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SCHOOL'S OUT: Framework for the Development of Out-of-School Care

Section 11
Sustainability

Sustainability concerns

We have discussed sustainability issues in most sections of School's Out, for example, in relation to workforce development and the availability of premises. As sustainability is an ongoing concern reflected in many different aspects of OSC delivery, it is right that we should now discuss sustainability issues in greater depth.

Clubs have to work hard to deliver good-quality care at affordable prices and stay open. A sustainable club will stay open with hard work but without the need, for example, to fundraise or to always be applying for sources of funding. Some clubs are only sustainable because they receive ongoing financial help, for example, from Social Inclusion Partnerships (SIPs).

Sustainability of OSC can be affected by one or more of the following factors.

• The club is full but in a disadvantaged area, and there are real doubts about parents' ability to pay. So fees are set low, which means a lack of income for the club.
• The club is in a rural area with few children attending and with few opportunities to get more income from parents' fees.
• The club is only part full (due to parental employment patterns, the employment profile of the area and availability of spaces on days that do not match parental demand).
• Payment of full letting charges.
• Low take-up of the Childcare Tax Credit by parents of school-age children.
• Inability to attract funding (other than start-up) to allow the club to support itself.
• The parent-led management committee model is very fragile.
• Problems relating to recruiting and keeping staff.

The New Opportunities Fund is conducting a full evaluation of its out-of-school hours childcare programme. The findings in its interim evaluation ¹⁰ about the challenges of developing OSC support the above.

Research commissioned on our behalf on the benefits and costs of OSC analyses the costs of setting up and providing OSC services in a range of circumstances: funded by a Social Inclusion Partnership (SIP) in a deprived area; a parent-managed voluntary service in a rural area; and private provision in an urban area. The research also analysed the range of capital costs (for example, the upgrading of premises) and revenue costs (for example, rent) involved in setting up OSC provision. The researchers looked at the range of variables too (for example, the location of the premises, the hours the service is running for, and extra staff for children in need). They discussed hidden costs, for example, the cost of volunteers. The research will be available soon on www.scotland.gov.uk/insight . We will send the Executive Summary to local authorities and to childcare partnerships.

Sustainability is not always a concern. We should balance the picture with views about services that are sustainable. Some clubs can only stay open because they continued to receive long-term investment from the Urban Programme and now from Social Inclusion Partnerships (SIPs). Others can stay open because they are in wealthy areas where the parental fees cover costs. And some, no matter where they are, have very good business sense and business practices. They are also full, or nearly full, rather than having low occupancy levels.

Funding

The New Opportunities Fund is the main source of funding for setting up new clubs or for adding new places to existing clubs. In Scotland, 25.3 million is available for the New Opportunities Fund's out-of-school-hours childcare programme. The programme closes in summer 2003. Funding for OSC may also be available under the New Opportunities Fund's new childcare programme, the New Opportunities for Quality Childcare (NOQC).

The New Opportunities Fund has made changes to its OSC programme to help deal with sustainability concerns. Any project applying for the programme's final two application deadlines of 15 April 2003 and 15 June 2003 for new childcare places can now seek three-year funding. The Fund will also consider applications for one or two year continuation funding from a wider range of existing projects where they can show need and meet the criteria for assistance. The Fund also supports the Scottish Out of School Care Network's Funding Facilitator Programme.

Local authorities and childcare partnerships can, and do, fund OSC services using our childcare strategy resources. We also made available to local authorities an extra 8 million up to 2004, specifically to support and maintain good quality but fragile clubs in disadvantaged areas. This funding could be used when the start-up funding from the New Opportunities Fund runs out to make sure the clubs stay open. There may also be clubs in difficulty which have not received a New Opportunities Fund start-up grant and they are also eligible for ongoing support. 3 million of the 8 million is permanently within the local authority financial settlement. This means that 3 million will be available to local authorities to allow them to continue to support clubs after March 2004, if they want to.

Study on OSC

We want to make OSC more sustainable, in the short and longer term. We believe there is a lot to be gained in having different models to deliver OSC services and in providing guidance on business support to the parent-led management model of OSC. On our behalf, consultants carried out a study across Scotland. They looked at:

• models for delivering OSC, other than the parent-led management committee model; and
• good-practice in business support for the parent-led management committee model.

A full copy of the report is on our website at

www.scotland.gov.uk/library5/education/posc-00.asp

We recommend that you read the whole report to get the full picture. Here is a brief summary.

Models for delivering OSC

The consultants looked at the following models of OSC, assessing benefits, costs and ability to transfer the models to other parts of Scotland.

• Managed by a large voluntary organisation.
• Managed by the local authority.
• Privately run.
• Outsourcing (allocating) all the management and business functions to a voluntary umbrella organisation.
• Workers' co-operative or employee-ownership organisation.
• Managed as a social enterprise - a not-for-profit organisation, using the Intermediate Labour Market (ILM). ILM is explained later in the relevant section.

We take each of these in turn. (The contact details for each model are in Appendix 6.)

Managed by a large voluntary organisation

The consultants looked in-depth at two OSC services run by large voluntary organisations. The first is an international voluntary organisation with local branches operating independently. The second is a locally-based organisation running a range of childcare services, including five OSC clubs. Three of the clubs are in a Social Inclusion Partnership (SIP) area.

The first example has the following benefits.

• Economies of scale in running 10 clubs, for example, in administering and managing costs, in using information technology and using office equipment.
• Largely able to be self-sustaining across the 10 clubs as a whole, although the local authority gives a small grant.
• Opportunities for playwork staff to develop their careers.
• Playwork staff concentrating on delivering the service.
• Low staff turnover.
• Includes children in need and children with additional support needs.
• Few problems with the security of tenure and the quality of the premises.

The second example has the following benefits.

• Administration functions, such as collecting fees and dealing with the payroll are carried out centrally.
• Staff can be shared across the five clubs although the service wants to maintain continuity in each club as far as possible.
• A training and development officer who is responsible for staff development in all clubs.
• Opportunities for playwork staff to develop their careers.
• Includes children in need and children with additional support needs. Two members of staff are trained in sign language.

Two clubs in the second example said they were never likely to be self-sustaining and would need ongoing funding. But they are part of a larger group of clubs in the area.

These models could work in other parts of Scotland.

Managed by the local authority

The consultants looked in-depth at one local authority example. The local authority aims to set up four OSC services or groups of clubs. The local authority employs an economic advisor who deals with financial issues. The local authority believed that there might be a better way of providing good-quality, sustainable OSC than by the parent-led model. Their model has the following benefits.

• Management and development functions are the responsibility of the local authority.
• Each group of clubs has a co-ordinator responsible for managing existing clubs and developing new clubs.
• Each group is to have a parent advisory group, so keeping parental involvement but in a more focused way.
• A training officer is to be employed to identify and deal with training needs.
• Includes children in need and children with additional support needs.
• There will be extra nursing and playwork staff to support children in need and children with additional support needs.
• Staff can be shared across the clubs. There is a pool of relief staff.
• Opportunities for staff to develop their careers.
• The OSC staff are council employees who benefit from the same terms and conditions as other council employees.

The aim is for each group of clubs to be sustainable by income from parental fees. The services are not yet fully set-up, and so it will take time to assess the success of this plan. But there is a comprehensive funding strategy that the economic advisor will be monitoring.

This model could work in other parts of Scotland.

Privately-run OSC

The consultants looked in-depth at one privately run OSC service. It also provides care for children below school age. The nursery and OSC service is in purpose-built accommodation in the grounds of a local primary school. The local enterprise company helped with financial support in setting up the service. (LECs can also support other models of OSC). This model has the following benefits.

• Staff in OSC can work with younger children in the nursery.
• Staff can have full-time hours.
• Includes children in need and children with additional support needs.
• Commitment to staff development and training.
• The management are working on a formal recruitment procedure.
• Management information systems in place to make sure of good
  forward-planning

Income is solely from parental fees. OSC covers its costs by being part of a wider childcare service.

This model could work in other parts of Scotland. But if it was set-up in a disadvantaged area, for example, in a Social Inclusion Partnership, it may not get funding from some organisations because these organisations do not fund private enterprises.

Outsourcing management and business function

The consultants looked in-depth at one voluntary organisation that provides different childcare services and the business and management function to three clubs in different areas, including a SIP. This model has the following benefits.

• The voluntary organisation has the skills, experience, knowledge and contacts so that it is aware of all the funding opportunities and it can prepare strong funding applications.
• Regular cash-flow projections are prepared for each club by the voluntary organisation. This allows staff and parents on the management committee to focus on the childcare rather than day-to-day financial management.
• The OSC manager works full time which means there is always someone available to deal with issues. The OSC manager oversees the planning of the programme activity in the individual clubs.
• Includes children in need and children with additional support needs.
• The clubs can be more sustainable because of the funding between services (cross-subsidy).

This model could work in other parts of Scotland. To make it
cost-effective, there needs to be a 'critical mass' of childcare services, either OSC or a mix of OSC and nursery provision that outsource business and management functions to the voluntary organisation.

Workers' co-operative or employee-ownership organisation

The consultants looked in-depth at one employee-ownership organisation. Through a mapping exercise, the consultants found only three
employee-ownership organisations. The one the consultants looked at is owned by four 'workers'. They employ playworkers. The founding members decided to set up and manage their own club to avoid some of the difficulties they had experienced working under the parent-led model. This model has the following benefits.

• There is a full-time co-ordinator. The four members are responsible for management, planning, administration and financial issues.
• Staff turnover is low.
• Commitment to staff development.

The employee-ownership organisation is self-sustaining, but only just. Also, apart from the co-ordinator, the members who work in the club when needed do not have an income. Parental fees are set at a level to make sure that costs are covered.

This model could work in other parts of Scotland but there would need to be financial help to give all 'workers' a wage and to make it more sustainable.

Social enterprise

The consultants looked in-depth at one social enterprise model of OSC. It provides childcare using an Intermediate Labour Market (ILM) programme to develop the childcare workforce. There are three OSC clubs. This model has the following benefits.

• There is a co-ordinator who manages the services, develops policies and procedures, buys equipment, makes sure of the quality of services and provides support to the team leaders at each club.
• ILM staff, who were previously unemployed in the local area, are employed for one year at the OSC service and have the opportunity to gain a relevant qualification while training in the job.
• Commitment to staff development and training.
• Relatively good career opportunities.
• Places available for children referred from social work.

The clubs are sustainable because the chief executive of the social enterprise organisation and the staff in the central office apply for funding from a variety of sources.

This model could work in other parts of Scotland.

Conclusions about different models

The consultants conclude that all the models have a positive effect on sustainability, quality, ability to meet demand, staff development and access to the services. Some of the models offer better solutions to sustainability concerns than others.

Parent-led management committee model

Over half of clubs are managed by parent-led committees. Parents who give up their time in this way deserve full credit and recognition. Indeed, OSC would not be here today if it was not for parents seizing the initiative and opening up clubs to meet childcare needs in local communities.

While there are strengths in the parent-led management committee model, there are also weaknesses, which many parents acknowledge. Hard-pressed working parents often find it difficult to give up enough time to manage the club. It can be difficult for parent-led management committees to make sure they have the range of skills, knowledge and experience to cover all the management and staffing issues that arise. These include financial management; employment legislation; staff recruitment and development; budgeting; preparing funding applications; and dealing with the Working Families' Tax Credit (WFTC). There can be a lack of continuity as parents only tend to be involved while their children go to the club. Issues can also arise in setting and raising fees, and collecting bad debts.

These problems can have a negative effect on the sustainability and quality of the service. The consultants' report looks in greater depth at the issues affecting the sustainability of the parent-led model. They then reviewed types of business support to clubs. This is discussed in the next section.

Review of business support

The consultants looked at the following types of support to the parent-led model of OSC, and other models.

• The Kids Club Direct or 'club-in-a-box' package
• Business consultancy support
• Sharing skills among clubs within an OSC network
• OSC development worker.

The contact details for all are in Appendix 6.

Club-in-a-box

A private company developed club-in-a-box. It is an IT package to provide the systems, policies, procedures and software to develop and run an OSC club. It also provides guidance on preparing applications for funding and on price-setting and fee structures. There is a section in club-in-a-box on staff training and induction.

The consultants found out that club-in-a-box is used in most clubs in 12 local authority areas. There is support at national level (by the Scottish Out of School Care Network) and at local level for the product.

Business consultancy support

In some areas, consultants or other agencies (for example, the Small Business Gateway) provide business advice to OSC services. One local authority reviewed by the consultants wanted to find out the current circumstances of all clubs and identify their individual business management needs. The local authority contracted with the Small Business Gateway and a community enterprise support organisation to do the work. This type of support is tailored to the individual needs of clubs. It has encouraged clubs to examine their own sustainability through parental-fee income and has helped clubs to improve their financial management systems.

Sharing skills within an OSC network

There is an OSC network in all local authority areas. The example reviewed by the consultants is in a semi-rural area. The local authority and the OSC clubs developed the network. The network supports OSC, provides a forum for the sharing of ideas, and helps with training.

There is no real effect on sustainability. But a network could have a positive influence if it helps clubs with financial management systems.

OSC development worker

Some local authority areas have an OSC development worker to support OSC. Where there is such a person, there is also likely to be other forms of support, for example, an OSC network or business-skills training. In the area reviewed by the consultants, the development worker provides all sorts of support including advice on starting up clubs, supporting the expansion of existing services and help if there is a crisis. The development worker also aims to raise the profile of OSC in the area.

The consultants found clear evidence that having a development worker improves the quality of OSC services. For example, the development worker organises training to improve services.

The consultants found that a development worker can help clubs become sustainable. The development worker knows about costs, fee-income, pricing structures and so on.

Conclusions about business support

The consultants concluded that all types of business support are useful (especially the OSC development worker who can provide solid support). In some cases the effect is limited or short-term. For example, members of parent-led management committees change over time and the new skills that are developed could be lost as members leave. Clearly, the sustainability of clubs will depend on a range of factors and the parent-led model can work well if the circumstances are right.

Childcare Tax Credit

The Childcare Tax Credit helps working parents with the cost of childcare. It should also help providers become more stable if a lot of parents take up the Childcare Tax Credit and if providers take account of the extra resources available to parents when setting fees. But there is concern that not many people know about the Childcare Tax Credit. There is information about the credit, and changes from April 2003, in Appendix 4.

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