York Childcare Ltd
Head Office and Accounts: 01904 654140
Out of School Management Service: 01904 679864

Charitable Activities

YORK CHILDCARE LIMITED

REPORT OF THE MANAGEMENT BOARD FOR THE YEAR ENDED 31ST MARCH 2011

 

The trustees present their report and the audited accounts for the year to 31st March 2011.

The financial statements have been drawn up in accordance with the Statements of Recommended Practice "Accounting and Reporting by Charities" issued in March 2005, and in accordance with the special provisions of Part VII of the Companies Act relating to small entities, applicable accounting standards and comply with all statutory requirements and the charity's governing document.

 

REFERENCE AND ADMINISTRATIVE INFORMATION

 

York Childcare operates 3 day nurseries and is known by the users of those settings as Joseph's, Heather's or Scarcroft Green Nursery.  It also operates the Out of School Management Service to manage, support and facilitate out of school care in the York area.

 

The company registration number is 2476480 and the charity registration number is 1008566.  The registered office is the principal office and is at 54a Nunthorpe Road, York, YO23 1BP.

 

All members of the Management Board are directors and trustees, and they are also members of the company.  They are listed below with the last year of reappointment.

 

 

C Harvey

 

Chair

 

2008

 

 

 

 

 

 

 

 

 

 

 

D Evans

 

Company Secretary

 

2009

 

 

 

 

C Jenkins

 

 

 

2008

 

 

 

 

J Armistead

 

 

2009

 

 

 

 

E Bonner

 

Appointed

 

17 May 2010

 

 

 

 

T Sidwell

 

Appointed

 

19 July 2010

 

 

 

At the date of this report the senior members of the organisation were as follows:

 

 

K Mawson

General Manager

 

 

 

 

 

S Harris

 

Nursery Manager

Heather's

 

 

 

 

K Joicey

Nursery Manager

Joseph's

 

 

 

 

S Battersby

Nursery Manager

Scarcroft Green

 

 

 

K Bradley

 

Out of School Management Services Manager

 

 

 

 

 

 

 

 

 

 

The company's agents and advisors were as follows:

 

 

 

 

 

Auditors

 

HPH, Chartered Accountants, 54 Bootham

 

 

 

 

 

York

 

 

 

Bankers

 

HSBC Bank plc

 

 

 

 

 

 

 

Parliament Street, York

 

 

 

 

Solicitors

 

Langleys with Munby & Scott

 

 

 

 

 

 

Queen's House,Micklegate, York

 

 

 

Payroll

 

HPH, Chartered Accountants

 

 

 

 

Accountants

54 Bootham, York

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STRUCTURE GOVERNANCE AND MANAGEMENT

 

York Childcare Limited is a company limited by guarantee and has no share capital. The Memorandum and Articles of Association dated 2nd March 1990 govern the company and its officers.  All members of the Management Board are directors and trustees, and they are also members of the company.

 

In accordance with the Articles of Association, members of the Management Board (the Trustees of the Charity) retire by rotation every three years.  New members of the Management Board are appointed by invitation of the existing Board who take into account the balance of skills needed to provide effective management. The Board follows the procedures recommended by the Charity Commission for the induction of new trustees.

 

The maximum number of members of the Company is 25 and liability of each member is limited to such amounts as may be required but not exceeding £1.  There are 12 members at the date of this report.

 

As a provider of workplace nurseries we invite the employers who use our services to provide representatives who serve as members of the Management Board.

 

The Management Board is the name given to the Trustees of the charity and the Board of Directors who manage York Childcare Ltd.  There are at present 6 serving members each with a specific skill that adds value to the organisation.  At present they meet monthly at a formal Board meeting to make such decisions as are required.

 

The Chair of the Board line manages the senior members of staff.  The wide range of skill base available is used on a regular basis so that matters concerning personnel, accounting, property, childcare issues, IT, banking and general management are all dealt with.  None of the Board receives nor asks for any reward for the services they provide as Trustees.  On occasions services are obtained from organisations with whom the Board are connected.  Those services are provided at open market under contract tender conditions.  In some instances, where the services are clearly provided at a discounted value, then a decision whether or not to accept is made by Trustees not connected with the organisation.

 

The day to day management of the organisation is under the responsibility of the General Manager to whom the nursery managers report and who deals with all administration of the organisation. The General Manager reports directly to the Board. 

 

The Out of School Management Service Manager deals with all work involving out of school clubs and reports directly to the Board.

 

The Trustees have examined the principle areas of the Charity's operations and considered the major risks, which may arise in each of these areas.  In the opinion of the Trustees the Charity has established resources and review systems, which, under normal conditions, should allow the risks, identified by them to be mitigated to an acceptable level in its day-to-day operations.

 

 

OBJECTIVES AND ACTIVITIES

 

Charitable status was awarded on 21st February 1992 and the registered Charity number is 1008566.  Charitable status was awarded because of a company policy to use the income generated from its activities for the promotion of assisted places in its nurseries.

 

Our objectives as an organisation are to provide quality and affordable childcare for children from 6 weeks to 16 years and in particular to support lone parents and those on low income. We achieve this both with the provision of nursery care and the work on managing and supporting Out of School Clubs.

 

As a policy we do not seek to means-test the users of the nurseries.  Consequently we offer assisted places to parents who are in receipt of certain State Benefits.  As State Benefits change we review and update our lists to ensure that as wide a group as possible is entitled to assistance.

 

The Out of School Management Service only works with out of school clubs that are ‘not for profit’.  The staff work in partnership with other agencies that are also grant funded to provide a full range of business support. The aim is to improve quality standards and ensure the clubs are viable longer term.  The management support given to out of school clubs is by way of charging for appropriate staff at an hourly rate sufficient to cover the direct costs.

 

We believe that our main activities further our charitable purposes for the public benefit.

 

ACHIEVEMENTS AND ACTIVITIES

 

As Trustees and Directors of York Childcare Limited we believe that we have complied with the duty in section 4 of the Charities Act 2006 to have due regard to public benefit guidance published by the Charity Commission.

 

Nurseries

 

We have continued to operate our nurseries in Clifton, West Bank Park and Scarcroft Green all of which offer high quality childcare. The results of the latest Ofsted inspections are available on their website at www.ofsted.gov.uk.

 

We believe that one reason our nurseries are of such high quality is the investment in our staff.  We value them highly and ensure that they receive full support and excellent training opportunities at our expense to ensure that they keep up to date with childcare practices. We have developed a training scheme to help to support those staff who wish to improve their qualifications. 

 

The Graduate Leader Fund supports staff wishing to train for Early Years Professional Status and has been awarded to 8 staff, 4 of whom have now qualified.  We have now decided how these staff best fit in our nursery structures to gain the greatest improvement to the quality of our services.

 

As a provider of workplace nurseries we operate Nursery Forums.  These forums were meeting once a term and are chaired by a Parent.  However we noticed a reduced level of interest from parents and after carrying out consultation it was decided to reduce the forums to an annual event at 2 nurseries and retain the termly meetings at the third nursery. We have worked to improve our website and we can now include news updates for each setting so that parents can access this at any time.

 

The nursery fees we charge are average market prices for York.  We do not expect our other parents to provide the costs of the assisted places.  We fund them by means of the free senior management services provided by the Management Board.  During the past year we provided line management, personnel, accountancy, and property advice free of charge.

 

In the past year the equivalent fee income of the assisted places was £5,257 (2010 £12,420).  The average number of families we have helped each month was 3 (2010 7). 

 

We continue to be approached by parents with requests for Assisted Places in order for their children to have continuity of care whilst they resolve employment issues, mainly connected with short-time working or redundancy.  We are reacting positively to the requests and this information has allowed us to access other funds to support these Assisted Places. In addition our senior staff are actively directing parents to this source of funding where they feel that the child would benefit from the nursery care we offer.

 

In the York area there is government funding via either Early Years Funding for children aged 3 and 4 years or Pathfinder Funding for 'hard to reach 2 year olds' and this is of benefit to many families.  Pathfinder Funding provides 15 hours per week of nursery education time and our staff work with parents to ensure that this provision is as flexible as it can be. 

 

The Management Board made the decision that those parents receiving ‘hard to reach 2yr olds’ Pathfinder Funding during term time, and other parents who were eligible would be allocated Assisted Places during the school holidays should they require it to ensure that the children received continuity of our quality care. The equivalent fee income of these places was £5,120 (2010 £7,961).  The average number of Hard to Reach 2 yr old families we have helped each month was 6 (2010 21) although not all of them received the additional financial support. Funding for these places was substantially reduced this year and is unlikely to continue.

 

In the York area some state financed schools do not have the capacity to provide the nursery education time for the 3 & 4 year olds.  Heather’s nursery acts as the provider of this service to Acomb School and Scarcroft Green Nursery acts as the provider of this service to Scarcroft School.  Joseph’s nursery has a wider catchment in the Clifton area of York.  We provided this service to an average of 22 (2010 25) ‘3 and 4 year olds’ a term at a funding cost of £155,413 (2010 £135,355) and to an average of 1 (2010 21)’ hard to reach 2 year olds’ at a funding cost of £5,597 (2010 £42,997).

 

The current level of funding does not cover the true cost of the service.  In the case of ‘3 & 4 yr olds’ it provides roughly 2/3rds of the true cost of the provision and as a consequence our staff must balance very carefully the occupancy of the nurseries with the demands of parents for funded places.

 

In September 2010 the government issued a Code of Practice for Early years funding.  It introduced parameters applicable to Early years sessions including a minimum hourly session of 2 ½ hours. It also prescribed the way in which nursery care was to be invoiced so that parents could see quite clearly the details of the funded sessions.  As a result we undertook a full review of our fee structure and invoicing patterns and the new structure was introduced in January 2011. 

 

The main cost for nursery fees is the payroll expense.  For children of 3 years and over the ratio of staff to children is 1:8, but for younger children the ratio changes to 1:4 and 1:3 for the youngest children.  We had not previously fully incorporated the additional payroll costs in our fee structure and made a conscious decision to move towards fee rates which more closely followed the full salary costs of our staff.  We also decided to phase out some discounts which had become obsolete.

 

We are members of the National Day Nurseries Association and our managers regularly attend local meetings.  This enables our senior staff to contribute towards national discussions which seem to centre on dissatisfaction with Government policy which seems to be causing detrimental affects on existing care whilst not providing improved access to parents and children from deprived areas.

 

All our nurseries now have strong links with local schools where the schools cannot provide pre-school nursery care on site and they work in partnership with the foundation classes at the school to ensure that the children have continuity of childcare.

 

Out of School Management Services

 

We have been active in the development and support of Out of School provision in York since 1993, when government funds first became available through the North Yorkshire Training and Enterprise council.

 

We started the Management Service in 2006 after the Management Board was approached by Dunnington Children.  The Management Board made a decision to support Out of School provision by using the management skills and knowledge of that sector already gained from the support service previously funded by various Government agencies and the City of York Council.

 

In the case of all the clubs, they retain their own separate legal identity and have not been merged or 'taken over' by York Childcare. We believe that this is the most appropriate way to support community voluntary groups within childcare and is part of our charitable objectives.

 

We charge out the relevant staff time at a direct cost basis and do not seek to take any surplus funds from these clubs.

 

We now have agreements with Acomb Out of School Club, Dunnington Children, Kool Kids at Clifton, St Barnabas Out of School Club and St Paul’s Out of School Club.  We have worked with other clubs from time to time to advise on expansions, property issues and marketing. In all there are approximately 1600 families registered with these schemes to whom out of school childcare is provided.  These schemes would not continue without our management services.

 

There have been a number of Ofsted inspections at the clubs and we are pleased with the grading and outcomes.

 

Schools were awarded special funds called ‘Me Too Money’ to support disadvantaged children and some of those schools chose to use the funds to support additional children in attendances at Breakfast Clubs and After School Clubs.

 

The Out of School Club Manager aims to meet the Head teacher and School Governor representatives at each school on a termly basis to discuss the operation of the clubs.  Where this does take place a good partnership relationship develops to the benefit of those using the clubs.

 

We have agreed to provided free of charge ongoing management support for the clubs at St Barnabas School.  In return the Governors of the school make no rent charge and provide a subsidy to the club whilst the fees are slowly moved to a level at which the club will be viable.  During the year we also provided some one-off grants to assist St Barnabas Out of School Club and Badger Hill Out of School Club.

 

The management assistance and grants are funded by means of the free senior management services provided by the Management Board.  During the past year we provided line management, personnel, accountancy, and property advice free of charge.

 

The total management costs that we did not recover in the year were £4,172 (2010 £20,042).  In addition we paid separate grants totaling £13,839 (2010 nil) to assist clubs with salary and professional costs.

 

The costing system we put in place for the clubs has been effective and is helping us to ensure that all the clubs move to financial viability over the forthcoming academic year.

 

FINANCIAL REVIEW

 

Reserves Policy

 

The Trustees have carried out a review of the level of reserves needed to sustain the charitable activities.  For normal working capital expenditure reserves of £60,000 are required.  In addition the Trustees recognised the need for Development Funds.  These would be used for improvement of existing facilities and funding for further projects.  Any additional spare reserves would be designated for future subsidies. 

 

Investment Powers, policy and Performance

 

The powers of investment are set out in the governing document. The Trustees have the power to instruct Investment advisers to assist with the investment strategy. No Investment advisers are currently appointed.

 

Financial Highlights

 

We continued to apply tight financial controls during the last year and are satisfied with the surplus of £47,475 (2010 surplus £6,454).

 

Both the leases at Heather's and Joseph's have annual break clauses and this gives us some flexibility in the control of our finances.

 

 

Details of our Unrestricted Reserves

 

The Charity Commission definition of free reserves is Unrestricted Undesignated funds less the book value of Fixed Assets.  At anytime an organization of this size has reserves tied up in the fixed assets it needs to operate.  If we take into account the loans on the leasehold property development at Scarcroft Green, then as at 31st March 2011 we had £91,243 (2009 £45,142) tied up in fixed assets.  This leaves reserves of £36426 (2010 £35,052) left as free reserves to support working capital requirements.

 

Our contracts with parents require them to settle their nursery fees at the start of each month so that we have sufficient funds to pay staff at the end of the month.  Many parents comply with the contract but our cash flow is affected by two means of payment arranged by Government.

 

Early Years Funding is available for 3 and 4 year olds and Pathfinder Funding for hard to reach 2 year olds and provides funded nursery care for up to 15 hours a week for the normal school year.  Our claims are made at the start of each academic term to the City of York Council.  In 2009 the council decided to make payments of 85% of the claim for the previous term within 5 weeks of the start of term, with settlement of the balance sum later on.  However this still leaves us with over 1 month of contributions unfunded during the early part of the term.

 

Many parents settle their fees with childcare vouchers, using the Government scheme whereby they can receive £243 per month free of tax and national insurance contributions.  We are often not provided with those vouchers before the middle of the month and the claims are then submitted to the childcare voucher companies and should be settled in full within 48 hours.  We receive over £7500 on average after the middle of the month from payment of such voucher claims.

 

From these two items alone, during the last year we needed working capital, or free reserves of at least £30,000. 

 

The terms of the Endowment do not permit us to spend the capital sum.

 

Our reserves are not at the level we would like.  However we believe that the actions we have taken are sufficient to continue to rebuild our reserves and we aim to increase them to the level of £60,000 as soon as is practical.

 

PLANS FOR FUTURE PERIODS

 

Nurseries

 

We continue to believe that the key to quality childcare is in employing the best staff and in ensuring that their training and support continues during their employment with us.

 

We are continuing to ensure that our staff attend internal training to help them apply the latest Government initiatives. In addition the Early Years Professionals are now being asked to carry out specific projects that will improve the quality and variety of care at all 3 settings.

 

Having completed the Equalisation survey on Early years funding, the City of York Council have now applied their chosen principles.  The Early years funding this year has been reduced by 10%  although an equalization factor will be applied at the end of the fiscal year.  More importantly they have changed the admissions policy at all York schools so that in September 2011 parents of 4 years olds should expect to have their child attend school full time. We shall therefore lose the 4 years olds who would usually attend nursery and are closely monitoring the effect this will have on the occupancy levels of the nurseries.

 

In addition the City of York Council have announced their intention to revert to the system of paying Early Years Funding  at the end of the second month in each term.  This will have an adverse affect on our cash flow since we shall be funding those places for the first 2 months of each term. 

 

The changes introduced in the Early Years funding Code of Practice to the minimum hourly session has proved difficult for some parent and toddler groups to apply.  As a result some of the groups are closing and we have received more requests for places for the younger children.

 

The City of York Council has announced the closure of Cherry Trees Nursery at the end of August 2011 since the nursery was not financially viable.  We operate the only other  nursery in the area and we have received requests from parents for places, although we are unable to meet the demand.

 

There is still a need for Assisted Places for families who fall outside the Government funding nets and for short term assistance to enable employment opportunities to be taken.

 

The funds that we have held to cover the Assisted Places for families at the York Women’s Refuge will run out this year and we will endeavour to obtain further grants to support this service.  However if we can not find additional funding we shall support the places from our own reserves.

 

Out of School Management Service

 

We shall continue the work with Out of school clubs, putting in place management agreements and provide strengthening to their existing voluntary committees.  We need to take on this work carefully to ensure that our staff are not overstretched and will be looking for further support funds for this work, since it will lead to the sustainability of existing clubs.  The City of York Council has announced reductions in the support being offered to Out of school clubs and we have already been approached by one club with the support of the school, with a view to taking on the management.

 

We have completed costings for the 2011/12 academic year and have actively marketed places at the clubs on the Schools New Admissions sessions.  This helps to maintain the viability of the clubs and forewarns parents of the costs. We are aiming for all the clubs to be financially viable by the end of the academic year.  Some clubs have fallen in arrears with settlement of their management fees but we are aiming that all fees be paid and up to date by July 2012.

 

The change to schools admission policies by the City of York Council has caused difficulties for some schools where there are inadequate premises.  We have been approached by 2 schools who are unable to provide full day schooling for the 4 years olds they are admitting.  They have asked us if we can arrange wraparound care for their children at Acomb School.  With the co-operation of the Head teacher and Governors at Acomb School we are working to put this in place.  The out of School Staff are able to access the expertise at the nurseries to ensure that the wraparound care meets the Early Years Foundation Standards for the younger children.

 

We are currently searching for additional funding for this service.

 

Management Board

 

We continue to look for new members of the Management Board with appropriate specialist skills.  The level of responsibility taken on by new members does appear to be a disincentive.

 

RESPONSIBILITIES OF THE MANAGEMENT COMMITTEE

 

Statement of Trustees' Responsibilities for the Annual Accounts

 

Law applicable to charities in England and Wales requires us as the Trustees of York Childcare Ltd to prepare financial statements for each financial year which give a true and fair view of the charity's financial activities during the year and of its financial position at the end of the year.  In preparing financial statements giving a true and fair view, our responsibility as trustees requires us to follow best practice and:

a) select suitable accounting policies and apply them consistently

b) make judgements and estimates that are reasonable and prudent

c) state whether applicable accounting standards have been followed, subject to any

  departures disclosed and explained in the financial statements, and

d) prepare the financial statements on the going concern basis unless it is inappropriate

  to presume that the charity will continue in operation.

 

As the trustees, we are responsible for keeping accounting records which disclose with reasonable accuracy the financial position of the charity at any time and which enable us as trustees to ensure that the financial statements comply with applicable law.  As the trustees, we are also responsible for safeguarding the assets of the charity and for their proper application, and hence for taking reasonable steps for the prevention and detection of fraud.

 

Members of the Management Committee

 

Members of the Management Committee, who are directors for the purpose of company law and trustees for the purpose of charity law, who served during the year and up to the date of this report are set out in the reference and administration section.  The Management Committee is known as the Management Board.

 

In accordance with company law, as the company's directors, we certify that:

so far as we are aware there is no relevant audit information of which the company's auditors are unaware, and

as the directors of the company we have taken all the steps that we ought to have taken in order to make ourselves aware of any relevant audit information and to establish that the charity's auditors are aware of that information.

 

The Trustees are responsible for the maintenance and integrity of the charity and financial information included on the charity's website.  Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

 

Auditors

 

HPH, Chartered Accountants will be nominated at the Annual General Meeting for reappointment and have expressed their willingness to continue in that capacity.

 

Approved by the Management Board on 19th September 2011 and signed on its behalf by:

 

 

D Evans

 

Trustee and Company Secretary