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Home > Financialisation and private equity in early childhood care and education in England

Financialisation and private equity in early childhood care and education in England [1]

Author: 
Simon, A., Shah, A., Quy, K., & Owen, C.
Source: 
Journal of Social Policy
Format: 
Article
Publication Date: 
13 Jun 2022
AVAILABILITY
Access online [2]
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Abstract

The Government in England contributes an estimated £3.9 billion funding to support childcare and education for three- and four-year olds and for some two-year olds. A significant proportion of this money is spent on private sector childcare. However, little is known about how the money paid to companies providing private sector childcare is used. Through a cross-case analysis, the financial accounts of a sample of medium-to large private ‘for-profit’ childcare groups were compared with some ‘not-for-profit’ childcare providers. We found that for the for-profit companies, a considerable amount of money is being extracted for debt repayment and relatively little goes into staff wages. We found that large private for-profit nursery groups predominately use ‘private equity’ models which are characterised by borrowings and debt, with a focus on short-term financial returns. This ‘for-profit’ financial operating model arguably risks the sustainability of provision in the sector. Reformed regulation and transparency in the accounting of such providers and a consideration of alternative ‘not-for-profit’ financial models could provide greater stability and resilience.

Related link: 
Childcare sector in England must not become ‘playground for private equity’, experts say [5]
Region: 
Europe [6]
Tags: 
financialisation [7]
privatization [8]
for-profit [9]
private equity [10]
equity [11]

Source URL (modified on 9 Aug 2023):https://childcarecanada.org/documents/research-policy-practice/23/08/financialisation-and-private-equity-early-childhood-care

Links
[1] https://childcarecanada.org/documents/research-policy-practice/23/08/financialisation-and-private-equity-early-childhood-care [2] https://www.cambridge.org/core/journals/journal-of-social-policy/article/financialisation-and-private-equity-in-early-childhood-care-and-education-in-england/AC0B8FA41A918CBA3DBB4248928287F5 [3] https://www.cambridge.org/core/services/aop-cambridge-core/content/view/AC0B8FA41A918CBA3DBB4248928287F5/S0047279422000484a.pdf/financialisation-and-private-equity-in-early-childhood-care-and-education-in-england.pdf [4] https://childcarecanada.org/sites/default/files/Financialisation%20and%20private%20equity%20in%20early%20childhood%20care%20and%20education%20in%20England.pdf [5] https://childcarecanada.org/documents/child-care-news/23/08/childcare-sector-england-must-not-become-‘playground-private-equity’ [6] https://childcarecanada.org/category/region/europe [7] https://childcarecanada.org/taxonomy/term/9228 [8] https://childcarecanada.org/category/tags/privatization [9] https://childcarecanada.org/category/tags/profit [10] https://childcarecanada.org/taxonomy/term/9343 [11] https://childcarecanada.org/category/tags/equity