private and independent settings cannot deliver 15 free hours per week and remain sustainable, without the clear opportunity to charge the majority of parents for additional fees to reflect the true costs of running a PVI in Camden.


Private, Voluntary and Independent providers make up for the majority of nursery provision in the London Borough of Camden. All the schools have features recognised as outstanding by Ofsted. These schools represent over 1500 children aged 3 and 4. We each have unique qualities and diverse status.

Nursery provision within any borough is very diverse. This is due to the variations in ownership, status, premises, staff qualifications, staff ratios, diversity of population, Special Needs, faith, opening times, hours and flexibility and not least salaries. PVIs pride themselves in offering quality education which is demonstrated by the high staff ratios, qualifications of staff, longevity of service and managers who are passionate about their work and Early Childhood Education and committed to ongoing professional development for themselves and their staff. This diversity ensures parental choice but only if the provision is viable, which it currently is. However, the proposals have the following difficulties:


The stipulation that places that are free from the point of entry may not have conditions, means that there would be uncertainty about financial viability

Including voluntary settings in the costing surveys being carried out by local authorities distorts the true costs for private nurseries. They should be counted separately, because they typically have lower operating costs and fewer qualified staff.

The proposed funding will not cover costs for many settings, particularly those of a high quality which employ well-qualified staff and/or have better adult/child staff ratios than the statutory requirement.

The proposed funding is based on a formula that gives equitability per capita. The reality is that PVIs have additional costs to the maintained sector and do not receive other funding streams from the borough to meet these costs.

The proposed hourly rate of 4 per hour per child does not reflect the true cost of running a PVI setting in the Borough, which can be more than twice that amount when including rent and rates, taxes and additional quality incentives as mentioned above in the staffing of the PVI's. For example, to have a flat rate across the board for all boroughs when the cost of rent and rates changes drastically over them is not viable.

The inability to raise a profit within the PVI sector will mean not being able to reinvest in larger nursery accommodation, thus hindering the ability to address the shortage of nursery places already.

Additional funding for a qualified manager, flexibility, SEN and deprivation would still not meet the costs for most PVIs

Additional 'transitional and supplementary' funding which is not clearly outlined and that would only be a one off, 'band-aid' solution, will not take into account the longterm stability of the PVI

PVIs are being forced into a situation of withdrawing from their partnership with the borough which they value

PVIs that opt out of the NEF will lose funding, training and borough support, including special needs

Parents will be faced with increased fees of between 17%-50% and consequently may be forced to withdraw their children

PVIs that stay in the Partnership will close if their costs are not met

The borough will either way have insufficient places to meet their obligation of a place for every three and four year old in the borough

Choices for parents will also be limited

Closures will be inevitable resulting in redundancies amongst our staff and a failure to provide a stable environment for the children of working parents


Heathside Preparatory School and many other PVI's within Camden offer the nursery places as part of an overall education, with almost all continuing on to reception and onwards up to Y6 at Heathside within the stability of the same community of fellow students, quality teachers and settings. If parents are forced to opt out to the new 'flexible' nursery scheme, one of the primary incentives of the families to choose such quality PVI's will be greatly hindered affecting the school overall but especially the needs of the student.


DCSF has stated that Local Authorities are not obliged to follow the guidance regarding Free Entitlement, but should only depart from it if they have good reason. Surely lack of places if the borough insists on disregarding the financial implications for PVIs, is a good reason?

There needs to be a clause added to the Code of Practice that financial viability is a good reason

If the per capita rate set by the Local Authority is driven by available funds, then it is in everybody's interests for parents to be allowed to pay towards PVIs of their choice to keep them viable.


Morale is very low at this time due to the impending changes and their threat to high quality provision for the children as well as viability, not to mention the constant government intervention and increasing bureaucracy. We would welcome your intervention on our behalf, and on behalf of the children and families that we serve.


December 2009