When the Government launched its Neighbourhood Nurseries Initiative, several large nursery chains expressed an interest in participating in the provision of subsidised childcare places in disadvantaged areas.
Some embraced the initiative, but most regarded the application process as bureaucratic and expensive and the future viability of neighbourhood nurseries, once Government funding ran out after three years, too precarious for them to sign on the dotted line.
However, with the Government launching an ambitious drive for 2,500 children's centres delivering integrated services by 2008 and plans to develop wraparound care in schools, nursery chains are showing renewed interest. But will the business marriage between private chains and public sector initiatives be more fully consummated this time around?
Expertise and ability
The sheer scale of the Government's plans is encouraging a belief among private chains that their expertise and their ability to raise capital funding could prove invaluable if the DfES ever seeks their assistance.
While the Government has indicated that it wants local authorities to work in partnership with the private and voluntary sector, the DfES has not actively sought their help.
'We need to start a dialogue with central Government and work out practical steps to help deliver their agenda. That may be by talking to local authorities, and doing things at a local level, or through centrally-led initiatives,' says Nord Anglia chief executive Andrew Fitzmaurice. 'While we want to get on board with the Government's plans, we are still unclear as to how best we can do that.'
Phil Rhodes, chief executive of Asquith Court, expresses similar enthusiasm, but says he feels the lack of clarity about the potential role of the private sector stems in part from the DfES's failure to fully define what a children's centre is.
Both executives believe the way to engage the private sector is to put out to tender clusters of children's centres, rather than the individual tenders that characterised the Neighbourhood Nurseries Initiative.
Mr Fitzmaurice explains, 'The problem with neighbourhood nurseries was that individual tenders involved an extremely expensive process because you needed to put such a lot of time and effort into it. For a small amount of business, it is difficult to justify, bearing in mind you may not win the contract.'
He feels that by putting out to tender 'decent-sized bits of work, such as 30 children's centres in, say, west London', the private sector would be more likely to get involved and the tendering process would help to provide some clarity.
Mr Rhodes also believes that the private sector 'could be very efficient in providing the sort of volumes and quality that the Government is looking for'. If the Government was prepared to guarantee revenue funding for longer than the three years for neighbourhood nurseries, he says, chains could raise a lot of the required capital.
He says, 'We think there is an opportunity to develop a programme that with committed funding could actually allow children's centres to be provided very economically. In terms of value for money, it is the cost of capital that matters for the Government and if there is a very limited horizon on funding, nobody will be able to raise the capital.'
Despite lobbying of the DfES by the chains themselves and the National Day Nurseries Association to show the merits of engaging the private sector as partners, Mr Rhodes warns, 'The risk is that the Government will fall into the trap of allowing a plethora of different solutions coming out of all the local authorities, which would probably be very inefficient.'
However, a DfES spokesman appears to be ruling out any pact between central Government and the large nursery chains when he states, 'It is local authorities who develop children's centres, not private providers or any other organisation.'
A private provider could not develop a children's centre separately from a local authority's strategic planning of integrated health, education and care services. 'However, a local authority could involve private providers as partners in children's centres, or the local authority could develop other services around the private provision,' he adds.
The DfES spokesman says that in the past the Sure Start Unit has 'actively brokered relationships' between local authorities and large national chains who were 'offered flexibility to manage their portfolios across local authority areas'.
While nursery chains may look in vain to the Government to ease their way into the children's centre programme, their greatest concern is long-term viability. Phil Rhodes says that careful capacity planning is vital for sustainability, especially in light of the experience of some neighbourhood nurseries who feel threatened by new Government initiatives.
Alan Bentley, chairman of the Childcare Corporation, cites 'utmost concern for sustainability' as one of the main reasons why his chain will not be embracing the children's centre initiative. He says, 'These initiatives are born out of political hype and do not have sensible professional regard for sustainability.'
He adds, 'I can't see many chains seeing the children's centre programme as a natural blend with what they have already got.'
Extended use
Andrew Fitzmaurice points to the experience of some neighbourhood nurseries who, 'having been given three years money, are then expected to stand on their own two feet in areas where it is not easy to find parents to pay the fees that are required'.
However, the Just Learning nursery chain has tendered for an integrated children's centre. Managing director Michael Fallon says 'children's centres and childcare in schools are the new games in town and we have to take them seriously'. If the Just Learning bid is accepted, there will be a 50-place private nursery 'to provide an income stream for the rest of the centre'.
While the chain has not designed a children's centre around one of its nurseries, he adds, 'There is no reason why you can't use a nursery building more extensively. Some of our sites are large and we would welcome proposals.'
Andrew Fitzmaurice also believes that the wide range of services provided by many nurseries, such as wraparound care and holiday clubs, mean that they already have the essential elements to become children's centres.
However, Mr Fallon would welcome a mechanism to avoid chains becoming embroiled in a lengthy and costly process of proving their business acumen to every local authority.
While children's centres are subject to approval by children's minister Margaret Hodge, funds are to be channelled through local councils who will have strategic control over the introduction of centres, initially in deprived areas, then in every community.
Community needs
Kay Turner, managing director of Buffer Bear Nurseries, says, 'It's not about coming along with a model that you superimpose on a community. The whole point is that the decisions about how a children's centre will operate and what services it should provide come out of what's happening in the local community.'
About half of Buffer Bear's 30 neighbourhood nurseries are at various stages of the approval process to become children's centres in what Dr Turner describes as 'a natural evolution' of the chain's partnership working with local organisations.
Developing local partnerships - a key element in what Dr Turner describes as Buffer Bear's 'social enterprise stakeholder model' - is not easy. She says, 'We are helped by the fact that we are able to treat each project as completely unique. We can respond to whatever local needs are and be flexible.'
She says Buffer Bear's facilities range from state-of-the-art buildings where there are health and education services alongside Job Centre Plus all on one site, to redundant parts of a school in the middle of a housing estate where there may be few facilities.
Dr Turner is also concerned over the extent of children's centre funding and insists that at the heart of working in partnership with local community organisations lies the need for a realistic and realisable business plan.
She adds, 'We are acquiring a lot of hard experience of working in partnership, and through doing it we get hard evidence of what works in practice. We hope that we will be able to inform the future strategic direction for this kind of initiative and that it will continue to develop.'
But for many of the larger nursery chains, convincing the Government to offer them blocks of children's centres seems a distant prospect while the DfES insists that the planning and development of the programme will remain firmly in the hands of local authorities.