Its birth signalled the Government's intent to help the most disadvantaged with childcare. But as it took its first steps doubts were raised about the long-term viability of the Neighbourhood Nurseries Initiative (NNI) as the Government only promised to nurture it through the first three years of its life. Once weaned off Government support, some of the UK's biggest nursery chains fear the initiative will fail as bureaucratic hurdles and the chill wind of commercial unviability discourage them from taking part.
And yet the Department for Education and Skills (DfES) is buoyant. It claims that by the end of June 39,000 NNI places were 'in development' - the figures were due to be updated at the end of September and published sometime this autumn. A spokesperson for the DfES says, 'Progress over the past six months looks very encouraging towards the planned delivery of 45,000 places open in disadvantaged areas by March 2004. The participation of nursery chains has been very much welcomed by the NNI.
'Some nursery chains initially were concerned about the long-term sustainability of neighbourhood nurseries in disadvantaged areas. Most are more confident now about the Working Families Tax Credit (WFTC) and other support mechanisms to enable their projects to succeed.'
According to the DfES, 19,000 of the 39,000 places in development are in 1,090 projects in the private sector. But, despite the DfES's claim of increasing involvement among chains, most of the financial backing so far from the New Opportunities Fund (NOF) to develop neighbourhood nurseries has gone to community-based, single-site ventures. And only about 1,000 places in 36 sites are actually open.
In its draft prospectus for the NNI published earlier this year the DfES said that while decisions would be made locally, central government would act as a 'broker' to 'ensure local processes are open to local and national organisations, from maintained, voluntary and private sectors and cut down the administrative burden for potential providers'.
But some of the larger chains complain that the good intentions voiced by the DfES have not been translated into practice at local level, and that their efforts to become involved in the NNI have been stymied by bureaucratic decision-making processes. Peter Aughterson, a director of Asquith Court, says that it has had 'reasonable feedback' from a dozen Early Years Development and Childcare Partnerships (EYDCPs) after writing to all 150 of them following the creation of its joint venture with Jarvis, the international facilities management and infrastructure group - but nothing has yet been signed and sealed. Getting large chains involved is the only way to ensure a long-term sustainable future for the initiative, Mr Aughterson believes, but he points out that devolving decision-making to local level has proved an obstacle.
He says, 'The last thing we want to do is to patronise what's going on at local level. But the reality is that this is an incredibly labour- and capital-intensive business and you need to be in a position to raise serious money because you have to train and retain staff. The EYDCPs need to look at us as another source of capital - but one that also brings management expertise.
'We're trying to do something quasi-charitable because we wouldn't normally invest in disadvantaged areas as a business opportunity. We're saying to the Government and the EYDCPs that we are prepared to accept lower than normal returns and we think a large group like ours should be involved, but we can't do it without help.'
Stewart Pickering, a director of Cheshire-based Kidsunlimited, says it offers a proportion of discounted places to local people at a nursery in Hulme, Manchester, under a scheme to help the disadvantaged which pre-dates the NNI. But the chain 'would not chase the NNI' because 'opening up a nursery in a disadvantaged area does not stack up commercially'.
He adds, 'I get the impression that local groups are more involved in the NNI and we'll have to see how viable they are in three years' time.'
However, this scepticism is not shared by a smaller chain in the northwest, Wind in the Willows, which is embracing the initiative and sees it as a potential springboard for dynamic growth rather than a business risk. The Merseyside-based chain has just four nurseries now, but co-director Ginny Taylor feels that with links being forged with 12 EYDCPs from Middlesbrough to Ipswich, and the possibility of two or three NNIs in each of them, 'we could become a much larger chain through this initiative'.
So far Wind in the Willows has 1,200 NNI places in the pipeline, with a 70-place neighbourhood nursery up and running in Dudley and two successful applications for NOF finance under its belt for a new nursery at Newton-le-Willows and a refurbishment in Middlesbrough. 'We've always worked in areas of disadvantage and see the NNI as additional to what we are doing. As far as sustainability is concerned we operate to tight business plans and are therefore confident,' says Ms Taylor.
Karen Walker, co-director of The Children's Place in west Yorkshire, exudes the same confidence about her chain's involvement in the NNI. Developing local links with Sure Start programmes and the fact that the chain is rooted in areas where traditional industries have been decimated mean that it has been well placed to become 'heavily involved' in the NNI.
With three nursery projects underway, two in Bradford and one in Kirklees, she says, 'The NNI has given us the ability to broaden our appeal. We are getting extra revenue to introduce translators and that is helping us build up our base among ethnic minorities.'
This enthusiasm for the NNI was matched at Jigsaw initially but it cooled as the chain ran into what chief executive Mike McKechnie describes as 'a slightly unbalanced and bureaucratic approach'. While the chain is pursuing its interest in two potential sites in Portsmouth and Oxford, he says there is 'too much idealism and not enough commercial realism' in the way EYDCPs and local authorities are administering the scheme at local level.
He acknowledges that local decision-making is vital but warns, 'What is missing is a convincing, overarching context for people to work in. This is a high-risk scheme, we are trying to change something - disadvantage - and there's no point in doing it with a small-minded approach.'
He was irritated when Jigsaw was told to make sure that it was marketing NNI places properly. 'With all due respect no-one can tell us how to do marketing. Because this initiative is asking us to take a commercial risk I don't see why we have to jump through 65 hoops to get funding.'
The charge of too much local bureaucracy is also levelled by Just Learning managing director Michael Fallon, who believes that EYDCPs should have 'shown more pragmatism and worked with the well-financed chains to make big investments'. The chain has registered interest in a number of potential NNI ventures, but nothing concrete has emerged so far. 'We regard five- to seven-year contracts to be too short a timespan,' he adds. 'We have been put off locally by bureaucratic, pre-qualification demands.'
Large chains are not the only victims of what they regard as bureaucratic manoeuvring. The small Pear Tree Nursery Group in Aldershot, Hampshire, spent 18 months in consultation over the creation of a wood-framed building at its Heronwood site only to be told that additional infrastructure was needed which meant the project was no longer economically viable.
But generally when it comes to negotiating the hurdles of local decision-making it seems that smaller chains, which have their roots already embedded in disadvantaged areas, are better placed to forge the necessary partnerships to secure funding. As Karen Walker explains, 'It is vital to have that connection at local level and know what strategy the EYDCP is working on. If you're a big chain working from a head-office base, it's much harder to know what is happening on the ground.'
But, with such a tight, three-year incubation period, as Mr Aughterson says, 'The jury is still out on whether NNI is sustainable and can become a successful part of the Government's bid to rescue communities from poverty.'
