A Strategic Assessment of the Children's Services Industry

STRATEGIC ASSESSMENT OF THE CHILDREN’S SERVICES INDUSTRYExecutive SummaryIn the last decade, early childhood education and care (ECEC) has experienced ‘a surge ofpolicy attention’ from governments around the world. A considerable body of researchconfirms that early childhood is the foundation for later development and that experiences inthe early years have lifelong consequences for health, education and wellbeing. In addition,there is growing evidence of the economic returns from investment in high quality earlyeducation. Such research, combined with information about the stresses and challenges facingmodern families, has propelled ECEC to a prominent place in the policy agenda of manycountries. Governments and international organisations increasingly recognise the longlastingimpact of children’s early years and seek to develop programmes and policies that willhave beneficial impacts upon children’s future development, including their health,educational and social development. ECEC policy is also connected with a range of otherpolicy arenas and goals, from increasing women’s labour force participation to povertyalleviation.The Australian government has placed early childhood education and care (ECEC) at thecentre of an exciting and challenging agenda. ECEC is, for the first time, being seen both asvaluable in itself and as a tool to be utilised in the nation’s long-term social and economicstrategies – including productivity, labour force participation, skills formation, socialinclusion and the ‘education revolution’. It is an important element of ‘closing the gap’between Indigenous and non-Indigenous children.States and Territories have also strengthened their focus on ECEC, increasing investment andinnovation and exploring new services and supports that more closely match the needs ofcontemporary Australian families.The emerging agenda around early education and care is exciting and challenging. It includesuniversal access to preschool education in the year before school and the development ofparent and child centres which will act as service hubs, bringing together health, educationand child care and providing targeted services for particular groups.The implementation of this new agenda will require new ways of thinking about the needs ofchildren, families and communities, new structures, and new relationships between theCommonwealth and State/Territory governments and other stakeholders. It will requiremoving beyond notions such as the separation of ‘education’ and ‘care’ to thinking in moreholistic ways about the needs of children, families and communities. Already there are manyexcellent examples of such services in operation across Australia. The challenge is to developa systematic, nationwide approach while recognising and respecting local needs andaspirations.The achievement of Australia’s ambitious goals in relation to ECEC is made more complexby the nature of the market in children’s services. Almost three-quarters of Australian longday care is provided by the private, for-profit sector – a similar proportion to the UK, buthigher than the USA. Reliance upon the private sector to deliver children’s services iscommon across the English-speaking liberal welfare states. Australia is unique, however, inits level of market concentration: a single commercial provider owns approximately one-thirdof the long day care places in the country - a situation unparalleled in the rest of the world.(By comparison, the top 40 providers together own about 10 per cent of the market in the UK,while in the USA national chains collectively own 13 per cent of all centres.)Private providers play an important role in many areas of Australian social policy includinghealth, aged care and the delivery of welfare services. The private sector has contributed to aiii