The total numbers of providers, places and children attending childcare and early years provision all continued on their upward trend in 2007, according to the Government's latest providers' survey. But loss-making settings, and problems in delivering the extended free entitlement, still threaten the long-term success of the Government strategy.
The oint chief executive of Daycare Trust, Alison Garnham, says, 'Issues of quality and sustainability leap out from these figures, showing a high proportion of providers merely breaking even or operating at a loss, and although it is great to see more staff gaining qualifications, pay levels remain a scandal, acting as a break on quality in the childcare and early years sector.'
Here, we offer a snapshot of the sector and highlight some of the most significant findings.
FULL DAYCARE AND CHILDREN'S CENTRES
Less than a third (30 per cent) of full daycare providers made a profit or surplus in 2007, well below the 43 per cent figure for 2003. The worst affected were providers within children's centres, with only 7 per cent of these making a profit, and 52 per cent operating at a loss (up from 37 per cent in 2006).
To blame, says Pre-school Learning Alliance chief executive Steve Alexander, is 'inconsistent intervention in the childcare "market"'.
Most children's centres (77 per cent) are in deprived areas, where, says Mr Alexander, 'the policy drive of getting parents into work through the provision of childcare has not yet resulted in demand for the large amounts of additional childcare being established in areas of deprivation. This challenges the sustainability of the provision and is a prime example of market interference.'
SESSIONAL CARE PROVIDERS
The decline in sessional care continued in 2006, with provider numbers falling 9 per cent, children numbers dropping by 8 per cent, and staff numbers decreasing by 7 per cent. This latest fall brings the total decrease in provider numbers between 2001 and 2007 to 39 per cent.
The survey notes that in 2007 a quarter of full daycare providers (24 per cent) said that they had changed from offering sessional care, and two-thirds (64 per cent) said the decision was due to parental demand for longer hours of childcare.
Sessional providers, however, managed to buck the trend in profitability, with 30 per cent operating at a profit in 2007, compared with 25 per cent in 2006.
Mr Alexander challenges the report's conclusion that sessional care is in decline, arguing that many sessional pre-schools are adapting to meet the needs of local families by becoming full daycare providers.
He says, 'The popularity of this type of provision among parents of three-year-olds who only want to use the free entitlement is clearly shown by the high percentage of income for sessional groups from local authority sources.
'Ongoing demand for sessional care is further evidenced by it showing the greatest improvement in profitability and the least number of vacancies.'
HOLIDAY CLUBS AND AFTER-SCHOOL CLUBS
After a massive expansion between 2003 and 2006, when holiday club numbers rose by 129 per cent and place numbers by 117 per cent, the rise turned to a fall in 2006-07.
Decreases were registered in the numbers of providers (down 9 per cent), places (down 13 per cent) and children attending (down 16 per cent). The number of vacancies for children averaged 30 per cent, and that of paid and unpaid staff dropped by a quarter.
An upward trend in after-school care continued in 2007, though staff numbers (paid and unpaid) fell 8 per cent and vacancies for children averaged 25 per cent.
The number of loss-making after-school clubs rose to 24 per cent (from 17 per cent in 2006), while those in profit remained stable at 24 per cent. Holiday clubs making a profit rose to 27 per cent (up from 19 per cent in 2006).
Ms Garnham says, 'Hot on the heels of local authority sufficiency assessments, both the lack of, and even the noticeable decline in, holiday provision jump out from these figures as a worrying new trend and confirm everything that parents have been telling us in Daycare Trust's recent Holiday Costs Survey 2008. This is not good news for the parents and children who desperately need there to be more places.'
CHILDMINDERS
The number of working childminders increased 3 per cent in 2007, raising the total from 57,900 to 59,800. Much greater, however, was the number of registered childminders, though it fell 3 per cent from 71,500 to 69,200.
Also rising were the number of registered places with childminders, up from 275,600 in 2005 to 291,500 in 2007 - an increase of 6 per cent. This brought the average number of places per childminder to 4.9, but childminders reported the highest proportion of vacancies for children nationally, at 29 per cent.
MAINTAINED SCHOOLS
The survey reports huge increases in staff numbers in schools in 2007, with rises ranging from 9 per cent in nursery schools to 24 per cent in schools with both reception and nursery classes. The number of children attending also increased, reversing the 2003-06 trend, when overall staff and child numbers both fell.
Surprisingly, given nursery school closures over the past decade, the survey found that between 2003 and 2007, their numbers had remained stable, while place numbers rose by 6 per cent.
PAY
A predictable divide between rates of pay emerged between those working in schools and those in a childcare setting. Children's centre staff averaged £9.30 an hour, compared with £6.90 in all full daycare settings (only a 1 per cent rise on 2006), while the all-staff average for nursery schools was highest at £13.00 (and nursery nurses averaged £10.40 an hour). Senior managers averaged £9.80 in full daycare settings, £14.30 in children's centres and £8.70 in sessional providers.
Notably, a link has emerged between the rates of pay and qualification of the most senior superviser, with staff in graduate-led settings enjoying higher average hourly rates than those working under non-graduate senior supervisors. In children's centres this translated to £10.30 an hour compared with £8.70, while in all daycare settings, the averages were £7.80 and £6.80.
Chief executive of the National Day Nurseries Association (NDNA), Purnima Tanuku, says, 'It is interesting to see that in graduate-led settings other staff enjoyed higher salaries. Although increased pay is to be welcomed, NDNA does question how private and voluntary nurseries will be able to afford the cost of a graduate, and higher salaries for the rest of the team, without large fee increases.' More direct investment will be needed, she says.
QUALIFICATIONS AND TRAINING
The number of full daycare staff with a level 3 qualification rose sharply between 2003 and 2006 (from 52 per cent to 64 per cent). That figure then dipped by 3 per cent in 2007 (to 61 per cent), but rose by the same amount for childminders (up from 33 to 36 per cent). The survey also found that one third (32 per cent) of daycare staff and one fifth (21 per cent) of childminders are working towards a qualification.
Commenting on the level 3 increase for childminders, a National Childminding Association spokesperson says, 'This is an encouraging result, but support from local authorities and funding would help to increase the numbers of registered childminders achieving a level 3 or above, as would increasing childminders' access to dedicated quality improvement networks.'
As for nursery schools, Early Education chief executive Anne Nelson says, 'I believe that the statistics in the report reinforce what we knew already - that quality early years education is dependent on a well-qualified workforce.'
The survey also confirmed the shortcomings of the Transformation Fund. Most full daycare providers (83 per cent), sessional providers and childminders were aware of the money to help staff achieve a full level 3, 4 or 5 qualification. However, only 31 per cent of full daycare providers received this funding. For sessional providers, the figure was 27 per cent and for childminders, 18 per cent.
FREE ENTITLEMENT
Full daycare providers have proved their flexibility, with most already offering the entitlement over three, rather than five, sessions. Percentages ranged from 83 per cent (for voluntarily run full daycare settings) to 75 per cent (for local authority run settings).
In contrast, only 25 per cent of nursery schools and 18 per cent of primary schools with nursery and reception classes said sessions could be taken over three days.
A similar divide emerged over the extended free entitlement of 15 hours a week, for 38 weeks a year. While most full daycare and sessional providers (90 per cent and 67 per cent) said they could offer this entitlement, the figures for the maintained sector were only 58 per cent for nursery schools (down from 64 per cent in 2006) and 53 per cent of primary schools with nursery and reception classes (down from 65 per cent in 2006).
Ms Tanuku says, 'NDNA welcomes how this survey shows the strong position of full daycare providers in being able to deliver a flexible 15-hour offer. However, with providers still facing issues with underfunding in this area, NDNA is concerned that only 30 per cent of full daycare providers are making a profit, and 33 per cent are just covering costs. This is not sustainable for the sector.'
More information:
Childcare and Early Years Providers Survey 2007, produced by the British Market Research Bureau on behalf of the DCSF, can be downloaded in full from: www.dcsf.gov.uk/research/
CHILDCARE AND EARLY YEARS PROVIDERS SURVEY
YOUR AT-A-GLANCE GUIDE TO THE EARLY YEARS SECTOR
PROVIDERS Full day Children's
care centres
No of providers 13,600 950
Rise/fall in providers +7%/+36% +18%/NA
2006-07/2003-07
PLACES
No of Ofsted registered 596,500 51,100
places (2007)
Rise/fall in registered +10%/+38% +36%/NA
places 2006-07/2003-07
Mean no of Ofsted registered 44 54
places
Ownership of Ofsted registered private 70% private 16%
places among childcare providers voluntary 16% voluntary 18%
maintained* 11% maintained* 61%
No of children attending 820,100 68,400
Rise/fall in no of children +7%/+26% +71%/NA
attending 2006-07/2003-07
Average % of vacancies for 18%/15% 17%/18%
children 2007/2006
* Maintained - local authority,
school/college, other
STAFF/PAY
No of paid staff 154,600 13,300
% rise/fall in no of paid staff +7%/+39% +42%/NA
2006-07/2003-07
Average hours worked per week 33 34
Average hourly pay (all staff) £6.90 £9.30
% rise in average hourly rate +1%/+20% 0%/NA
2006-07/2003-07
Average hourly rate by £6.80/ £8.70/
qualification of senior manager: £7.80 £10.30
graduate led/graduate led
% staff with level 3 qualification 61% 61%
% staff with at least level 5 6% 14%
qualification
% receiving Transformation Fund 31% 31%
money to help staff achieve
levels 3-5
Staff turnover rates 15% 11%
PROFITABILITY/FUTURE
Average hourly fee £3.20 £3.00
% providers receiving fees paid 85% 82%
for in part or full by parents'
employers
% offering free entitlement over 80% 75%
3 days
% that can provide extended 90% 85%
entitlement
% with business plan 2006/2007 80%/76% 87%/86%
% that have expanded in last year 16% 19%
% that plan to expand in the next 16% 8%
year
Profitability 2007/2003: making a 30%/43% 7%/NA
profit
Covering costs 33%/27% 24%/NA
Operating at a loss 18%/12% 52%/NA
Don't know 19%/18% 17%/NA
PROVIDERS Sessional After-school
clubs
No of providers 8,700 8,500
Rise/fall in providers -9%/-26% +11%/+87%
2006-07/2003-07
PLACES
No of Ofsted registered 248,100 259,000
places (2007)
Rise/fall in registered -11%/-24% +1%/+57%
places 2006-07/2003-07
Mean no of Ofsted registered 28 31
places
Ownership of Ofsted registered private 28% private 44%
places among childcare providers voluntary 65% voluntary 24%
maintained* 6% maintained* 33%
No of children attending 356,800 414,300
Rise/fall in no of children -8%/-24% +2%/+52%
attending 2006-07/2003-07
Average % of vacancies for 13%/11% 25%/21%
children 2007/2006
* Maintained - local authority,
school/college, other
STAFF/PAY
No of paid staff 54,200 46,100
% rise/fall in no of paid staff -7%/-22% -5%/+81%
2006-07/2003-07
Average hours worked per week 18 18
Average hourly pay (all staff) £7.00 £7.60
% rise in average hourly rate +6%/+30% +5/+29%
2006-07/2003-07
Average hourly rate by £6.80/ £7.30/
qualification of senior manager: £8.60 £9.50
graduate led/graduate led
% staff with level 3 qualification 52% 43%
% staff with at least level 5 6% 7%
qualification
% receiving Transformation Fund 27% -
money to help staff achieve
levels 3-5
Staff turnover rates 11% 23%
PROFITABILITY/FUTURE
Average hourly fee £2.30 £2.60
% providers receiving fees paid 44% 77%
for in part or full by parents'
employers
% offering free entitlement over 37% -
3 days
% that can provide extended 67% -
entitlement
% with business plan 2006/2007 56%/53% 70%/71%
% that have expanded in last year 12% 16%
% that plan to expand in the next 14% 19%
year
Profitability 2007/2003: making a 30%/28% 24%/29%
profit
Covering costs 47%/56% 42%/42%
Operating at a loss 14%/11% 24%/19%
Don't know 9%/5% 11%/10%
PROVIDERS Holiday Childminders
clubs (working)
No of providers 5,800 59,800
Rise/fall in providers -9%/+108% +3%/NA
2006-07/2003-07
PLACES
No of Ofsted registered 230,300 291,500
places (2007)
Rise/fall in registered -13%/+89% +7%/NA
places 2006-07/2003-07
Mean no of Ofsted registered 40 4.9
places
Ownership of Ofsted registered private 42% -
places among childcare providers voluntary 29% -
maintained* 29% -
No of children attending 297,700 278,500
Rise/fall in no of children -16%/+27% +4%/NA
attending 2006-07/2003-07
Average % of vacancies for 30%/29% 29%/24%
children 2007/2006
* Maintained - local authority,
school/college, other
STAFF/PAY
No of paid staff 45,400 -
% rise/fall in no of paid staff -18%/+107% -
2006-07/2003-07
Average hours worked per week 29 -
Average hourly pay (all staff) £7.60 -
% rise in average hourly rate +3%/+23% -
2006-07/2003-07
Average hourly rate by £7.40/
qualification of senior manager: £8.70
graduate led/graduate led
% staff with level 3 qualification 40% 36%
% staff with at least level 5 10% 3%
qualification
% receiving Transformation Fund - 18%
money to help staff achieve
levels 3-5
Staff turnover rates 22% -
PROFITABILITY/FUTURE
Average hourly fee £2.20 £3.60
% providers receiving fees paid 81% 55%
for in part or full by parents'
employers
% offering free entitlement over - -
3 days
% that can provide extended - -
entitlement
% with business plan 2006/2007 80%/76% 26%/38%
% that have expanded in last year 15% 12%
% that plan to expand in the next 17% 17%
year
Profitability 2007/2003: making a 27%/27% -
profit
Covering costs 39%/42% -
Operating at a loss 24%/22% -
Don't know 10%/8% -
PROVIDERS Nursery Schools with Schools with
schools nursery and reception but
reception no nursery
No of providers 450 6,800 8,900
Rise/fall in providers 0%/0% +4%/+7% -3%/-3%
2006-07/2003-07
PLACES
No of Ofsted registered 28,400 533,000 306,300
places (2007)
Rise/fall in registered +1%/+6% +12%/+7% +7%/-5%
places 2006-07/2003-07
Mean no of Ofsted registered 65 79 35
places
Ownership of Ofsted registered - - -
places among childcare providers - - -
- - -
No of children attending 38,300 517,800 263,200
Rise/fall in no of children +6%/+7% +2%/+9% +5%/-5%
attending 2006-07/2003-07
Average % of vacancies for 5%/7% 11%/10% 14%/15%
children 2007/2006
* Maintained - local authority,
school/college, other
STAFF/PAY
No of paid staff 5,000 52,300 38,600
% rise/fall in no of paid staff +9%/+15% +22%/+19% +24%/+13%
2006-07/2003-07
Average hours worked per week 31 29 27
Average hourly pay (all staff) £13.00 £12.70 £12.70
% rise in average hourly rate +6%/- +2%/- +5%/-
2006-07/2003-07
Average hourly rate by - - -
qualification of senior manager:
graduate led/graduate led
% staff with level 3 qualification 44% 35% 22%
% staff with at least level 5 36% 40% 49%
qualification
% receiving Transformation Fund - - -
money to help staff achieve
levels 3-5
Staff turnover rates 5% 6% 5%
PROFITABILITY/FUTURE
Average hourly fee - - -
% providers receiving fees paid - - -
for in part or full by parents'
employers
% offering free entitlement over 25% 18% -
3 days
% that can provide extended 58% 53 -
entitlement
% with business plan 2006/2007 - - -
% that have expanded in last year - - -
% that plan to expand in the next - - -
year
Profitability 2007/2003: making a - - -
profit
Covering costs - - -
Operating at a loss - - -
Don't know - - -
