2022 saw major consolidation in the nursery market, and we are likely to see more and more smaller nursery groups bought up by large multinational companies in 2023. This follows a general trend of ‘financialisation’ in the UK care sector, funded by private equity groups and pension funds.
The growth of nursery chains has led Ofsted, the UK government body responsible for the inspection of educational institutions, to call for more powers to enable it to have regulatory oversight at a group level, rather than just individual settings. This would allow it to assess the influence of the company on education and care.
Oversight of these corporations should also involve looking at their track record of regulatory compliance. This process is made easier with the recent addition of just under 500 entries to the Violation Tracker UK database of non-domestic childcare settings that have not met standards at their latest Ofsted inspections.
A lack of unionisation in early years work means that cases where workers have been mistreated are far less likely to come to employment tribunals. However where they have, researchers will now be able to link recent Ofsted inadequate ratings to employment-related offences on the Violation Tracker UK website, as well as care quality violations and other safety-related infringements.
One such case where Violation Tracker data exposes alarming developments is the recent rapid UK expansion of Partou, the largest provider of nurseries in the Netherlands. Partou bought Just Childcare in 2021, and then All About Children last year. Five months before the purchase of All About Children, a majority share in Partou was bought by Dutch private equity firm Waterland who announced it had made the purchase to ‘introduce new standards in terms of ESG in childcare’.
Waterland, however, has a poor track record when it comes to safety and employment. Violation Tracker UK data reveals a rap sheet of eight workplace safety infringements, six labour standards violations and eight care quality violations committed by its private hospital, Priory Group, and care home subsidiaries. New Ofsted data added by Violation Tracker shows that Waterland owned at least three educational settings that were subsequently closed after being rated inadequate by the inspections body. The data shows too that since Partou acquired ‘Just Childcare’ in June 2021, four of its nurseries faced actions and enforcement by Ofsted for failing to meet standards.
2022 also saw US based childcare provider Bright Horizons, the second largest nursery chain in the UK, acquire ‘Only about Children’. At the beginning of last year Bright Horizons was fined £800,000 after an unsupervised baby in their care choked to death. Four different Bright Horizons nurseries were handed enforcement notices since July 2021.
Not all nursery chains have been expanding. Welcome Nurseries, known on Violation Tracker UK for a labour standards violation last year, had to sell 26 of its 48 settings to a newly created firm ‘Harp Group’ in August. Six months later, less than half of these are still in operation, with reports of parents frantic after being given only two weeks’ notice that they were closing. Six Welcome nurseries were found to have not met standards at their last inspections.
The expansion of nursery chains in the UK is only just beginning to attract scrutiny. Busy Bees, the largest nursery provider in the UK, now represent 855 centres across the country. Its parent company Eagle Superco Limited, controlled by a Canadian pension fund, has rapidly expanded its provision of day care nursery services across ten different countries over four continents. Like the fast-growing Bright Horizons, Busy Bees acquisitions are fuelled by hundreds of millions of pounds of debt.
This business model is unlikely to be good news for parents, children or the workers who take care of them. The money to service this level of debt will be coming in large part from fees paid by parents, which are already amongst the highest in the world.
With companies incentivised to maximise profit by squeezing wages and standards, tracking their conduct is more important than ever.
You can follow Violation Tracker UK on Twitter @VT__UK (note there are two underscores).