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Corporate Child Care in Australia: Is it in the Public Interest?

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In Australia, corporate child care = ABC Learning ... Rush & Downie, 2006); researchers (Purcal & Fisher, 2004); social commentators ... – PowerPoint PPT presentation

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Title: Corporate Child Care in Australia: Is it in the Public Interest?


1
Corporate Child Care in Australia Is it in the
Public Interest?
  • Jennifer Sumsion
  • Charles Sturt University, Australia

2
In Australia, corporate child care ABC Learning
  • ABC Learning owns / operates 1,158 child centres
    (21 of total 5,372 centres 29 of 3,886 for
    profit centres)
  • The next largest provider (not for profit
    provider) operates 145 centres
  • The only other remaining corporate provider
    operates 44 centres (Citigroup,
    2007)

3
ABC Learning Centres Limited Annual Report 2006
4
ABC Learnings global expansion
  • UK 48 of 15,605 centres (0.3)
  • USA 1,150 of 120,000 centres across 39 States
    (1.1) (includes franchises in Hong Kong,
    Indonesia, Philippines as part of Learning Care
    takeover)
  • NZ 77 of 1,700 centres (4.5)
  • China subsidiary (123 Global Holding) and joint
    ventures planned for 2008
  • (Citigroup May 07, June 07 )

5
ABC Learnings plans for UK
  • Owns / operates 48 Busy Bees centres
  • Soon to acquire 88 Leapfrog Nurseries (in total,
    0.8 of all centres)
  • Anticipated total of 250-300 centres (1.9)
  • happy to sort of take it slow (Eddy Groves,
    CEO)
  • (ABC Notes Prospectus, 2007 Inside Business,
    2007)

6
Number of ABC Learning centres
7
ABC Learnings net profit Am
8
A corporate success story(?)
  • Investment analysts increasingly refer to
  • high risk
  • poor visibility (i.e. transparency)
  • aggressive expansion
  • mature Australian market
  • low occupancy rates in USA
  • vulnerable to brand damage / (reputational
    risk)
  • share price underperformance
  • (Citigroup, June 07)

9
But is it in the public interest?
  • What is good for the community as a community
    (Stone, 2002, p.21)
  • Where governments and economic and social
    institutions exist to serve people, rather than
    the reverse (Davies, 2004, p. 305)
  • A social contract between business and the
    general community articulating reciprocal
    obligations
  • (Davies, 2004)

10
Public interest A contentious construct
  • What is in the public interest changes as
    circumstances change and as values and
    perceptions of the society change (Davies,
    2004)
  • It is not in the public interest if the
    activities of a corporation take unfair advantage
    of public goods, distort functioning of markets,
    externalize costs, produce bads (undesired or
    harmful goods), acquire excessive (or any?) power
    over people, or otherwise erode the health of
    society and the natural environment (Davies,
    2004 p. 178)

11
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12
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13
What crucial questions need to be asked?
  • Is maximising returns to shareholders
    inconsistent with providing high quality ECEC?
  • Is providing high quality ECEC sufficient?
  • What, exactly, do we perceive to be under threat?
    What evidence do we have of that threat?
  • Are we losing sight of the bigger picture by
    focusing so much attention on just one of many
    potential threats (corporatisation) to quality?
  • What are the costs of corporate success?

14
Crucial questions
  • Does ABC Learnings size / profitability bring
    undue influence to conversations with government
    and to its membership of policy communities?
    (Ball, 2007)
  • What are its flows of influence?
  • (Ball, 2007, p. 129)
  • How does ABC Learning manage reputational risk,
    given that its reputation is a crucially
    important resource?

15
How to scaffold a critical analysis in the
absence of empirical data?
  • litmus tests
  • e.g., Would we be concerned if this was
    happening in the non-profit sector?
  • Cribb Balls (2005) ethical audit framework
  • focusing on goals, obligations and dispositions
    (see Sumsion, 2006)
  • Opportunity costs i.e., the costs involved in
    choosing a particular direction or course of
    action over another (broad ranging impact / cost
    - benefit analyses)

16
Public interest as a possible scaffold?
  • What might a social contract between business
    and the general community articulating reciprocal
    obligations involve? (Davies, 2004)
  • transparency
  • trust (that motives go beyond self interest)
  • recognition (that obligations go beyond profit
    maximization)
  • civic engagement - contribution to strengthening
    social and democratic fabric
  • conducive / contribution to economic growth /
    economic stability

17
Reciprocal obligations / relations
  • What is the nature of relations between
    corporation, public and the state and how are
    they changing?


18
Public perceptions of ABC Learning(a tentative,
partial analysis)
Dimension of public interest (my) Rating Sources of empirical evidence (limited)
transparency low investment analysts researchers
trust low ECEC community parents (Harris, 2007) researchers
recognition of its responsibilities low ABC employees (Rush, 2006 Rush Downie, 2006) researchers (Purcal Fisher, 2004) social commentators
civic engagement ? -
economic growth / stability low Investment analysts researchers (Brennan, 2007)
19
Purcal Fisher (2004)
  • analysed interim approvals in NSW
  • (ie exemption from employing a university
    qualified EC teacher despite the centre being
    licensed for more than 29 chn)
  • for-profit services had 79.4 of interim
    approvals despite comprising only 52.3 of all
    centres requiring an EC teacher
  • one unidentified provider had 31 interim
    approvals (17.6 of all approvals) for its 65
    services requiring an EC teacher, even though it
    operated only 4 of all centres requiring
    teachers.

20
Rush (2006) N 578 229 respondents from 81
community-based centres77 respondents from 30
ABC Learning centres
Indicators Community-based ABC Learning
Enough time to develop individual relationships with chn 54 29
Staff ratios never drop below legal minimum 77 52
Good variety of equipment 66 37
Nutritious food for chn Enough food for chn 74 80 49 55
21
Rush (2006) less commonly reported findings
Indicators Community-based ABC Learning
If you have or had your own children aged under two, would you be happy to enrol them at the centre where you work or one with comparable quality of care? Yes 80 No (because of quality concerns) 4 Yes 70 No (because of quality concerns) 18
22
Rush Downie (2006)
  • 20-30 min telephone interviews N20 with
    subsection of 77 ABC Learning employees who
    responded to survey
  • explored survey questions / responses in more
    depth arguably loaded questions
  • data indicated wide range of views concerns
    seemed little different from concerns generally
    reported in literature about working conditions
    in long day care (except for a culture of secrecy
    referred to by 25 of participants)

23
Harris (2007)
  • Interviewed 20 women in Townsville (North
    Queensland) whose children attended long day care
    centres (14 x community-based, 2 x independent
    for profit, 5 x corporate)
  • 9 participants indicated centre met their
    quality vision
  • (6 x community, 2 x independent, 1 x corporate)
  • 4 participants indicated centre did not meet
    their quality vision at all (3 x corporate, 1
    unspecified)

24
Australia A watershed?
  • No other country in the world has allowed a
    single company to assume such a commanding
    position in the market Australia has, in effect,
    embarked on a vast national experiment (Brennan,
    2007, p. 226)

25
Pessimistic perspective
  • What begins as the provision of a service to
    fulfill collectively determined socio-political
    purposes ends up as a drive to find mass-produced
    goods that can be sold profitably. The collective
    needs and values that the service was originally
    created to serve are gradually marginalized and
    finally abandoned. (Leys, 2001, p. 4)

26
Optimistic perspective
  • Stakeholder activism in the form of
  • demanding a social contract, and that the terms
    of the contract be explicit and transparent
  • demanding corporate social responsibility
    reporting for for-profit human services provision
    that is supported by taxpayer funding
  • devising / having input into the development of
    an audit tool that could be used for an
    externally initiated audit to assist in
    circumventing window dressing reporting

27
Considerations for the UK
  • What, if any, social contract could be
    established with childcare corporations?
  • What safeguards are already in place and what
    might need to be introduced?
  • What requirements for transparency are in place /
    need further development?
  • What forms of checks and balances are appropriate
    and feasible?
  • How will empirical data be obtained? What data
    would be most useful?
  • What would an effective impact / cost-benefit
    analysis involve?

28
References
  • ABC Learning Centres Pty Limited. (2007). ABC
    Notes Prospectus.
  • ABC. (2006). Financial Report For the Financial
    Year Ended 30 June 2006 Retrieved 4 November,
    2006, from http//abclcl.republicast.com/ar2006/re
    publicast.asp?page1layout1controlyeszoom100
    .
  • Ball, S. J. (2007). Education PLC Understanding
    private sector participation in public sector
    education. London and New York Routledge.
  • Brennan, D. (2007). The ABC of child care
    politics. Australian Journal of Social Issues,
    42(2), 213-226.
  • Cribb, A., Ball, S. (2005). Towards An Ethical
    Audit of the Privatisation of Education. British
    Journal of Educational Studies, 53(2), 115-128.
  • Davies, G. (2004). Economia New economic systems
    to empower people and support the living world.
    Sydney ABC Books.
  • Harris, N. (2007, July). Women's Reflections on
    Choosing Quality Long Day Care in a Regional
    Community. Paper presented at the Australian
    Social Policy Conference, Sydney.
  • Leys, C. (2001). Market-driven politics
    Neoliberal democracy and the public interest. New
    York Verso.
  • Purcal, C., Fisher, K. (2004). Review of the
    early childhood teachers shortage interim policy
    for the NSW Department of Community Services,
    Office of Childcare. Retrieved 12 December 2004.
    from http//www.sprc.unsw.edu.au/reports/ECTFinalR
    eport.pdf.
  • Rush, E. (2006). Child care quality in Australia
    (Discussion Paper Number 84). Canberra The
    Australia Institute.
  • Rush, E., Downie, C. (2006). ABC Learning
    Centres A case study of Australia's largest
    child care corporation (Discussion Paper Number
    87). Canberra The Australia Institute.
  • Stone, D. (2002). Policy paradox The art of
    political decision making. London W. W. Norton
    and Company Ltd.
  • Sumsion, J. (2006). The corporatization of
    Australian childcare Towards an ethical audit
    and research agenda. Journal of Early Childhood
    Research 4(2), 99-120.
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