'Understanding Social Enterprise: A Case Study of the Child-Care Sector in Scotland' was conducted by a team from Heriot-Watt University in Edinburgh.
Questionnaires focusing on finance and management were sent to 300 voluntary childcare organisations across the country, with a return rate of 81. More than half were single-setting playgroups, followed by out-of-school clubs at 35 per cent.
One of the authors of the report, Declan Jones, director of the Social Enterprise Institute at the university, said, 'We wanted to see how much organisations saw their service as a business rather than a project and we found that the sector was fragile, particularly in a fiscal sense.'
The study uncovered some significant internal problems, for example with credit control. 'We found that not every organisation had a specific credit control policy, so there was often an ad-hoc approach to collecting money,'
said Mr Jones. 'It's a clash between the social mission of the organisation and its ability to address its financial bottom line.'
External problems were also significant worries, with many organisations expressing concern about the qualifications drive by the Scottish Executive. 'There's a need to train staff but there is a risk that those staff will move on to better salaries. Most organisations see training as a cost rather than an investment,' said Mr Jones.
Childcarers in the study also expressed concern about bureaucracy and regulations, and, particularly, the difficulty of obtaining long-term funding.
A robust business plan and strong support network is key to creating a sustainable service, said Mr Jones. 'My experience seeing and talking to people was an indicator of the dedication in the sector. But, I think, they must see themselves in competition for funding, children, staff and parental support.'
The report will available in early October at www.sml.hw.ac.uk/ socialenterprise.
