Could claim benefits...but choose not to! Why?

GobbledyGook

tooldle wrote: »

Don't forget the employers NI and any pension contributions, partiuarly if they employ early years teachers. Then there are all the expenses to consider, cost of food, materials etc, possible vehicle to maintain for pick ups and drop off, insurances,heating, lighting, registration costs. It is profitible otherwise no one would do it, but not the cash cow that people think.

Don't get me wrong I know they have expenses, but when you look at the money they are taking in there is very, very good money in it - especially for the couples/families/businesses who own 3 or 4 which seems to be quite common.

melly1980

GobbledyGook wrote: »

Some nurseries may not be making loads, but lots are.

The one near me charges as follows -

£170 a week for Babies - 9 babies = £1530 per week
£160 a week for 2-3 years - 12 of = £1920 per week
£160 per week for 3-5 - 60 of = £9600 per week

That's £678600 per year which is pretty much guaranteed as they only accept children on a full time basis and have a waiting list due to a shortage of places locally.

Staff wise they have 1 room "manager" who is a qualified nursery nurse per room then staff they call "childcare practitioners" who attend college 1 day per week.

So they have 4 room managers earning aorund £20k = £80,000
Baby room has 3 other young staff on min wage, Toddler room has 3 staff on min wage and the pre-school rooms have 3 staff on min wage each. I'm not sure of a full-time min wage exactly? Say £12,000 each? - 12 staff on 12k = £144,000

Above that they have 2 office staff on around £14,000 each (I know their wages as they are advertising atm). = £28000. They have an overall Nursery Manager that is on around £25000/30000.

So a wage total of somewhere around £282,000. Leaving £396600 to take off rates and other costs.

Also I'm not sure how much they charge, but the same place offers breakfast club, after-school care, holiday care, the awkward bit when children start school but are only in half a day and offer early starts and late finishes.

They also charge parents for tonnes of extras - art materials, music time, gym time etc. Obviously not all are making the kind of money this one is, but there is at least 4 locally who are charging similar amounts. This one even let go our nanny when she became fully qualified because they only 'need' 1 fully qualified member of staff per room and don't need the extras.

If those numers of kids are there then it is a huge nursery. A huge nursery = huge building (as you need a set square meterage per kid) = huge lease / rent or huge mortgage. - what do you estimate this to be? I'd hazard a guess at a few 10's of thousands per year

Huge number of kids = huge insurance cost - how much.

Nurseries, without being sexist, employ mostly women. What cost for the obligatory pregancies and required cover as a result.

What cost to heat this huge building. What cost to keep it within various regs. What cost to feed the kids (somewhere of that size surely has a cook plus materials) What cost for toys / resources because with so many kids plenty of stuff will get broke / need replacing.

a quote from a nursery buying guide

Chief Executive of the National Day Nursery Association (NDNA), the representative body for day nurseries in the UK, explains: “Nurseries are not for people who want to see a huge profit as financial margins are very tight.

and another

The NDNA estimates that the average capital cost per nursery place is £15k.

tooldle

I'm not saying they don't make money, just that there are not the massive profits that people assume. My daughter left nursery some years ago, but when she was there the ratio in the baby room was one staff per two babies, tweenies was one to three and toddlers one to four. They have to have adequate cover at all times, including covering those that are on holiday, so the actual numbers of staff will exceed these ratios. I would imagine that childminders may make more profit per head, having no additional premises to pay for and maintain, plus no additional staff costs. That nursery also had kitchen staff and several managers. As it was a group of nurseries there was also a central office. Presumably all would aim to run with a waiting list, rather than overstaffing and having expensive gaps without clients.

GobbledyGook

Like I've said already it might not be the case in all nurseries, but some (like the one I mentioned) are coining it in.

I know this from actual conversations with the owner. I've referred to it on here before, but she refers to Tax Credits as her pension pot. The introduction of tax credits has dramatically increased her profits and is the reason they have expanded (both in size of building and number of nurseries).

Also in terms of costs to the nurseries that will vary depending on what the nursery offered. The nursery my daughters attended was expensive, but everything was included - food, good quality toys, good books, art supplies, trips, music lessons, dance classes, gym lessons, you name it they had it. This particular nursery I've mentioned is more typical of the nurseries locally in that it charges for EVERYTHING as an extra. Parents have to pay extra for food, art supplies (including each child has to pay for aprons etc), gym lessons (despite them having a room they use and it being the same staff), music and dance lessons (taught by staff who went on a 2 day course). You name it, this nursery charges for it. The basic charge basically covers the staff. Parents pay extra for everything else.

Some nurseries will be making an ok profit, however some are using tax credits as a cash cow.

Although the nurseries who charge for everything could find themselves caught out if they list all charges separately and one of their parents gets a check from tax credits as tc's only pay for basic childcare not all the extras.

tooldle

Two ways to look at it I guess, it could be as simple as more customers through the door because tax credits contributing to the costs makes it more worth while for people to work. I have never been eligible so might be wrong here, but believe the level to be capped which would surely limit what they are able to charge. £1000 a month where I am is about the going rate for a full timer. That doesn't seem so bad to me as we were paying over £600 some 7-8 years ago.

anniemf2508

My husband doesn't work and doesn't claim anything....due to these reasons
1. When he did try to claim once, the hassle of it just wasn't worth it.
2. If i end up taking on any overtime, it cancels out the JSA anyway.
3. He sometimes does freelance work from home, which again would cancel out any JSA.

The reason he stays home is i work early morning shifts at work (i start at 6am). so he is needed home to do school runs etc.