Last reviewed 5 February 2021

The Local Government and Social Care Ombudsman has called for councils to ensure greater transparency over free early years places.

The Ombudsman made an investigation following a complaint raised by a parent who said he was being charged an extra £1.08 an hour for 30 hours of funded childcare at Kiddi Caru Day Nursery in Leicestershire. Over a year the family were found to have been overcharged by around £900.

Currently all three and four-year-olds in England are entitled to 15 hours a week of funded childcare, rising to 30 hours for children of eligible working parents.

Department for Education guidance for local authorities states that funded places must be delivered completely free of charge and that councils should ensure that providers do not charge parents top-up fees, which is the difference between a provider’s normal charge to parents and the funding they receive from the local authority to deliver free places. Providers can charge for meals and snacks, and consumables such as nappies or sun cream, as part of a free entitlement place, although these charges must be voluntary.

However, the Ombudsman found that Kiddi Caru nursery in Market Harborough was charging parents the difference between the amount they were being paid by Leicestershire County Council for the places and the amount they charged private customers.

The Ombudsman’s investigation found Leicestershire County Council did not have sufficient oversight of the way the nursery charged parents when administering the free early years places. It had not identified any problems with the invoices or charges despite auditing the nursery chain, and it had failed to work with the nursery to ensure its invoices were clear, transparent and itemised.

The Ombudsman said that the local authority should apologise to the parent and ensure that the family, and any other parents who have been charged a top-up fee by the nursery, receive their money back.

Michael King, Local Government and Social Care Ombudsman, said:

“While I acknowledge local authorities - and the early years sector - are struggling financially, the Government's intentions have always been that these places are provided free of charge to parents, and it is up to local authorities to administer them accordingly.”

“Guidance states that councils should work with providers to ensure invoices are clear, transparent and itemised. Free must mean free, but in this case it was not possible for the man to see how the invoice was calculated or whether his daughter was receiving her entitlement free of charge.”

“We are concerned that local authorities may not be delivering on the Government’s pledge to parents, so I would urge other councils across the country to check their processes to ensure providers in their area are not making the same errors.”