Childcare & Education Expo Midlands 2024: Early Years Breakfast Summit Report

Report on the Early Years Breakfast Summit, Hosted by Christie & Co at the Childcare & Education Expo Midlands 2024

Christie & Co’s Breakfast Summit took place at the Childcare and Education Expo Midlands on 27th September, bringing together childcare providers, trade associations and other professionals to discuss the state of the industry. 

Morton Michel are headline sponsors of the Expo as a whole and it is fantastic to see how it provides a powerful opportunity for the sector come together to take stock and share insights after a year of tremendous change. 

Market Activity

The summit began with a detailed discussion of the Nursery merger and acquisition market led by Courtney Donaldson of Christie & Co. Of course the childcare market is not uniform but the overall picture was broadly positive. Offers for businesses are up, but significantly so are the size of the businesses being sold, up to 78 places from the mid fifties typically seen in recent years. Acquisitions are growing amongst smaller groups in particular, and Courtney also noted a shift from freehold to leasehold sales, despite high demand for the latter, demonstrating the power of sellers in the current market.

This activity is intrinsically linked to the recent changes to childcare entitlements. The market was palpably quieter in the early part of the year as owners concentrated on the increased demand, as well as increased enquiries from parents. Judging from the response amongst attendees, finding ways to increase capacity has been a priority for much of the sector. However the increase in activity seen as the funding position solidified suggests the sector is increasingly comfortable with its response, though many challenges remain.  

One of these, as ever, is parental perceptions of their entitlements. Funded places are often still assumed to be a free, universal benefit, rather than a benefit only available to working families. This is particularly relevant where the youngest children are concerned and parents may not be working. Moreover there is a lack of understanding that the funding does not completely meet most business’s needs. In one notable case a parent sent in a whole spreadsheet detailing what the expected to be charged – only for the nursery in question to correct it and send it right back!

Yet increased demand is not something anyone was really complaining about, it’s certainly a nice problem to have, even while the challenges of meeting it remain very real. What is happening is that settings are innovating, looking for more ways to use their space. This includes looking at modular use of outdoor areas and temporary structures – not, one audience member hastened to explain - £99 tents, but nice environments with heating and lighting! If rising demands can be met, it seems likely that this will only increase the attractiveness of the childcare market to capital investors.

Innovation though costs money and there was a lot of scepticism in the room that the £100m pot that the government has made available is being appropriately allocated by local authorities. Several participants at the summit raised concerns along these lines, with reports of some authorities only allocating money to charities, or only focussing on wraparound provision to the exclusion of early years. Planning restrictions were also raised as a potential blocker, but something the Department for Education is aware of, and some applications citing government policy have reportedly been successful. 

Government Interventions

The incoming Labour government has adopted the Conservatives’ plans for expanding the free entitlement, but with a different spin. It was noted by participants that in the Minister, Stephen Morgan, who delivered a keynote address to the Childcare and Education Expo, referred to childcare places as ‘funded’ rather than ‘free’. This has since been confirmed to be a deliberate change in language by the government, more closely reflecting the reality of the policy. 

The Minister also impressed those attending by spending several minutes engaging with providers, rather than leaving immediately after his speech, in stark contrast to many predecessors. With that said, it is perhaps easier to engage directly when it is not yet your government being blamed for the sector’s problems! 

The Summit discussed the new government’s policy of utilising empty classrooms for early years childcare. There was a lot of scepticism towards the policy, with several participants noting that many head teachers are not keen on delivering an early years service, although partnerships with the existing sector were more attractive. One suggested there would not be much take-up, although possibly more in deprived areas. There was also real concern that the effect of the policy would be to turn 3-year-old provision into pre-reception preparation. 

Workforce 

Recruitment and retention has been perhaps the major issue for the early years sector for many years, but at the Summit, Courtney suggested that in her experience, the crisis may be abating. The overall view in the room was that due to increased funding levels this may be true, especially for larger providers who have more flexibility to innovate. Nonetheless, the issue remains a significant challenge and generated lively conversation.

The Summit heard from Sara Bonetti, Interim Director of the Institute of Early Years Education who delivered a detailed presentation on workforce challenges, and how to rise to them when increasing pay is not a realistic option. In the following discussion, two main themes emerged. Generational differences, with the challenges facing both gen-Z employees and their employers, and the essential role of wellbeing in staff retention.

Gen-Z, that is, the youngest generation of workers at present, were universally felt to be different. This is the cohort who came to maturity during the Covid years, and whose contemporaries are often benefitting from a culture of flexible working, as well as equivalent or higher salaries in jobs they perceive as less demanding. They are highly ambitious but not always realistic, frequently expecting to rise quickly to managerial positions. Some do manage to achieve this early, by swapping employers once they have gained qualifications; a theme that was returned to later.

Other than raising pay, which was acknowledged to be challenging, staff wellbeing was agreed to be key to mitigating the challenge of staff retention. Holistic approaches see the most benefits overall, but require a significant effort of leadership to achieve. Providers gave examples such as allowing staff hall-passes for when they feel overwhelmed, introducing as much flexible working as possible to working practices, and training staff in wellness practices like meditation to help them handle stress. It was emphasised though that even small changes can make a big difference to staff feeing supported and valued.

Qualifications were discussed in this context; offering staff chances for professional development can have a huge impact, but some felt that there is a reluctance amongst some providers to commit the necessary time and resources to training. This, it was observed, causes  vicious circle, where a lack of trained staff creates ever greater pressures on both recruitment and management. A significant takeaway from this part of the session was the need for everyone in the sector to do their bit creating the next generation of practitioners.

There was also a reflection that Gen-Z are not just new staff, but are now frequently parents too, and that generational disconnect plays a role here. Quite simply, being a parent in 2024 is very different to how things were 20, 10 or even in some cases, 5 years ago, with the pressures of cost of living, high technology and the fall-out from Covid creating unique challenges. This can be difficult even for more experienced staff to understand when working with parents, but needs to be addressed so that younger staff have somewhere to look for leadership.

SEND

After a break, the conversation moved onto the topic of SEND, facilitated by Catherine McLeod from Dinglies Promise. It was very widely accepted in the room, and backed up by statistics from the Early Years Alliance that there are increased numbers of children presenting with complex needs, though it was not certain whether this is due to greater awareness, changes in society, or a combination of both. A recurring theme though was that most settings do feel capable of handling children with greater needs in principle, but in practice doing so can make it hard to deliver a service to other children whose needs might be less complex, but of whom there are more.

As this was a complex, multifaceted topic, the room split into groups to ensure the ground was fully covered. A common theme arose that different local authorities have very different approaches to SEND, creating a situation where what side of the county border a provider is on can necessitate very different approaches. This creates significant additional workload for providers who operate in more than one authority’s jurisdiction, meaning they cannot adopt a unified approach across all their settings. There was a concern that some local authorities can seek to pass the buck in certain situations, such as where a nursery is in one county, but the child lives in another. It was acknowledged though that local authorities are keen for a unified approach – it is central government that does not want to define one. Catherine agreed to take these issues back to the Minister.

Another concern was school readiness to handle children with SEND requirements. Several tables gave examples where children who were being well supported in early years settings were not offered similar support once they started school. In some cases this has led to children being kept in the early years setting for an additional year. While this may well be the optimum result in some cases, the feeling in the room was that this is only mitigating a wider issue, and that the transition to school needs to be better managed, to avoid putting settings in a situation where they have to refuse to accommodate a child.

Funding, of course, was raised as a major concern, again with different local authorities applying funding differently. There appeared to be misunderstandings or at least very different approaches to how funding can be allocated, with some councils having a reputation for being better or worse than others. Again, the need for a unified approach was stressed, albeit with the acknowledgment that local needs inevitably differ.

Conclusions

It was apparent across the Summit that the sector is in a period of transition. The increased entitlement and increased funding levels, combined with the post-Covid economic landscape as well as rising mental health needs are creating profound challenges. However, despite this, the overall mood was cautiously optimistic, perhaps more so than at any time in this decade. For every challenge proposed, someone was able to suggest either a solution that worked in their settings, or a mitigation that was at least keeping the problem at bay until systematic change was possible. Most notably while still a serious issue, recruitment and retention seems to have given way to SEND as the most critical subject facing the sector, and doubtless over the next year, that is where further discussions will be focussed.