Primary concern

When the Government gave the green light to schools to develop full daycare on site as part of a package of extended services, the schools were urged to work with local private providers and not duplicate provision.

However, research by the National Day Nurseries Association (NDNA) suggests that many private providers are being excluded, with occupancy levels falling and gathering evidence that they are losing out to competition from children's centres and schools, whose childcare seemed to offer them a tantalising lifeline in an increasingly harsh competitive market.

In some areas, such as East Anglia and Solihull, Birmingham, there is evidence of harmonious working between private providers and schools. But in other areas there have been allegations that schools have pressured parents into taking up their daycare places with a promise of a school place.

So, is the tendency of some schools to set up their own childcare sounding the death knell for many private providers? Or should providers be more pro-active in seeking local alliances and turn a perceived threat into a potentially sound commercial opportunity?

Answers to both questions vary depending on where in the country you look.

This reflects what NDNA chief executive Purnima Tanuku identifies as a lack of uniformity in the way local authorities interpret DfES guidance on the issue.

If local authorities' market management role, set out in the Childcare Bill, is to mean anything, then she believes there should a national framework of standards, with an emphasis on long-term contracts that are based on partnership and applicable to all councils.

Falling rolls

Mary Graveney, of the South Gloucestershire private day nurseries association, says that falling school rolls - with some having barely half their capacity in infant classes in her area - are 'utilising that space which is not required and turning it into daycare, with the hope that those children carry on in the school and they can retain their numbers'.

The same process is identified in Sunderland, where nursery owner Stewart Hindmarsh says that schools 'reaching down' to take ever-younger children is cutting across existing nursery provision and threatening the livelihoods of owners. He derides local authority plans to create a further 500 childcare places when there are more than 500 current vacancies.

He questions whether schools are the right environment for very young children and warns that the growing school-run daycare will also threaten Government-funded initiatives such as children's centres and Sure Start facilities.

Norma Hardy, Sunderland early years and childcare manager, says that the 'quite high targets' set for new childcare places under the first phase of the children's centre programme had made some of the city's long-established private providers feel 'nervous and threatened'.

But she adds, 'Our private providers were just not keen on establishing any new places. Their view was that they had the provision and we should use them. But, of course, the targets said otherwise and, I think, the evidence is otherwise. We have quite low density levels of childcare places in some areas.'

Open dialogue

In Solihull the foundation for successful partnership working between schools and private providers has been 'an honest and open dialogue', according to early years and childcare services manager Teresa Scragg.

The local authority has several privately-run nurseries on schools sites, and Ms Scragg says, 'We believe in a mixed economy of provision that supports parental choice and ensures a level playing field across the sector.'

Schools have been encouraged to work with private providers where possible, rather than being 'the delivery agent', and have been told they will not get financial backing for new daycare where provision exists.

Both private providers and headteachers have been present when discussions took place about the creation of neighbourhood nurseries on school sites, Ms Scraggs says. 'Everybody hears about things at the same time and there are opportunities to raise issues and discuss what might be challenges. We are a small authority, so the links are perhaps more personal and that makes them easier.'

Janette Price, who runs Beechwood Childcare, operates four nurseries on schools sites in Solihull, but has had a mixed experience in Warwickshire, with one nursery running smoothly but another closed after its contract was terminated by a school.

Ms Price says, 'Some schools are using the excuse that they need to set up their own daycare as part of the Government's extended schools programme.

My understanding of that is that they should be working with existing providers. But some see it as a carte blanche to do what they like.'

Teresa Scragg says that while headteachers may see commercial opportunities in developing their own provision, she believes they are mainly taking greater interest in childcare because they recognise that quality early experiences can have a beneficial impact on a child's social and education development. Heads are also concerned about the quality of childcare and how it will be viewed under the new Ofsted inspection framework.

Essex County Council funds a worker for the county's day nurseries'

association to ensure that the private sector is drawn into the plans of the early years partnership. Liz Hagon, a development team mentor in North Essex, says, 'If anyone in the private sector says they are worried, we can immediately address their concerns because we have that relationship.'

She says that the threat of oversupply of places was not posed in the first round of children's centres because many rural disadvantaged areas in the county had little in the way of daycare provision. She concedes that greater care will need to be taken in the second phase, when 55 children's centres are planned, as they are in less disadvantaged areas where there is likely to be nursery provision already.

Keely Hogben, who runs Nannas day nurseries in Essex, opened her first daycare facility in a caretaker's house on a school site in 2003. Its places were filled within five months - and she has repeated the winning formula in a secondary school.

Ms Hogben says, 'It would very unfair if private providers in Essex said they had not been given the opportunity to get involved, because tenders have gone out and we were invited to lots of meetings.'

She believes her previous career in sales and marketing has stood her in good stead. 'I don't think we come across as a private provider because we have always been involved in loads of community programmes, including the early years partnership,' she says. Participating in the centre leadership programme, she found strong support for privately-run childcare on school sites among the cohort of 40 students, who included heads of Government-funded initiatives.

'Schools need private providers as much as private providers need schools,'

she adds, pointing out that if a school runs its own childcare the relationship with parents acquires a commercial dimension. She questions whether most schools want this or 'have enough support mechanisms in place to offer that care'.

Challenge or opportunity

Ross Midgley, a director of the Essex-based Crocus Early Years Centre, is even more strident in his criticism of fellow private providers. The former accountant, who runs two school-based nurseries with his wife Alison, says, 'I have not come across the same level of whingeing in any other sector I have been involved in. There are instances where children's centres and extended schools present challenges to the private sector, but equally they are opportunities. Some of our colleagues just seem to go on as if the Government and the schools owe them a living.'

Most local authorities will realise once they have seen there is already high-quality provision in an area that it would be 'stupic not only politically but also economically to try to set up in direct competition', he adds.

In Sunderland, Norma Hardy says the early years service is using some of its sustainability funding to get headteachers and their staff to come out into the community and visit local providers 'to try to build those relationships', particularly around provision of out of school care.

It is clear that for every provider who has successfully linked up with schools to supply full daycare, there are many more who feel excluded and threatened. Their anxiety is sure to be heightened as Government proposals for every school to offer care from 8am to 6pm become a reality. NW