England's childcare sector risks becoming a "playground for private equity", experts have said, as exclusive analysis by the Guardian reveals that investment funds have more than doubled their stake in the sector in four years.
The findings come as the Treasury prepares to spend an extra £4bn a year of taxpayers' money funding nursery places. The research has prompted warnings that the increasing involvement of private equity could leave providers more vulnerable to closure and do nothing to address the shortage of places in deprived areas, where parents cannot afford to pay as much.
The Guardian's detailed analysis of Ofsted-registered nurseries reveals that in 2022 at least 1,048 were fully or partially controlled by investment companies, including private equity and venture capital firms - 7.5% of all nursery places, up from 4% in 2018. Investment funds ultimately own nearly 81,500 childcare places in England - almost double the 2018 total.
The rapid growth means thousands of nurseries could be vulnerable to collapse, according to unions and experts, who say that the chaotic near-demise of Thames Water and the high-profile failures of private equity-backed firms in adult social care should act as warnings.
A University College London report last year warned that nurseries were being snapped up by profit-focused companies that were "heavily indebted" with "risky financial operating models [that] could threaten the provision of nursery places". The research found "market dynamics can lead to insufficient coverage in poorer, less profitable areas".
These risks were highlighted in the adult social care sector, with the high-profile collapse of Southern Cross in 2011 and of Four Seasons Health Care, which is now operated by administrators after a previous owner, the private equity firm Terra Firma, racked up huge debts.
Bu hikaye The Guardian dergisinin August 05, 2023 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Giriş Yap
Bu hikaye The Guardian dergisinin August 05, 2023 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Giriş Yap
The Filter Cast-iron alternatives to Le Creuset for less
Le Creuset's colourful pans have long topped the wishlists of amateur and professional cooks.
Money hacks How to find a pet-sitter you can trust
Unless you have family, a friend or a neighbour who can care for your pet when you're away, you'll need to find a pet-sitter you can trust.
Pensions An A to Z of how to save for your retirement
Everything you need to know to plan for your future and make the most of your finances. Rupert Jones and Hilary Osborne report
'A fork in the road' AI's bid to help on laundry days at Europe's tech summit
This year's Web Summit in Lisbon was all about artificial intelligence and a robot sorting laundry.
Brexit So how could Labour improve EU ties for the sake of growth?
The Bank of England governor, Andrew Bailey, said this week that Brexit had undermined the UK's economy, and urged the government to improve relations with the EU for the sake of growth.
Aviation Flying taxis: destined never to take off?
In a dreary November day in the Cotswolds, the VX4 - a cross between a plane and a helicopter - rose from an airport runway, hovered a few feet off the ground and set back down.
Property firm back in profit as workers return to offices
One of Britain's biggest property developers has provided further evidence of the return to office working, saying occupancy in its central London offices is at an all-time high and the value of its portfolio has returned to growth.
Analysis Summer of dark warnings from the Treasury may have cast a shadow on growth
It was hardly surprising that the chancellor, Rachel Reeves, declared herself \"not satisfied\" with the news that the UK's GDP expanded by a measly 0.1% in the three months to September.
Contracting GDP adds to German woes as general election looms
Germany's looming general election will be fought against the backdrop of a stagnating economy, the European Commission has forecast, with GDP expected to have contracted in 2024.
UK economy slows amid jitters over Labour budget
The UK economy slowed to a near-standstill in the third quarter as uncertainty around Labour's first budget and high interest rates weighed on business and consumer spending.
