WHAT IS THE AIM OF THE RESEARCH AND WHY IS IT FOCUSED ON THE PRIVATE SECTOR?
In the most recent DfE Childcare and Early Years Provider Survey, almost two-thirds of nurseries classified themselves as private ‘for profit’. Government investment in the early years sector is expected to total £3.45 billion in 2018. Much of this is provided as free places for two- to four-year-olds, and the majority of this funding will go to supporting childcare delivered within the private sector. That is why this sector is so important. Yet very little is known about how it operates and how it differs from the voluntary sector, which tends to be smaller scale and more community based. A common concern is that the growing for-profit private sector will prefer to locate nurseries in better-off areas and that poorer areas will not get the nursery provision they need.
Childcare businesses are described as a ‘hot market’ offering high short-term returns for investors by business intelligence consultants Laing Buisson, and yet there is little exploration of how the private sector operates. On the other hand, it can be argued that the state and voluntary sectors are in decline, and it is only these investment opportunities that are contributing to expanding provision. However, it raises questions about public accountability and equity in the delivery of services.
WHAT WILL IT INVOLVE?
There are four strands to our work:
- An overview of the sector using market research provided by and for the sector.
- A financial analysis of profit and return on capital.
- An analysis of how provision is distributed by levels of deprivation and Ofsted quality indicators.
- Case studies of nurseries to examine approaches to access, fairness, accountability and representation.
We are interested in the full range of nursery businesses, from sole entrepreneurs to major chains. We want to find out what is known publicly about the way that nurseries in this sector operate.
We will examine data held by Ofsted and the DfE about these nurseries. We will also examine information made available to parents and staff. This will be supplemented by some interviews with a sample of nurseries to augment and help us to interpret the information we gather from public sources.
GIVEN SHORTFALLS IN FUNDING, WILL YOU BE LOOKING AT THE COST TO NURSERIES AND IMPACT OF FUNDED HOURS?
The 30-hour childcare policy inevitably frames developments in the early years sector, for all types of provider, including the opening and closing of nurseries. Although we will not be examining the impact of the policy as such, we will be carrying out an important financial analysis of private sector childcare which will explore assumptions about profitability, loss and viability in the sector.
WILL YOUR RESEARCH LOOK AT PARENTS’ EXPERIENCES OF ACCESSING CHILDCARE?
The focus is the providers. We are examining information which is provided to parents but we will not be interviewing parents about their experiences of accessing childcare in the private sector, as that is beyond our resources. We will publish a final report in February/March 2020.
This research is supported by a grant from Nuffield Foundation www.nuffieldfoundation.org/private-sector-childcare-england