I paid lunch fees ahead of lockdown but the nursery won't refund me the money – what can I do? 

I have a problem with our nursery. At the beginning of last March, we paid all the fees for the lunch of our daughter upfront. 

Now the nursery is refusing to refund the money because they say that the lockdown wasn’t its fault. 

After a few months trying to get our money back we’re getting no further responses from them. How can we claim our money back?

Angelique Ruzicka from This is Money responds: It’s understandable that you’re frustrated with your nursery, considering that you’ve paid for something that your daughter never had. 

There are, unfortunately, many other parents in your predicament.

It’s also created an awkward situation. While on the one hand you want your money back you hardly want to clash with the very people who are meant to take care of your child and who you’re likely to see on a regular basis at drop offs and pick-ups.

This is what prompted the Competitions and Markets Authority to pen an open letter to the early years sector back in July.

The watchdog warned that the early years sector could face legal action from parents for ‘illegal and unfair practices’ during the height of the Covid-19 pandemic.

They also warned nurseries and pre-schools not to emotionally blackmail parents with threats of closure or tell them that they will lose a place if they are not able to carry on running their businesses following any refunds or part-payment agreements.

CMA’s enforcement action threat 

The CMA says it is not engaging in any enforcement action and now, more than two months on, it appears to have the same stance. 

This unfortunately means that parents are still left to fend for themselves.

When we asked for an update on its stance on early years organisations not refunding parents, a spokesperson for the CMA said: ‘The pandemic has been incredibly tough on everyone, including nurseries and childcare providers, but that doesn’t mean that parents should be left struggling to cover the cost of a service they haven’t received.

‘The CMA has published an open letter and advice to the sector, reminding childcare providers to treat consumers fairly and offer refunds when they are due.

‘We know that some nurseries will request a small contribution to running costs, and some parents may be happy to support them, but any arrangements should be mutually agreed and reflect our advice. 

‘Many providers are already doing the right thing, but this extra information should be a strong reminder to those still refusing to respect consumer rights.

‘If people need help with making a claim for a refund, they can get in touch with a consumer advice organisation such as Citizens Advice or consider seeking legal help.’

We also approached the Professional Association for Childcare and Early Years (Pacey) for a view. 

A spokesperson from Pacey said: ‘These are difficult times for parents and providers. 

Every time a service has to close due to Covid, a nursery or childminder is likely to make a financial loss that only adds to the sustainability challenges they have faced for many years. 

‘Consumer law is clear that parents shouldn’t be charged full or substantial fees while their childcare provider is closed.

‘Whilst it is difficult to give advice without seeing the specific contract, in general a provider can charge parents for a contribution to overheads such as staffing, rent etc. when closed. 

‘Some have negotiated a voluntary contribution to maintain their service but these have to be fair and reasonable.

‘Ultimately we need government to recognise that childcare services are vital for our economic recovery and to put in place additional support to help providers cope with temporary closures due to Covid-19, especially as so many are having to close for days at a time due to delays in accessing Covid-19 tests even though they are priority workers.’

Legal action 

The early years sector has been hard hit by the Covid-19 pandemic. 

A report from the Institute of Fiscal Studies shows that the total loss of income from parent fees has put a quarter of the private sector nurseries at risk of running a significant deficient during lockdown with less than £4 of income for every £5 of costs.

It also reveals that childminders have been particularly badly hit with almost 30 per cent of them now earning less than £4 of income for every £5 in costs.

While this refusal of a refund goes against what the watchdog is recommending, this is probably why your nursery is holding onto the funds.

But there are a few options open to you. 

You can either come to a compromise and ask for a part refund. 

If that still doesn’t sit well with you or if it’s not agreed to then it’s best to send something in writing asking for your money back and highlighting a link to the CMA’s letter. 

This will help to provide proof of correspondence should you take further legal action.

If this is still ignored, then get in contact with your local Citizens Advice Bureau or contact a solicitor for help.