Every Contract a Nursery Needs in the UK (2025)
Last updated: February 2025
Legal Requirements for a Nursery
UK nurseries must be registered with and inspected by Ofsted (or the Care Inspectorate in Scotland) under the Childcare Act 2006. They must meet the Early Years Foundation Stage (EYFS) statutory framework requirements. The Safeguarding Vulnerable Groups Act 2006 requires DBS checks for all staff. Staff-to-child ratios are legally mandated. The Equality Act 2010 requires reasonable adjustments for children with disabilities. Employment law applies to all staff, with additional requirements around safeguarding training. Nurseries delivering funded childcare must comply with local authority funding agreements.
Essential Contracts
Covers fees, hours, notice periods, sickness policy, collection arrangements, and parental responsibilities — must be fair under the Consumer Rights Act 2015
All nursery staff must have enhanced DBS checks with barred list checks — the employment contract must address this as a condition of employment
Legally required under the EYFS framework and Working Together to Safeguard Children — must include a designated safeguarding lead and reporting procedures
Agreement with the local authority for delivering the 15 or 30 hours funded childcare entitlement, covering funding rates, eligibility, and quality requirements
Recommended Contracts
GDPR-compliant consent for taking and sharing photos of children, including for learning journals, social media, and marketing purposes
Contract with supply agencies or bank staff, ensuring they meet DBS, qualification, and safeguarding requirements before working with children
Parental consent for nursery outings with risk assessment documentation, emergency contact details, and medical information
Common Legal Risks for a Nursery
- Ofsted enforcement action or closure for failing to meet EYFS requirements or staff ratio regulations
- Safeguarding failures leading to serious case reviews and potential criminal prosecution
- Fee disputes with parents without clear contractual terms on notice periods, fees during absence, and additional charges
- DBS check failures or delays preventing staff from starting work and causing ratio breaches
- Funded childcare funding shortfalls where government rates do not cover the actual cost of provision
Industry-Specific Notes
Nurseries face a unique regulatory burden combining childcare, education, safeguarding, and health and safety requirements. The EYFS framework is regularly updated and compliance is inspected by Ofsted. Staff qualifications must meet specific level requirements (Level 3 for room leaders, Level 2 for assistants). The funded childcare entitlement creates financial pressure as government rates often do not cover costs — parent contracts must carefully manage the interplay between funded and paid hours.
FAQ
Can a nursery charge parents for hours covered by the government's funded childcare entitlement?
No, nurseries cannot charge for the funded hours themselves. However, they can charge for additional services beyond the funded entitlement, such as meals, nappies, sun cream, and activities — provided these are optional and parents are not required to purchase them as a condition of accessing funded hours. The local authority funding agreement will specify what can and cannot be charged. Charging 'top-up fees' for funded hours is not permitted and can result in funding being withdrawn.
What DBS checks must nursery staff have?
All nursery staff must have an enhanced DBS check with a check of the children's barred list before they can have unsupervised access to children. This is a legal requirement under the Safeguarding Vulnerable Groups Act 2006. Volunteers who work regularly must also be checked. The DBS check must be repeated if there is a break in service of more than 3 months. Nurseries should also subscribe to the DBS Update Service to allow portable and ongoing monitoring of staff criminal records.
What happens if a nursery falls below the required staff-to-child ratios?
Staff-to-child ratios are legally mandated under the EYFS framework: 1:3 for under-twos, 1:4 for two-year-olds, and 1:8 for three to five-year-olds (with a qualified teacher, otherwise 1:13). Falling below these ratios, even temporarily, is a regulatory breach. Ofsted can issue welfare requirement notices, impose conditions on registration, suspend registration, or cancel it entirely. The nursery should have contingency plans including bank staff and clear policies on when to temporarily reduce capacity if ratios cannot be maintained.
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