Toddler Market

At Toddler Group on Friday we heard the news that one of the local nurseries, based in a little old tin chapel round the corner from the church, is closing. When I checked, the manager told me in a laconic email 'our business model was unsustainable'. Another 'provider' will be re-opening the nursery in May, supposedly, and the staff will have the opportunity to re-apply for their positions, but in the meantime the impact is not only on them, but also on the families who rely on an amount of childcare to manage their own work schedules. Hornington and Swanvale Halt have something of an oversupply of children at the moment, and all the other local nurseries are full. I have only a vague idea how early-years provision works but I gather the funding is a mixture of Government subsidy to parents and their own resources. I wonder whether a new provider will be able to do any better out of what's available.

Market economics says that wherever there is a need it will be supplied. I've just finished reading Tim Harford's The Undercover Economist which takes a breezily confident view of the market, from coffee stands on railway stations to sweatshops in developing economies, even hinting that a market system in schooling might be more efficient (economically speaking) than what we have now. I can usually see his point, even as regards the sweatshops - they may well be better than the alternatives on offer - but a complacency shines forth from the book's pages more than once. It would be good to have more of an acknowledgement of the waste involved in the market process, the losses into the swirling waters of adaptation and change. Here in Swanvale Halt, the losses resulting from the closure of the nursery could include the jobs of some of the customers, not just the staff, and there's every likelihood that could have a lasting impact on the lives of their children: it's hard to predict.

The market solution (I presume) would be to have more providers than the market can actually support at any one time, so when one of them folds (as they will) it doesn't impact the system as a whole. This is all very well, but the investment involved in opening a nursery is considerable. As well as the cost of the plant, there is the significant training and certification the State demands of at least some of the staff involved. You can't just magic trained childcare up overnight. It seems to me that there's a tradeoff here: you either have flexibility and standards enforced by competition, or you enforce standards by statute and inspection and sacrifice something in flexibility. Combining secure and qualified provision with flexibility is a very hard trick to pull off indeed. I suppose it boils down to a choice as to how important a society thinks a good is, and how much waste, and of what form, it's prepared to tolerate.