Achievements and Challenges in Developing Out of School Hours Childcare The New Opportunities Fund has asked the research company SQW Ltd, in partnership with the Out of School Hours Research Unit at Brunel University, to carry out a three year study of our out of school hours childcare initiative.This briefing was prepared by the New Opportunities Fund using findings from SQW’s first year of fieldwork, carried out from September 2000. We are keen to identify and respond to the factors that contribute to the successful development of out of school hours childcare and to share our findings widely with our partners, applicants and projects within the childcare sector. As the childcare context is changing fast, these findings are preliminary and subject to change. Future phases of the evaluation will revise and develop the analysis presented here.

Evaluating the New Opportunities Fund’s out of school hours childcare programme first annual report (June 2001) Graham Thom, Jo Hutchinson, Angharad George, Sarah Francis and John Barker This research summary by Alison O’Grady

Background and context

About the evaluation

Methodology

The out of school hours childcare programme is a £220 million funding initiative delivered by the New Opportunities Fund.We launched the programme in January 1999 and will close for applications in 2003.

The evaluation focuses on two main issues:

In their initial fieldwork, SQW used a case study approach, focussing on three projects in each of 12 areas across the UK. Surveys with providers, parents and Early Years Development and Childcare Partnerships (EYDCPs) supplemented the case studies. Future phases of the work will include follow-up contact with year one case study projects, a second cohort of case studies and surveys and interviews with EYDCPs.

Our programme sets out to address the lack of out of school hours childcare provision and to fund new childcare places for 865,000 children. It complements the National Childcare Strategy which, along with its equivalents across the UK, aims to improve the quality, accessibility and affordability of childcare for children aged 0–14. Ultimately, the strategy aims to promote the wellbeing and development of children and to offer more parents, especially women, the chance to take up work, education and training. We want to create places that will continue beyond the period of our funding, often through fees to clubs. The sustainability of clubs, and the use of the childcare element of the Working Families Tax Credit (WFTC) to help lowincome families pay fees, are discussed below.

Social impact This includes the consequences of the availability of childcare places for the parents and carers of children using the schemes, and wider issues of local participation in projects. This focus serves to evaluate the programme against the objectives of the National Childcare Strategy as well as our own organisational commitment to fund projects which promote social inclusion. Sustainability We are especially keen to understand the dynamics of where and why projects succeed, focussing on the role of variables such as organisation type (ie community led, voluntary led or small business), geographical setting and the practical elements of business operation.

SQW’s findings point to clear, positive effects on the lives of parents and carers and high satisfaction levels with the childcare projects. ●

43 per cent of parents or carers surveyed had been able to take up employment opportunities and 19 per cent were able to increase working hours

●

82 per cent would have to reduce work or study time without the club

●

75 per cent were very satisfied with the costs of the club (and 22 per cent reasonably satisfied)

●

70 per cent felt that their childcare was more reliable than before, and 81 per cent reported ‘greater peace of mind’

●

45 per cent felt that their children were better looked after than before

SQW’s key research questions include: 1. How has the availability of childcare places affected the parents of children who use the places? 2. What factors have influenced the take-up and continued use of places? What are the characteristics of groups that use the places? 3. How are parents and communities involved in schemes? What are the consequences of this involvement? 4. Is the childcare provision likely to be sustainable?

2

Impact of the programme on carers and communities

Though the sample here was small (204 respondents, representing an 8 per cent response rate) the findings are consistent with other research.The evaluation will continue to track the effects on parents, with an expanded survey, during the course of the evaluation.

Example 1. Langley Childcare Forum Set up in 1993, the scheme offers flexible childcare services which meet the needs of parents, many of whom are shift workers or students. Parents/carers are not tied to using regular sessions and can book places as and when need arises.The new childcare element of the Working Families Tax Credit is a very welcome new source of funding. We are interested in how carers and communities are involved in childcare clubs, and the consequences of such involvement. So far, the study has shown positive levels of parental involvement. 33 per cent of the case study clubs were run by voluntary committees of parents and, for many, such involvement represents their first experience of community activity. Of those surveyed, one in four parents reported helping with the scheme in at least one way, with participation on management committees and fundraising the most popular activities. Parents or carers reported increased levels of confidence, skills and self-esteem resulting from participation.

Supply and demand Fees: ability and willingness to pay Overall, the evaluation throws up a complex and sometimes inconsistent profile of childcare development. There is evidence of both high demand and some spare capacity. We know there is high demand for childcare, evidenced by the number of bids to our own programme, EYDCP’s needs assessments, and the fact that one in five schemes operates waiting lists. However, the majority of the case study schemes (75 per cent) repor t unfilled places, and 30 per cent repor t occupancy rates of less than 50 per cent. This mis-match can be largely explained by the time it takes new schemes to become established (see below). However, the case studies have indicated some additional factors, including weaknesses in the original market research carried out by projects, and the orientation of the local EYDCP responsible for suppor t and development. Some EYDCPs focus on increasing provision generally (an approach taken by the London case studies) whilst in other urban areas the emphasis is on disadvantaged communities, where creating and filling places can be more difficult.

Parents must be both able and willing to pay fees if a childcare market is to succeed, and if places are to become sustainable. SQW’s evidence shows that most parents/carers (80 per cent) are paying less than £20 per week in fees.The affordability of these costs will depend on the financial circumstances of individual parents/carers. However, the study indicates that cost is not the main consideration when choosing services; 9 per cent more parents cited good location and quality as the reason for choosing a particular club. Other factors included convenient opening times (65 per cent), the availability of both term time and holiday care (52 per cent), a good reputation (50 per cent), and the availability of transport from school (31 per cent). Overall, 97 per cent of the survey respondents considered themselves reasonably or very satisfied with the costs

3

of their club. Costs do, however, limit use for 40 per cent of parents. Significantly, the study revealed that 81 per cent of survey respondents were not receiving any form of financial assistance and only 15 per cent of parents were in receipt of the childcare tax credit, launched in 1999 and designed to enable low paid parents to use childcare. Interviews with providers illuminated some of the reasons behind low take-up: in particular, parents’ unhappiness with the tax credit’s associations with means tested benefits and eligibility requirements which exclude the un-waged, self-employed, or those parents working less than 16 hours per week. Low take-up of the childcare tax credit at this time is not unexpected. Research indicates that it can take up to five years for such entitlements to be optimally used. However, these case studies suggest that providers could do more to promote take-up and boost their own income. Many projects visited took a surprisingly passive approach to promoting the benefit, although there is also some excellent practice, shown under Example 2. In the light of these findings the New Opportunities Fund is developing guidance for clubs to spread best practice and to help them find good business advice.

4

Disadvantage

Example 2. Krayola Kids

The New Opportunities Fund is committed to increasing the levels of childcare provision in disadvantaged areas (and has extended the possible grant duration to three years for projects located in such areas). We also want to see schemes actively market services at disadvantaged users.

This is a school-based club with five feeder schools. Conscious of the need to promote awareness of the credit, the club has adopted the official leaflet and generated a registration pack to encourage families to apply. 80 per cent of parents are now using the childcare tax credit to help with childcare costs.

A preliminary user profile reveals a higher incidence of lone parents using the places we have funded than under previous initiatives. Over half the clubs interviewed reported that a minority of their children came from disadvantaged backgrounds. It appears from current evidence that notfor-profit clubs are most likely to target disadvantaged areas. Future phases of SQW’s research will return to the question of take-up among disadvantaged groups and will also examine charging policies.

Promoting the Childcare Tax Credit enables clubs to charge market rates to relatively low paid parents. Example 3. Happy Hours Childcare Services This scheme, located in Conway,Wales, came into being in 2000 with a grant from the New Opportunities Fund.The club caters for children who are fostered, have special educational needs or are disadvantaged in other ways. The scheme is now self-sufficient, generating its income through fees, supplemented by the Childcare Tax Credit and Social Services support.

Sustainability: trends Almost all of the 36 case study clubs predicted achieving sustainability within three years (the time taken for most small businesses to break even). Sixteen predicted breaking even in one year’s time and two (from the for-profit sector) expected to make a profit. However, despite promising prospects for most, 35 per cent of clubs interviewed also described their financial situation as worrying. In future phases of the research SQW will measure actual rather than predicted sustainability rates, via follow-up contacts as well as EYDCP interviews.The evaluators have identified a range of factors which can help long-term viability: Income Generally, clubs need to receive a minimum income of £1.70 per hour per child (whether through fees or other sources) and provide between 24–30 regularly filled places. Fee income Clubs need to charge realistic fees, based on evidence rather than perceptions of parents’ ability to pay, and actively promote benefits such as the childcare tax credit. Occupancy rates Generally, clubs need to maintain an occupancy rate of above 73 per cent, ideally about 80 per cent.

Opening date Clubs which open in September, coinciding with the start of the school year, are more likely to fill places. Location School based schemes benefit from an immediate customer base, no transport problems and often subsidised rents. However, these benefits will only be fully realised with the support of the head teacher and staff. Low-rent school based schemes can also distort the development of a market in an area. Flexibility Clubs are more likely to be successful if they offer flexible services to accommodate the different working patterns and other needs of parents. Type There is generally more demand for after-school provision than before-school provision or holiday care (although several of the case study schemes have not been running long enough to test holiday care).

The majority of case study schemes were operating on school premises, offering after-school provision with high levels of consistent attendance. Schemes offering before-school childcare tended to start between 7.30 and 8.30, whilst schemes offering after-school childcare typically closed at 6.30. From initial evidence it seems as if operating hours are not particularly flexible. Future phases of the research will aim to uncover more information. The case study schemes are charging, on average, more than the £1.70 per hour considered necessary to break even. However, some clubs, especially those in more disadvantaged areas, charge lower rates and express doubts about the ability of parents to pay.When asked about sustainability plans, most of these schemes preferred marketing, fundraising or seeking further grant support to increasing fees.This response was more common with schemes run by community groups and volunteer management committees. From initial evidence there seems to be some reluctance to actively promoting fee-based income by encouraging take-up of the Childcare Tax Credit or developing reliable evidence about parents’ ability to pay. Future phases of the research will examine the scheme’s charging policies further.

5

Sustainability: management and location Current fieldwork shows a number of different types of club delivering childcare and suggests that the prospects for a scheme’s long-term survival are linked to its type and to where it operates. Clubs characterised as Type A are run by the private sector with good future prospects rooted in strong business planning.They are less likely to be operating in disadvantaged areas. Clubs characterised as Type C are run by larger community groups, especially those with premises, paid staff and experience in fundraising and delivering services. Again these have good prospects, based on the scale, expertise and existing client base of the community organisations. Such clubs operate in more disadvantaged communities. Type B designated schemes are usually run by smaller parent/volunteer dominated management committees.These often lack the long-term commitment and the business or fundraising skills necessary for success. Such schemes also demonstrate the most reluctance to increase fees.They tend to operate in marginal areas, neither affluent enough to rely on fee-based income alone nor deprived enough to be eligible for on-going public funding. EYDCP workers also expressed concern at the time spent assisting with business plans, ideas and market research with such groups.

6

Table 1. Characterisation of club types Type A

Type B

Type C

Area

Deprived

Marginal

More affluent

Management

Community group with track record of public funding

Voluntary group set up to run the out of school hours childcare club

Voluntary group or business

Pricing structure Low or no fees

Priced to offer as cheap as possible

Priced to cover overheads and generate contingency

Income sources Mixed and matched

The Fund and fees

The Fund and fees

Sustainability

Risky – limited options for additional income generation

Will survive if run as a business – with fundraising and parental fees

Will rarely be allowed to fail – continuation funding will be found

Further research will refine and test this typology. As noted earlier, the New Opportunities Fund is developing guidance for clubs to spread best practice and to help them find good business advice.

Acting on the findings

We will work with our partners to:

We use evaluation findings, feedback from others and our own internal review process to inform the way we develop our programmes.

●

share good business practice with EYDCPs and others in the childcare sector

●

encourage childcare development workers to spend more time with projects with weaker management arrangements

We are committed to: ●

initiating a pre-endorsement process in England, giving EYDCPs greater input into the assessment of applications

Future research The next phase of research over 2001 and 2002 will develop further the themes emerging from the first stage of the evaluation. It will also examine the appropriateness of the clubs’ charging policies and whether funding is being used to support childcare provision for those most in need. SQW’s final report will be available in 2002. Further information

●

encouraging more consortium route applications, led by effective and experienced community groups

●

giving three year grants up-front to the projects located in the most disadvantaged areas (which require a longer time to achieve sustainability)

●

sharing these evaluation findings widely

Full reports are available from: alison.o’[email protected] For more details about the New Opportunities Fund visit: www.nof.org.uk.

7

Our Equal Opportunities Commitment The New Opportunities Fund is committed to promoting equality of opportunity for everyone. The Fund will aim to treat everyone equally and to ensure that no grant applicant, job applicant or employee receives less favourable treatment than another. It is the responsibility of all staff and Board Members to uphold and implement our equality policy. Environmental Statement The New Opportunities Fund is working to minimise its environmental impact and only uses paper from sustainable sources. This publication is also available in community languages. December 2001

8