Could your wraparound childcare pricing be harming your budget – and your parents’ wallets?

Why is the take up of these schemes so low?

All schools offering wraparound childcare are supposed to inform parents about the schemes available to support with childcare costs. But the more parents accessing these schemes, the more paperwork for the already stretched school office team. It’s not hard to see why advertising these schemes drops down a school’s priority list.

In our experience, there are many reasons why take up of the schemes is lower than you would expect. These include:

• Providing the relevant evidence, for parents and schools, to secure the support can be (initially) laborious.
• Families (and schools) are frequently unaware of the options they have.
• Neither party are clear on the financial difference it can make to them.

The Vicious Circle

It’s perfectly understandable that schools (when looking to support their parents) set their prices at a low level.

In my experience many schools will start the pricing conversation around the question:

“What is this provision going to cost us to run, and how many children are we likely to have?”

Once they have this information, they simply divide one by the other to create their session cost. Worse still, pricing will often then sit dormant, unreviewed for years at a time, despite the (unending) rise in costs of delivering the club.

The problem with this approach is it has two significant negative consequences:

• The school is not generating any additional revenue that can be used to support its budget.
• (And most importantly), setting prices low inadvertently disincentivises parents from accessing any of the support schemes.

For example…

A parent books three afternoons a week for their son:

– If the afterschool club is just £4 a session, parents will be much less likely to access Tax-Free Childcare to receive a (20%) £0.80p reduction per session, or £93 a year.

– However, if the club is £12, then £2.40 saved every session, for three afternoons a week, is a total saving of £280 a year.

Suddenly, it becomes much more worthwhile creating a Government Gateway account to access the Tax-Free Childcare scheme.

How to Communicate the Change

We regularly support schools looking to make a change in their pricing. They have realised the mistake of charging too little and need to charge an appropriate amount. Communicating that change to parents can be tricky, but the most effective way to do this in our experience is as follows:

1. Acknowledge how important the service is

“It is a vitally important part of the school day for much of our community”.

2. Reaffirm your aim and the budget reality

Reaffirm that your aim is continue to provide a high-quality wrapround service, but school budgets are stretched. In order to be able to continue providing a great service, a change in pricing is necessary.

3. Confirm when you last changed prices

“Our last price rise was in (e.g.) 2022, since when our costs (like every organisation) have continued to rise”.

4. Stress the need for parents to access support

“As a community, we need to use every element of financial support available.”

5. Now, the crucial bit: tell the parents what they will pay

Tell the parents what the headline price is going to be (for example, £5 for breakfast and £12 for afterschool club).

But, crucially, display the prices parents will pay based on their eligibility for the different childcare support schemes:

Our headline prices are £5 per morning, and £12 per afternoon. However…

What you will pay per club

A Final Thought

Let them know these changes won’t come in to force straightaway We recommend giving parents at least one clear terms’ notice, and crucially, stick to your guns. Creating a Tax Free Childcare account, or registering for the Universal Credit Reclaim Scheme is a small amount of administration for a parent to do, that will make a massive difference to both their monthly expenditure and the school’s income.