The environment for attracting and encouraging new providers into the childcare sector is currently quite frightening. It seems that there are few fixed points and little guidance for the future. But the situation is not quite as difficult as it seems at first glance.
Local authorities (LAs) are in the process of completing their second full Childcare Sufficiency Assessment, ready for publication by 31 March 2011. If the last time is anything to go by, many LAs will conclude that there are insufficient places to meet demand. This is even more likely, given two recent pieces of evidence:
- - Ofsted data shows that the number of nurseries has fallen by 718 since the end of September 2009 and the number of childminders has fallen by 2,737
- - The Childcare and Early Years Survey of Parents (DFE-RR054, 2009), published by the Department for Education this October, shows that just over a third of parents believe there are not enough childcare places in their local area - although the good news is that this is lower than the 2004 results. Things are improving over the longer timescale.
Some local authorities will be tempted to respond to this apparent gap in the supply of childcare by launching initiatives to boost the number of providers and/or the number of places in the local area. Before doing so, there are three main pitfalls that local authorities - and childcare providers - should beware:
- 1. The gap is unlikely to be about the raw number of places, so check, and double-check, what parents are really asking for
- 2. The market may be ready to meet parents' needs, so local authorities should resist the temptation to respond immediately
- 3. The maintained sector will be an obvious starting point, but beware - this solution may result in less choice.
1. The gap is unlikely to be about the raw number of places
Our experience of undertaking research with parents about their childcare needs reveals that there is only one group that consistently highlights the need for more places and more providers. This is parents with disabled children, who frequently report that they struggle to find a provider who can cater for their child's needs (and who they trust to care for their child); and where they do, they have little choice in what provider they use.
Other parents who do not currently use childcare report that the main reason for not using childcare (besides lack of choice) is affordability. This affects about 10 to 15 per cent of all families. Lack of places tends to be much further behind in terms of local priorities: our research suggests that it affects less than 3 per cent of families. This is reinforced by the DfE study with parents which revealed 'a small minority (10 per cent) said they were not using childcare because they could not afford it, and very few parents mentioned problems with availability, transport or quality'.
Also, where there is a shortfall of places, this is usually for a specific 'type' of childcare place - that is, a place that is of a high enough quality that is also affordable, flexible, suitable for older children and preferably attached to a school. Research undertaken in 2007 on behalf of the DCSF specifically on the needs of low-income families adds to this perspective (Understanding Attitudes to Childcare and Childcare Language among Low Income Parents, DCSF RW059, 2007).
It shows that low-income families need childcare that acknowledges the value of children spending time with their family, emphasises the benefits to their child and is trusted (where Government-run nurseries, schools and school clubs are the most trusted).
2. The market may be ready to meet parents' needs
Markets are pretty effective at digesting new pieces of information about parental demand and responding to new opportunities accordingly. Few LAs, in our experience, give the market time to respond to the findings of their Childcare Sufficiency Assessment.
This may happen automatically - that is, a local childcare provider reading the findings from the Assessment and deciding to respond to the identified shortfall in supply. Or it may happen with a 'nudge' from the LA - for example, highlighting a shortfall in supply as a priority that should be addressed and explicitly asking existing (or new) players to address it.
If this doesn't work, the next step should be for an LA to 'do something to the market'. This will vary in different areas: stimulating the market, filling gaps in provision, or perhaps looking at the maintained sector.
3. The maintained sector will be an obvious starting point, but may result in less choice
And the most obvious starting point will be for LAs to manage the bits of the market that they have the most control or influence over - that is, provision that is run or funded by the local authority, and schools. This is more likely to be the case now, as:
- - The Comprehensive Spending Review will mean that LAs will not have funding to help address gaps, for instance, through pump-priming or subsidies
- - The protection of schools funding and the introduction of the Pupil Premium will mean that schools may be the best place to respond to improvements in childcare provision, especially for disadvantaged groups
- - Parents often express a preference for childcare provision that is attached to schools. For instance, parents with low incomes are most likely to trust Government-run nurseries, schools and school-based clubs (Understanding Attitudes to Childcare and Childcare Language among Low Income Parents, DCSF RW059, 2007).
This is reinforced by our own research, where this preference is sometimes a misunderstanding about the allocation of school places (for example, 'if I don't use my free entitlement place at my local school I am less likely to get a place') and sometimes about preferences and the logistics for parents of juggling school and childcare and work, especially for older children.
However, all these factors run the risk of reducing the range and diversity of provision in the local area. The Government's new Localism Bill, however, may help to prevent this. In a recent speech to the National Children and Adult Services Conference, Sarah Teather, Minister of State for Children and Families, highlighted the intention to give voluntary and community sector organisations a right to challenge services run directly by local authorities.
Her speech referred to children's centre services and youth services, so could easily have the potential to apply to childcare. Such a Bill would enable a third sector organisation to take over the running of local authority-run provision if the voluntary community sector organisation can prove better impact or greater efficiency.
I've avoided the pitfalls, what next?
If LAs have avoided these pitfalls, and if a gap in the number of places or the number of providers remains, our experience in helping LAs ensure that the local childcare market meets parents' needs, highlights the following strategies:
1. Tap into the diversity of provision: are places restricted across all types of childcare provider, or are there some providers operating with vacancies? If the latter is in fact the case, then strategies aimed at changing parental perceptions and preferences can quickly and relatively easily address the gaps in the market. Childminder networks, for instance, have been used by LAs to improve the levels of trust that some parents have in this provision. 'Loose' federations of providers can also be used to encourage parents to use provision in a setting other than their first choice.
2. Prioritise the existing providers, especially to increase the number of places - existing providers will have the best understanding of the local area and of the needs of parents. It may be that the number of places on offer can be easily increased through the recruitment of additional members of staff.
3. Consider networks of providers to create new places or new provision. In the current economic environment, establishing a new setting or undergoing significant expansion could be too big a risk for providers. This risk, however, could be spread by providers working collaboratively.
By working together, LAs and childcare providers can address gaps experienced by parents in the local childcare market. Local authorities need to have a detailed picture of the exact gaps that are being experienced by parents, and the changes that will occur by addressing the gaps.
Providers also need to know where they fit within the childcare choices available to parents so that they can better meet needs. If the needs of parents, providers and local authorities do not coincide, then the Localism Bill may tip the balance and give parents and providers an avenue by which they can challenge local authority monopolies.
Colin Horswell is the managing director of Cordis Bright. Cordis Bright works with local authorities and third sector organisations to improve services and outcomes (www.cordisbright.co.uk, tel: 0207 330 9170).