Summary: Mr F complains the Council has not refunded top-up fees charged by nurseries where his son, B, received the Free Early Education Entitlement (FEEE). The Council has taken action to ensure a nursery’s charges comply with Government guidance and offered Mr F a symbolic payment to recognise delay in its response. This is a satisfactory outcome.

The complaint

1. Mr F complains the Council has not refunded top-up fees charged by nurseries where his son, B, received the Free Early Education Entitlement (FEEE).
2. He complained to the Council about the nurseries’ charges. The Council audited one nursery’s charges and agreed there were problems. The Council has taken action to ensure the nursery complies with Government guidance.
3. The Council offered Mr F a payment of £600 in recognition of delays addressing his concerns. The Council had initially not upheld Mr F’s complaint, but changed its mind after a meeting with Mr F.
4. Mr F says he has been overcharged by more than £3,000 and wants the Council to pay compensation.

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The Ombudsman’s role and powers

5. We investigate complaints about ‘maladministration’ and ‘service failure’. In this statement, I have used the word fault to refer to these. We must also consider whether any fault has had an adverse impact on the person making the complaint. I refer to this as ‘injustice’. If there has been fault which has caused an injustice, we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
6. If we are satisfied with an organisation’s actions or proposed actions, we can complete our investigation and issue a decision statement. (Local Government Act 1974, section 30(1B) and 34H(i), as amended)

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How I considered this complaint

7. I have considered information provided by Mr F and information provided by the Council. I invited Mr F and the Council to comment on my draft decision.

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What I found

Free Early Education Entitlement

8. The Childcare Act 2006 (as amended) places a duty on councils to secure early years provision free of charge. Regulations set out how councils should discharge their duty. The government has also issued statutory guidance councils must follow and from which they must not depart unless they have good reason.
9. All children who meet the eligibility criteria can take up a free childcare place if their parent wants one. This is known as the Free Early Education Entitlement.
10. Children are entitled to between 570 and 1,140 hours of childcare over no fewer than 38 weeks of the year depending on their age and eligibility.
11. The guidance says the free places must be delivered completely free of charge. Councils should ensure that providers do not charge parents “top-up” fees (any difference between a provider’s normal charge to parents and the funding they receive from the local authority to deliver free places). (Early education and childcare. Statutory guidance for local authorities published by the Department for Education in June 2018, paragraph A1.30)
12. 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. Where parents are unable or unwilling to pay for meals and consumables, providers who choose to offer the free entitlements are responsible for setting their own policy on how to respond (Early education and childcare. Statutory guidance for local authorities published by the Department for Education in June 2018, paragraph A1.25)
13. Councils should ensure that providers are completely transparent about any additional charges, for example for those parents opting to purchase additional hours or additional services. (Early education and childcare. Statutory guidance for local authorities published by the Department for Education in June 2018, paragraph A1.29)
14. Councils should “Work with providers to ensure their invoices and receipts are clear, transparent and itemised allowing parents to see that they have received their child’s free entitlement completely free of charge and understand fees paid for additional hours or services.” (Early education and childcare. Statutory guidance for local authorities published by the Department for Education in June 2018, paragraph A1.33)
15. Councils must exercise their functions with a view to securing childcare providers’ compliance with these requirements. (Childcare Act 2006, s9(2))
16. We published a report about nursery charges in October 2020 which received widespread attention. Our report highlighted the important role Councils play in ensuring nurseries do not charge top-up fees when delivering the Free Early Education Entitlement.

Mr F’s complaint

17. Mr F wrote to the Council on 4 September 2021. His letter explained why he believed he had been charged a top-up fee by a nursery his son attended. He quoted legislation, research and his correspondence with the nursery. He referred to our report. He requested the Council pay more than £3,000 in ‘damages’.
18. Mr F and the Council corresponded between September 2021 and February 2022 when the Council sent its ‘final response’. The Council had investigated Mr F’s complaint and concluded the charges were for “extras” and not a top-up fee. The Council agreed to audit the nursery again to ensure its compliance with the guidance.
19. Unhappy with the Council’s response, Mr F made a formal complaint on 20 May 2022. He said the Council was not complying with the law.
20. The Council responded on 3 August 2022. The Council said the nursery made a ‘wrap-around’ charge which it considered acceptable. The Council did not uphold Mr F’s complaint.
21. Mr F remained dissatisfied and asked the Council to respond at the second stage of the complaints process. He asked to meet with Council Officers.
22. The Council met with Mr F and responded to his complaint on 17 October 2022.
23. The Council said it had misunderstood Mr F’s original complaint in September 2021 and blamed the ‘litigious nature’ of his correspondence. The Council acknowledged there had been a delay in auditing the nursery’s charges following the undertaking it gave in February 2022. The audit, which had since been completed, showed the nursery did not comply with the government guidance. The Council had made recommendations to the nursery and would review the nursery’s response in November 2022.
24. The Council apologised for misunderstanding Mr F’s complaint and for the delay in auditing the nursery’s charges. The Council offered Mr F a payment of £600 in recognition of the distress the situation had caused him.

Consideration

25. In his original letter of complaint to the Council, Mr F quoted from his correspondence with the nursery about the charges. The nursery explained it calculated the total cost of the care provided for his son, subtracted the money it received from the Council to deliver the FEEE and charged Mr F the balance.
26. If this was the case, it means the nursery was charging a top-up.
27. Government guidance defines a top-up as the difference between a provider’s normal charge to parents and the funding they receive from the local authority to deliver free places. The guidance says Councils should ensure providers do not charge top-up fees.
28. This is the practice we warned against in our October 2020 public report.
29. Mr F’s complaint letter is very clear. I am surprised, therefore, the Council misunderstood Mr F’s complaint.
30. Further, I am concerned the explanation the Council initially offered – suggesting Mr F had misunderstood his entitlement – was an explanation put forwards by the nursery when the Council investigated Mr F’s complaint. The Council made no reference to the specific allegations Mr F made in his letter the nursery was charging a top-up.
31. This gives the appearance the Council had not considered Mr F’s complaint fairly.
32. The quotes in Mr F’s complaint from his correspondence with the nursery clearly suggest something was wrong with the charges.
33. Having dismissed Mr F’s concerns, the Council agreed to audit the nursery again in February 2022. Again, this causes me concern. The Council had ‘defended’ the nursery’s charges for six months following Mr F’s complaint before deciding to carry out another audit.
34. The audit revealed further problems with the nursery’s charges and invoices.
35. From the information provided by the Council, it appears the nursery had changed the way it charges parents by the time of the audit.
36. The nursery offers completely free childcare for a limited number of children for a limited number of hours per day, excluding holidays.
37. Parents choosing to send their children to the nursery at other times, or for longer than their FEEE, pay substantial charges for “extras” and meals as well as for any care that is not covered by their FEEE.
38. The Council considers these charges to be acceptable and has worked with the nursery to ensure they are clearly stated in the nursery’s price list and on invoices.
39. Parents can now make informed choices: they can use the nursery for a limited number of hours per day, term-time only, completely free of charge, or they can pay for “extras” and use the nursery at times of their choice. Parents who find these arrangements do not suit them can – and should – ask the Council to help them find an alternative nursery.
40. We do not approve or reject the nursery’s charges ourselves. This is the Council’s job. I am satisfied the Council has taken action in response to the problems with the nursery’s charges it identified following Mr F’s complaint. This does not guarantee the charges are faultless. Anyone who has concerns about the charges should raise the matter directly with the Council.
41. What does this mean for Mr F’s request for more than £3,000 in “damages”, money he says he paid for nursery care which should have been free?
42. The first point to note is that B was only at the nursery in question for four months, or one third of the period covered by Mr F’s claim for “damages”. He then moved to a different nursery. Mr F alleges this nursery, too, charged a top-up, but his complaint focuses on charges by the first nursery.
43. The second point to note is that we do not consider fees charged by a nursery to be a quantifiable financial loss the Council should repay.
44. Councils are not directly accountable for the actions of nurseries. Councils are an ‘intermediary’ in what is in effect a national scheme for free early education. Our primary concern is to ensure councils address problems where they arise for everyone’s future benefit.
45. We would not normally, therefore, recommend councils pay ‘compensation’ when they have taken appropriate action in response to a complaint. We are only likely to recommend a remedy where councils fail to take appropriate action.
46. In Mr F’s case, B had left the nursery long before he complained to the Council. So, while the Council could have taken action sooner (rather than defending the nursery for six months before deciding to carry out another audit), the delay has not caused a significant injustice. Mr F has not continued to pay unjustified fees at the nursery in question as a result of the delay.
47. The Council accepted it failed to properly understand Mr F’s concerns when he first contacted the Council, and that it took too long to audit the nursery’s charges. However, as the Council has taken action in response to his complaint, I consider the Council’s offer of £600 in recognition of these delays a suitable remedy.
48. Mr F may, of course, be ‘out of pocket’. He may have been charged fees by the nursery which government guidance says the nursery should not have charged. Mr F may wish to take the matter up directly with the nursery that made the charges. I am satisfied the Council responded appropriately to his complaint in the end.

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Final decision

49. I have completed my investigation. The Council accepts it failed to understand Mr F’s complaint and took too long to audit the nursery. However, the Council has now addressed Mr F’s concerns and offered a symbolic payment for the delay. I consider this a suitable remedy.

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Investigator's decision on behalf of the Ombudsman