Only a zero profit system creates affordable wraparound childcare

A new report (covered in today's media) argues that a cap on the cost of nursery places could be transformative for families. There is no doubt that this is true, but it conceals a bigger question – is a de facto voucher system really the best way to deliver childcare in the first place?

When the Scottish Government proposed an expansion of childcare in 2015, Common Weal set out a model for how to deliver the childcare system Scotland needed. There were four key components. First, it should be high-quality, which meant strong staff development programmes and the professionalisation of childcare practices.

Second, it would need a significantly expanded estate so new nurseries should be built based on best practice in design for early years development. Third, the care would not work for many unless it was 'wrap-around' and so fitted their family working patterns.

And finally, to deliver all of this successfully the only feasible way was to plan the provision collectively and without profit motive. Which is to say that this would only have been a genuinely effective system if it was run for the public good and not for profit.

This is something like the opposite of what the Scottish Government did. The First Minister made a speech at the time in which she said that she wanted the “money to follow the child”. This is a phrase which is a euphemism for marketisation and outsourcing. Rather than providing a service, the public provides a fee which the 'customer' can use to purchase a service.

Common Weal was told reliably at the time that Ministers wanted what was a voucher system, but that they were talked down by senior civil servants who warned that this would create deep internal conflict with both local authorities and the education system. So vouchers were dropped but the fee model remained.

That inevitably meant that none of the other recommendations were followed either. Rather than build top-quality nurseries, private providers repurposed existing buildings, seldom to a standard that represents anything like best practice in childcare. Likewise with staffing – inexpensive staff mean underqualified staff without a proper, trained background in child development.

And wrap-around was meant to mean that it was in the power of parents to extend childcare so that it wrapped around their working hours but instead it means that the commercial nurseries can wrap themselves around parents and are able to demand high fees for extra hours. In many places there really isn't a feasible market for providers.

This has produced a system of monopolies, or an 'oligopolies' (not one but a very small number of providers), which effectively undercut parental choice and forces them to accept the terms of the provider.

To illustrate where this has led, a recently reported case demonstrates many of the factors. An existing nursery has a commercial landlord. That landlord has no background at all in childcare or child development but noted that the nursery is profitable. So the landlord evicts the existing nursery and sets one up himself.

This runs uninspected for two years, gets an unannounced inspection in June and is closed down a couple of months later because it is found to be putting children 'at risk of harm' and the description of the behaviour of staff to the children at times sounds close to neglect and abuse.

Yet again, this is the inevitable logic of running services for private profit. We have seen this again and again and again, from PFI to tree planting, if you put a bounty on a service, the modern 'entrepreneur' will seek to find the cheapest and so most profitable way to harvest that bounty – at the expense of the public good the funding was meant to be delivering.

Common Weal has since produced a number of reports on early years developments including this under-reported but landmark paper. We have argued consistently that childcare should never be a process of 'dumping' children while parents do other things. It should be an integrated, public system which develops healthy, rounded, emotionally stable children through every stage of their development.

The only positive in this is that as with private care homes but different from PFI, there is no 'trap' included which requires this system to continue. Government can simply reverse course and create the childcare system it should have as soon as any existing contracts run out. There are many good nurseries in the private sector and they should be offered fair terms to come under a public system.

But campaigners must also understand this; if you want childcare that is there to serve you and your children and not financial beneficiaries of a private business, you need to stop asking for 'childcare' and you must start demanding a consistent system of child development run for the public good in the public sector.