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OSHC fees rise both ways, survey says

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And the survey says

During Term 2 we ran a national survey of the state of affairs for Outside School Hours Care (OSHC or OOSH) services and the results release began with this story last month showing in NSW alone 8000 families are not getting the places they need for their children.

This week we look at what’s been happening to fees since 2015 – both the fees OSHC services charge parents, and the fees the OSHC services are being charged by schools or other landlords.

Roundtable discussion

We launched the survey following the March election in NSW, as the Premier had released a substantial set of promises designed to help OSHC. Our survey questions – while targeting a broader audience than NSW alone – were also seeking to understand whether the promised $120+million funding package would adequately target the problems OSHC educators were reporting.

Tomorrow in Sydney there’s a roundtable discussion happening to look at exactly that question. CELA CEO Michele Carnegies says the organisation has been working with the Department of Education (DoE) with information gathered directly from its OSCH members as well as from others who have responded to the survey.

“The discussion will look at the election commitments, including the proposed support for parents, OSHC providers and principals,” Michele said.

“There will be a progress report on the actions since March, and the opportunity for peak bodies like ours, and service representatives, to provide feedback and advise the DoE on implementation.”

Increased fees for families

Four out of five services who answered this question on the CELA survey said they had increased fees for families since 2015.

Some of the services reported only minor increases over that time:

“Our fees have increased by a grand total of $5 in the mornings and $7 in the afternoons in the past six years.”

Others have had more frequent jumps related directly to operating costs:

“Since 2015, our fees have increased on three occasions. Twice to meet increasing cost (transport and entry fees for excursion; increase of staff for better supervision; increase of staff wages to retain staff) and another increase of fee this year due to a rent increase.”

The latter experience is more common and, particularly in NSW, many services are flagging more, and potentially steeper increases for families on the basis of significant increases to their licence fees in government schools.

Increased fees for services

Many services are not experiencing major rent or licence fee increases, but those which are often report significant jumps.

Some community based services are very fortunate in their accommodation, like this response to our question on operating cost increases:

“Not applicable. Run from the community centre next door. City service and pay no rent.”

More common, however, were responses like this:

“Our [licence fees to the school] just jumped from $10K to $33K in one year with no warning it was coming.  It was hard as a NFP volunteer parent committee. We just got a bill for $33K to pay all at once which is a lot on a small centre.“

Connect the dots

It’s a very short hop from viewing increases in parent fees to seeing a connection to increases in many OSHC service operating costs.

“When the Department increases rents so much the increases are then passed onto the parents’ fees.”

Fee increases in NSW government schools are widely understood by OSHC educators to be limited to the CPI, but there are exceptions.

“Increase substantially and have been notified it will go up again, it’s set at a 5% increase year on year which is higher than CPI. DEC is not open to negotiation. This only hurts families.”

The amount in the DoE policy is actually 4%, and is higher than CPI as it is intended to also include increases in utility costs.

Licence fees are increased by a standard 4% on the anniversary of the commencement date of the licence to cover CPI/increases in utility costs.

Source: OSHC Licence Fees, NSW DoE website

Licence fees

In NSW, the Department expects the licence fee to cover “all the school’s costs associated with having the operator use school facilities”. These costs might include electricity, gas, water, cleaning, garbage removal, additional school administration, maintenance, additional wear and tear, the use of some items of equipment and “any other incidental costs”.

Once this fee is set, the above requirement for CPI and utility cost increases applies for the duration of the lease.

But there are options in the policy for the fee to be increased by larger amounts, such as those reported by some of our survey respondents.

“We experienced an increase of 500%. The increase in our rent fees meant an increase of our fees (direct impact to families).”

For instance, the DoE policy says:

The set licence fee may be increased to suit local circumstances, however, any increase must be approved by the delegated School Infrastructure NSW executive.

Source: OSHC Licence Fees, NSW DoE website

Threat to viability?

While high licence fees and unexpected rent increases are reported as a threat by affected services, the bigger picture is actually more optimistic.

“Rent increased dramatically by 300% last rent increase having a drastic impact on our finances.”

Around 60% of respondents identified ways in which they were cutting costs to meet financial challenges, while 40% said they were well funded to meet their needs.

Community based service providers were more likely to say they were well-funded, around one in two, than commercial providers, around one in four.

Of those cutting costs to remain viable, the most-reported actions were:

  • We’ve cut back on casuals and admin time
  • We’ve reduced our over-ratio staffing and now just meet the minimum
  • We no longer have cover for sick days. Our manager comes in
  • We have not maintained the above-award wages we once offered
  • We don’t have a resources budget – staff supply their own craft materials
  • We only do ‘free’ excursions in vacation care, like the local playground
  • When a piece of equipment breaks, we know it can’t be replaced.

Summing up

According to CELA’s Policy and Research Consultant, Megan O’Connell, taken together, this data paints a picture of a the OSHC market as a dynamic and volatile market, where costs are escalating and fees cannot always be raised to meet these costs.

CELA CEO Michele Carnegie will attend tomorrow’s roundtable discussion with other key peak bodies for OSHC and education.

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