Nursery chain Leapfrog has struck a deal with a local authority to buy in places in one of the groups existing settings.
In his keynote speech to the Laing & Buisson Annual Childrens Nurseries Conference in London last week, Andrew Fitzmaurice, chief executive of Nord Anglia, which owns Leapfrog, said that direct procurement of places was the solution to spare occupancy in private and voluntary sector nurseries and would be a win-win solution if they were deemed childrens centres.
Mr Fitzmaurice told Nursery World that guidance for local authorities should direct them in the first instance to buy places in existing settings. Why are we looking at building new provision when we have spare capacity in existing settings? he said.
A Manchester Leapfrog nursery has just become a satellite Sure Start with a local authority procuring six places directly.
Nord Anglia carried out a review mapping the location of Leapfrog nurseries against the 3,500 childrens centre roll-out, he said, and found a tremendous crossover with existing places. Nord Anglia is discussing with the DfES how to make it easier for local authorities to buy spare places in the PVI sector.
With average nursery occupancy running at 60 per cent, Mr Fitzmaurice estimated that the 40 per cent of spare capacity was worth 3.5billion.
He called for local authorities to take the lead and procure places directly to save building costs and aid sustainability.
Mr Fitzmaurice said that he was feeling more positive about the sector after a fairly rocky three or four years, but warned that there was a danger that with less than 50 per cent of nurseries making a profit, some good nurseries could close.
However, he said that he believed this was fundamentally a problem of oversupply and was not down to Government policy.
However, discussing the findings of the forthcoming Laing & Buisson Childrens Nurseries Market Report, economist Philip Blackburn accused the Government of not listening to market forces.
I think the problem is the rate at which the Government is creating childcare places. The Government has its own agenda and Im not sure it really cares whether there are nursery closures in the private sector.
He said demand was very close to reaching the ceiling and that there was no sign that occupancy was getting better. He said that further expansion was unnecessary.
Director of Sure Start Sheila Scales said that the DfES would launch a Schools and Early Years Funding consultation in the next month to look at how funding is used by local authorities and how they might reform the funding system for early years and the free entitlement for three-and four-year-olds.