Market View : Why Labour's plans to create more early years spaces in schools is risky
Arun Kanwar
Tuesday, August 1, 2023
Arun Kanwar, managing partner at Cairneagle, on Labour's solution to staffing pressures.
Much has already been written about the reforms in the March Budget to extend the funded entitlement to under-threes. While this will undoubtedly lead to an increase in demand for places, growth is likely to be held back over the short to medium term by the sector's continued staffing challenges.
Furthermore, some physical capacity will also likely need to be built to accommodate the additional demand.
We are in the middle of a Government consultation aimed at easing these staffing pressures, and there are clearly mixed views about the trade-off between how the proposed measures might make staffing easier versus compromising quality provision.
The opposition's most recent solution is currently focused on the creation of a graduate-led workforce, and moving more early years spaces into primary schools. This may help to redeploy school teachers as enrolment declines in primaries as a result of demographics, but there are two risks.
The first is the risk of ‘schoolification’ for young children by folding early years into the existing compulsory education system, when the existing EYFS-focused infrastructure is already delivering so much in terms of children's outcomes.
The second risk is that school nurseries may be poorly equipped to deal with the specific needs of young children and parents. School nurseries have limited experience with under-twos, and tend to offer less flexible days, whereas parents will want greater flexibility and hours to suit working patterns.
It is important to ensure that this policy doesn't eventually evolve into a two-tier system between schools and private nurseries, which has been an unmitigated disaster in Scotland.
In all of our recent buyside and sellside nursery commercial due diligence work, staffing consistently ranks as one of the top two or three priorities for investors to get comfortable with.
While the M&A market has remained resilient, sellers need to be aware of the fact that they need to show a robust approach to staffing.
