A report, Social Enterprise: a childcare solution for London?, by think-tank Capacity, said community nurseries are helping families financially by setting fees below market level, discounting rates for poorer families and sometimes letting parents make part-payment by taking on voluntary jobs.
The nurseries were also praised for providing flexible childcare and providing additional forms of family support, for example, by allowing parents to attend college training or helping with parenting.
The study focused on eight childcare projects including a playgroup, a family centre, a group childcare provider and five community nurseries based in disadvantaged areas of London.
It found childcare projects face constant financial insecurity with the loss of Neighbourhood Nursery Initiative grants and a shortfall in nursery education funding. Other projects have faced large increases in council rent, including the Westminster Children's Society, which had to close one of its settings.
June O'Sullivan, chief executive of the Westminster Children's Society, said, 'We are not asking for hand-outs, but we are social enterprises and the council should not put us on the same footing as a commercial business.'
The study criticised the Government for giving little thought to long-term sustainability, focusing almost exclusively on quality assurance. It also suggested that local authorities should encourage childcare providers to act as social enterprises and guarantee affordable rents to those based on council property.
Margaret Lochrie, director of Capacity and author of the report, said, 'From the Government there has been no concentration on business models, but there is no point in children's centres providing fantastic quality childcare if there is no sustainability.
'These eight projects provide 313 affordable childcare places and employment for 118 people and have improved the welfare of children, families and local communities. This must be a model worthy of support'.
Further information: The report can be downloaded at www.capacityltd.org.uk.
