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Precious little ones;Educare;Features amp; Arts

Childcare used to be a backwoods business. But these days tiny tots mean big bucks, and a new breed of corporate care chains is cashing in. Wendy Wallace reports.

When Tom Shea and Michael Gee decided to set up a chain of nurseries, potential investors were hard to find. But, after two years of presentations and hard selling, they had put together pound;500,000, enough to open their first nursery, in Swindon. That was in 1991. Eight years on, their company, Jigsaw, has an annual turnover of pound;8 million and is backed by 3i, one of the largest venture capital groups in Europe. It looks after more than 2,000 children in 16 nurseries, a figure it expects to have trebled by 2002. And the leading educationalist, Sir Christopher Ball, sits on its board.

Once, childcare was a backwoods cottage industry, undertaken largely by unqualified women for paltry wages. Now, "educare" is big business. There is still a dearth of trained staff and pay remains low, but, with demand for childcare continuing to outstrip supply, the number of private nurseries has increased massively during the Nineties. Nursery World magazine lists 120 chains in its twice-yearly directory, published this week; almost all of the chains were established in the past decade. The vast majority are small, with fewer than six nurseries. Others are large and growing; about 15 major players own andor manage 10 nurseries or more, and a number of these are swallowing up smaller groups.

A low-rise, red-brick building at the end of a shopping parade in Shenley, Hertfordshire, is home to the newest nursery in the Jigsaw chain. It is a state-of-the-art facility, with electrically controlled doors, and a trendily curved reception desk, adorned by a pot of silk sunflowers. Overhead, a projection of the corporate logo circles in a pastiche of a children's mobile.

There is no immediate evidence of the infants themselves, apart from the stripey shoebags on pegs and a cupboard full of collapsed buggies. They are further inside, in small age-segregated groups. In one room, eight small boys are being encouraged by nursery nurses to crawl along a plastic plank balanced on plastic bricks. Game over, they exit en masse for the loo. In the baby room, another young woman, dressed in the green and black uniform of Jigsaw, sits on a beanbag holding one baby on her lap and waving a rattle at another. One is reminded of the awesome responsibility of those who take charge of the offspring of others - in the case of this nursery, of babies from 12 weeks, for up to 10 hours a day, 52 weeks a year. When the nursery is full, it will have 108 children.

Jigsaw nurseries cater for parents' every whim; mums and dads can even specify a bottle type and skin care product for their baby. Clothes are sent home washed each day and the nursery uses terry rather than disposable nappies if required. Development reports are provided and health and dental checks organised. There is a price, of course: a full-time place at Shenley costs pound;160 a week.

Chief executive Tom Shea, 46, is proud of his roots in childcare. He began as a volunteer in what was then known as a "handicap school", supporting a small boy with autism. Later he moved to the early years section of the London Borough of Haringey - becoming child development officer in 1979 and then principal officer for children's services.

"Anything we ask staff to do, I have done," he says. He last changed a nappy three weeks ago, he says, and board meetings are held in the nurseries, where directors eat the same food as the children.

Duncan Bannatyne of the Just Learning chain - who spotted a business opportunity when he couldn't find a nursery place in Darlington for his own daughter - came to childcare from the nursing home business. Quality Care Homes was floated on the stock market in 1992, then sold in 1997 for pound;46 million - pound;2 million of which was invested in Just Learning. Bannatyne says that a business background is more important than childcare or education experience; he buys in early years expertise in the form of managers. His major business interest is a string of health clubs, but the growing nursery chain is "very profitable". The newest nursery, in Huntingdon, Cambridgeshire, was opened last month by the former prime minister, John Major.

Other players in the market put less emphasis on the profit motive. Busy Bees, a company which manages more than 30 workplace nurseries across the country as well as owning two others and running shoppers' cr ches for Tesco and Woolworths, and after-school clubs, is one of the largest chains in the field. It was started in 1983 by six teachers who, says director John Woodward, "wanted good quality nursery care for our own children and found it wasn't there".

Such was their commitment that the three couples sold two of their houses, and two families initially lived together in a three-bedroomed flat over the first nursery, with their three children. "We compromised on our standard of living, but not on our children's childcare. Everyone said we were mad," says Woodward, a former special school teacher who now has nearly 700 employees.

The pursuit of profit should not override the need for quality, he believes. "You've got people coming in for different reasons. We believe in what we're doing, and want to do something we're proud of. It's a myth that you're going to make huge profits - if you're doing it properly."

But despite such pronouncements, the private nursery sector has struggled to establish a reputation for quality. The Gatehouse Nursery Services, established in 1989, was beset with problems, and at least one branch was deregistered by social services. The troubled 45-strong chain was sold this year by brewing giant Whitbread to Asquith Court Schools, which owns a Montessori centre, a string of nine private prep schools and 21 pre-schools.

Quality control is erratic, however. All nurseries are subject to annual inspections by local social services departments under the Children Act. These inspections vary around the country from constructive and quality-enhancing support from the local early years department to crude checks on space and staffing ratios from unsympathetic inspectors. They are widely seen as a basic minimum rather than a standard to aspire to.

Nurseries claiming government grants for the education of four-year-olds have also been subject to Ofsted inspections, and the Government announced earlier this year that Ofsted is to become the lead body in nursery inspection, with new quality criteria and staff-child ratios in the pipeline.

But how radically will the Government's newly defined early learning goals change the way nurseries operate? Jigsaw already offers what it calls "Key Stage Nought", which is designed to ease the transition to primary education. Its literature promises "pre-reading, pre-writing and pre-maths" schemes, as well as early years French and computing.

Kids Unlimited - which owns or manages 30 nurseries and had a turnover of pound;6 million last year - includes in its newsletter a recipe for tomato and basil breadsticks - "which staff and children of Little Flyers Nursery in Cheshire enjoyed making and sampling" - and children are promised the opportunity to "marvel at the wonders of the sky; clouds, the sun, moon and stars..." But the company also offers a "Kids' curriculum" which, says company director Stewart Pickering, is an area of "major investment".

Pickering, a former science teacher, agrees that there is parental pressure to get children performing. "We've met it so many times that we would not be pressured to make children jump through hoops," he says.

Susan Hay, director of Nurseryworks - which has eight London nurseries - has resisted parents who urge a narrow focus on early learning goals. "Parents pick up soundbites around the targets children are expected to meet on school entry and focus on those things with a tendency to forget the wider issues," she says. "The challenge for us is to remind them of the full entitlement children have."

Susan Hay points to the distinction between the needs of working parents and the best interests of their children, particularly in relation to the length of the nursery day. Nurseryworks offers a maximum of 10 hours care per day. "There is pressure for more, and some parents can't use us because they need a longer day," she says. "We don't offer services to parents that can't be justified in terms of benefits to their children."

The biggest problem facing this growing industry is a shortage of qualified staff. "Growth is exponential, with demand far outstripping supply," says Stewart Pickering of Kids Unlimited. "We're just limited by the rate at which we can open nurseries, and staffing is the biggest, biggest problem."

With salaries still rock bottom, at around pound;7,000-8,000 a year for a newly qualified nursery nurse, the chains are currently competing harder for staff than for customers. Most are running their own training programmes, and when one big company invites people to "blossom and grow with Kinderquest", they're trying to attract staff, not children.

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