Filling places and balancing the books in an increasingly competitive nursery market is difficult. One income-boosting solution for nursery owners is to offer out-of-school care.
With the Government's extended schools initiative aiming to ensure that all primary and secondary schools offer some form of out-of-school childcare throughout the year, it is a booming area. Market analyst Laing and Buisson estimates that the out-of-school childcare market is worth an estimated Pounds 395m (see box).
National Day Nurseries Association chief executive Purnima Tanuku says, 'Boosting income is an important issue for all day nurseries because they operate in challenging circumstances. By providing out-of-school care, managers get to diversify and meet the needs of families long term.'
Miranda Walker, owner of ABC Day Nursery and Playtime Out-of-School Club in Cullompton, Devon, agrees. 'We are not holding children for as long as we used to because schools are taking them younger. Having the club helps us to stay financially viable,' she says.
But Peter Graham, director of Active Childcare in Wrexham, is cautious. 'We do not take the view that the clubs make a massive difference to profits.
We provide a wider service for parents and this interconnection may be a boost for how parents deal with all their childcare arrangements. It can strengthen the viability of all the nursery provision.'
Nursery owners must be careful to research the viability of out-of-school care and draw up a detailed business plan, which should include looking thoroughly at what provision is already in the area and what parents want.
'It is important to plan it very carefully and not jump into providing out-of-school care,' says Ms Tanuku.
On location
Once demand has been established, it is necessary to consider where the out-of-school provision will be based - in the nursery itself, hired premises, or on a school site. Paul Edwards, managing director of Earlyworld Nurseries in Shropshire has experience of them all.
He says, 'When the nursery needed the space back because of extra childcare places we used a community hall, but we found the premises restricting because of its other uses. We then moved to a local school who were very helpful, but the club was moved as the school's needs changed.'
The solution was to have a purpose-built building on school premises, in partnership with schools.
Now, Mr Edwards says, 'All our four clubs are on school sites in purpose-built premises with a long-term lease which gives us security. A short-term lease runs the risk of building a business and then having the school take it away.'
Mr Graham runs a club in his nursery premises but has taken care to make it self-contained. 'We cater for children up to 11 years and the separation is good psychologically for them because they do not want to be seen as babies attending nursery,' he explains.
If sharing hired premises, it is likely that equipment will need to be packed away after each session and storage space can be limited. Miranda Walker has a trailer in which to store and transport easily the toys and resources. As for the actual resources, she warns, 'Anyone who presumes that their nursery equipment will be suitable for both the nursery and out-of-school children is mistaken.' Toys, games and arts and crafts equipment should be tailored to school-age children.
On board
If the club is not on a school site, then transporting the children has to be carefully thought out. It can be costly and care has to be taken with licensing the vehicles and drivers. This was a problem Market Harborough Nursery School faced this term when it found that the drivers did not have the correct licences. There was no other means of transporting the children and the club was forced to close at short notice.
When ABC Day Nursery first opened the club, they found it hard to justify the collection cost. Miranda Walker says, 'There were some days when only one child was collected from a school but we would still have to send two members of staff. The price of that put the care out of line with childminders who can pick up children on their own.
'This had big implications and we sometimes lost money but we had grant funding and were able to ride it out while numbers rose. It was the end of the first year before we started to break even.'
In partnership
Purnima Tanuku recommends working closely with schools to ensure that they do not duplicate services.
Westfield Day Nursery in Easingwold, York had its out-of-school care threatened five years ago when a local primary school opened provision without consulting them. 'It had a big effect on us for about a year but then the numbers did pick up again,' says owner Judith Tubb. 'Fortunately parents could see that our club was of a high standard. We also offer the children a cooked meal when they arrive from school. This helped to keep the children with us. 'Nursery owners looking at providing out-of-school provision should see what they can do that is better than the competition.'
Peter Graham says, 'Nursery and out-of-school provision are interdependent and any rival provision can threaten the way in which services connect.
Together they can be viable but taking a section away can affect viability - if there is not enough uptake of babies then the children may not feed through.'
Providing after-school and holiday care also goes hand in hand. 'The holiday club is definitely profitable. The after-school provision just breaks even,' says Miranda Walker. 'Despite this we definitely need to run it through term time because otherwise we'd lose children for the holiday club and also have problems with recruiting staff.'
At 1:8, ratios are lower in out-of-school provision than nurseries, but staff recruitment can be tricky because of the hours - often a couple in the morning and evening during term-time and then full time during holidays. At Active Childcare the problem of recruitment has been eased by employing staff to work both in the nursery and club. The staff rotas are carefully arranged to provide convenient blocks of hours. Peter Graham ensures that the staff receive training that equips them to work with both age groups. He says, 'Managing the children is very different. We believe the out-of-school provision is not an addition to nursery or school, it is a very different thing.
'The challenge is to provide a safe, stimulating and engaging environment so that the children want to come back.'
State of the market
The Out of School UK Market Report 2006 by Laing and Buisson found:
* The UK out-of-school childcare market is now worth an estimated 395m - five times as much as in the early 1990s
* Term-time provision generated 265m income in 2005
* School holiday provision generated 130m in 2005. l Private individuals in the UK spent an estimated 320m (81 per cent of total market income) on out-of-school care in 2005, just over one-fifth of this was subsidised through tax credits
* Average fees paid during term time are estimated at 5.72 for a daily after-school session and 3.16 for before school
* A full day during the holidays was estimated to cost 13.90 on average.
To order a full copy of the report, priced 400, visit www.laingbuisson.co.uk
Useful tips
When considering setting up out-of-school provision, Peter Graham, director of Active Childcare, recommends:
* Establish a professional and open relationship with the heads and governors of local schools
* Find out the local schools' future intentions before committing to the expenditure of opening out-of-school provision
* Don't underestimate the cost of transport and ensure there is a back-up plan in place
* When appointing staff, look at the bigger picture and plan for them working across the age ranges
* If there is a separate room in your nursery premises used just by the club, think about how it can be used during term time to support what goes on in the nursery - it could open up opportunities for group sessions with younger children. But remember it won't be available during school holidays
* Undertake a quality assurance scheme. Self-analysis against demanding criteria can lead to continuing professional development.
