Excerpts
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Why Ofsted regulation in private childcare is vital
Ofsted’s original remit was to oversee the standards of free public sector education, but it has subsequently taken on the inspection of market-based childcare services that are part-subsidized by government.
The childcare market is heavily subsidized by Government, but it is a distorted market. Our recent research (Simon et al, 2022) suggests that it is no longer competitive, flexible or innovative – the reasons for supporting it – but is badly skewed. Childcare, like many other sectors, is now dominated by large financialized companies, which fund their expansion by extensive borrowing from national and international private equity companies. This situation is volatile. Such companies continually expand and consolidate their provision through mergers and acquisitions, and turnover of ownership is rapid. The largest companies own more than 300 nurseries each. Companies are seriously in debt to their investors as well as needing to pay their shareholders dividends; the low financial reserves of these companies is risky. Over the last few years the total number of places in England has not increased despite market dynamics. The pandemic exacerbated existing market trends (Lloyd and Simon, 2022).
Childcare companies determine their policies at a company rather than local level, and their considerations are primarily in terms of financial returns. Many nursery functions are outsourced, or dealt with at a head office level, so the autonomy, flexibility and accountability of an individual nursery within the company is limited. Childcare fees are high relative to those in other OECD member states (OECD, 2020). Financialized companies typically reduce expenditure on staffing from around 80% to 55% of outgoings, but pay senior company executives (usually financiers) very generous salaries (Simon et al, 2022).
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Children with additional needs face gaps
There is ample evidence to suggest that the most disadvantaged families are the least likely to access childcare. (Albakri et al, 2018; Archer and Oppenheim, 2021). There is a particular problem about access for children with special needs and disabilities. (Griggs and Bussard, 2017). Ofsted do not monitor social intake to nurseries, or comment on the fairness of the system or distribution of places.
Staff shortages - a chronically underpaid and undervalued workforce
One of the key issues currently facing the childcare sector is staffing. Recruitment and retention of staff are generally agreed to be highly problematic. The quality of the childcare and early years workforce is essential to achieving quality provision (OECD, 2019). Several recent childcare workforce studies (Christie & Co, 2019; Bonetti, 2019; Haux et al, 2022) point to low pay, low qualifications, and relatively poor recruitment and retention, and very little unionization within the private sector childcare workforce. There is a huge divide between the pay and employment conditions of the qualified early years teachers and teaching assistants working in public provision, and the private childcare sector workforce.
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