In a wide-ranging debate, the panel at Nursery World's Business Summit talked about how size impacts the quality of nurseries, the pros and cons of small versus bigger groups, the influence of private equity investment on large nursery groups, and concerns about providers’ ability to support children in deprived areas and take on the rising numbers of children with SEND.
June O’Sullivan, chief executive of the London Early Years Foundation, warned of a growing economic and social divide as the market undergoes 'a controversial' shift with the Government funding the majority of places through expanding offers.
If Government expansion of the 15- and 30-hour funded offers continues as planned, private and voluntary nursery providers could become the ‘third arm of the welfare state’, she argued.
Up to 70 per cent of places could be delivered by the Government, she said. ‘There’s some debate around that figure. But if that’s the case then we become the third arm of the welfare state. And that means that our ability to cross-subsidise is very limited. Align that with ideology. Deep philosophical and economic conversations need to be had.’
O’Sullivan urged delegates to look at the ‘bigger picture’ and said that ‘grown-up conversations’ were needed about what this market shift means.
She added, ‘If we stick to the market model, which has got its failures, there are huge failures out there, in social care, growing too fast and not [being] supported. If the Government continues with this where does the market model lie?
‘If the Labour party get in, their ideology is more aligned to the model of the state. There is talk of the state delivering everything. But what does that mean for [all of] you currently working in the private sector?
‘We need to be thinking about a deeply controversial and philosophical shift that is taking place before our very eyes. We are moving from a market model into a possibly welfare state model. And if we’re in a welfare state model then we are doomed, because none of this is linked to inflation, and real costs, and we’ll be having this begging bowl conversation all the time.
‘We are creating an economic divide and a social divide, and we are creating a huge problem. We [need] to have a proper conversation about what the market is going to look like, and the ideology we are aligning with, if we are going to deliver childcare in this country for every child as a right.’
Courteney Donaldson, managing director of childcare and education at Christie & Co, told delegates, ‘It was notable that in his address that the minister said we’re not going to force you [to provide the expanded offer]. That was the biggest takeaway for me, him saying that in a public forum.’
Turning away children with SEND
Referring to a comment made by one delegate who had been criticised by Ofsted for not taking a child with SEND, O’Sullivan asked now many other providers had been affected.
‘I am having that conversation,’ she said. ‘We’re a social enterprise, we’re in high deprivation and I’m worried that we will tip the whole thing over if we take any more children [with SEND].’
O’Sullivan asked for a show of high hands of how many in the audience were having to turn children with SEND away.
‘This is a good proportion of the audience,’ she said, urging the sector to join forces to raise the issue with Government. ‘There’s no support, none of us get any EHCP. We’re not even talking about speech and language now, that’s not even an issue, we have children that are banging their heads. We have staff that are crying every day because they are exhausted. We’re talking about quite severe [needs].’
In response one delegate shared her experience as a provider.
‘We were asked to take two very difficult children. One, who as you just described hurts themselves and bangs their head, which we did. They were meant to go to school and we extended their time with us, which we did. They still couldn’t find a school. We were asked to extend it further. And we had no-one from the local authority come in, we had no funding for it. To this day we only got part funding for the time the children were there, which goes nowhere to what we spent. You’re asking whether I would do that as a private business again, no I wouldn’t, and I’ve told the local authority that.’
‘Two-tier system’
Delegates in the audience also raised concerns about the development of a two-tier system.
Commenting on the rise of private equity investment in the sector one delegate said, ‘It is absolutely true that they’re interested in a return for which you have to charge higher fees to pay proper wages in expensive buildings. You are not targeting the lower quarter of the market. How many children are not within these 15 hours at all? Is it 100,000 children who are not getting anything, 20,000, does anyone actually know? How many children are getting nothing and what are we going to do about that?’
Donaldson said, ‘If you’re in private equity looking for a fast buck, I tell them to go elsewhere, their motivation has to be about maintaining quality, expansion and growth.’
Speaking about his experiences of working with private equity, Arun Kanwar of Cairneagle said, ‘I don’t think it’s fair to say they don’t talk about quality. It is fair to say that not all private equity and large organisations are equal. I do think some organisations have grown too quickly and not been able to sustain quality. The number of closures that large groups have are much lower than elsewhere in the sector, they are able to support poor performance in some of their nurseries when the going gets tough.
‘We do need a solution for the lower-income market, and we are in danger of a two-tier system and that is a challenge not just for private equity but generally. There has to be a solution from Government, maybe a graduation of funding [according to area].
‘We hear about private equity making super-profits, but nobody is talking to me about super-profits.
‘I think it’s less clear cut than them being about making as much money as quickly as they can.’
O’ Sullivan also told delegates that the early years sector needed to own its own language.
‘There’s a big conversation to be had that is positive…We need to pull the conversation back to quality and children. We need to shift our narrative a bit and around the child and up the ante and talk about this in a scientific way. We don’t really talk about the arts, crafts and science of early years teaching. We don’t talk about pedagogy. We need to own our language better, stop talking about practitioners, and talk about teachers and educators, otherwise they’re never going to take us seriously.'
Size and quality
O'Sullivan said there were benefits to bigger groups, such as being able to bring in a pedagogy team.
Mya Sharma, operations director at Ely Nursery in Finchley, spoke about her experiences as a standalone provider.
‘As a single site nursery you do have to wear a lot of hats. I have the title of operations director but I’m on the phone to parents every other day, I’m doing finance, and the curriculum,’ she said.
‘One of the advantages is, we have a large chain on our doorsteps, but parents sometimes choose us over the chain because of our family ethos.’
Elaine Sagar, chief executive of Sunflower Childcare Group and chair of a local network to support providers, said, ‘We’ve made ourselves a group with other providers. By doing that and leaving at the door the fact we’re competitors we’ve put children at the heart of everything. It means we can work together, and we have a voice together. Working with other providers, in Tameside where we’re based, technically there is no single site provider as we’re part of a village that raises children.’