Private centre, home-based care, Playcentre, kindergarten… the world of early childhood education is a complex and often expensive minefield. No wonder parents and caregivers are overwhelmed when it comes to the best options for under 5s. With most mums and dads in paid work by choice or necessity, the number of preschoolers in care and education facilities is higher than ever. So what should you be looking for as a parent? Why does it cost so much? And which is the best childcare option for you and your child? The New Zealand Herald finds out in a six-part Premium series.
Even before the Covid-19 lockdown, a price war for children was raging on Auckland's northwestern fringe.
After the lockdown, the price war has only intensified, as explosive growth of new daycare centres planned before Covid comes to fruition at a time when demand has suddenly slumped as many parents have lost their jobs or are now working from home.
The new houses on either side of State Highway 16 at Kumeū and Huapai are full of young families who commute long distances to work because skyrocketing house prices have made it impossible to live anywhere closer.
There are no local kindergartens run by kindergarten associations. The nearest are at Taupaki and Waimauku.
Instead the area has lured a growing number of private childcare centres. There are now 12 centres in Kumeū and Huapai (plus a home-based service): one each owned by the two big privately-owned national chains BestStart and Evolve; one Playcentre; and nine others which are either stand-alone private centres or belong to small groups of up to six other centres.
Eight of the 12 have been reviewed by the Education Review Office (ERO) - four rated " very well placed " and four "well placed" to promote positive learning outcomes for children, much better than the national averages of only 14 per cent "very well placed" and 75 per cent "well placed".
But four are too new to have any ERO reports yet: BestStart on Oraha Rd, and privately-owned centres called Just Kidz, Hand and Hand and A Child's Place, all strung out along the traffic-clogged main road.
Four of the other 12 are also advertising 50 per cent discounts for new children who enrol in the next two, three or six months.
Nationally, only about half or fewer of the children enrolled in early childhood education have attended on any day since centres reopened after the Covid lockdown.
That is partly because many children have only ever attended on two or three days a week. But even allowing for this, Early Childhood Council chief executive Peter Reynolds says "demand is down".
"There are some kids who are not going to come back," he says.
"What is the effect of that? It's fair to say that some services may retrench and withdraw into their shell a bit, and some services may close."
Michelle Pratt, whose New Shoots chain has centres at nearby Westgate and Whenuapai, says there was "a massive over-supply" of centres in Kumeū and Huapai that was driving centres into discounting even before Covid.
Spoilt for choice, parents Marianna and Marinko chose partly on location and partly on price. When their daughter Luna turned 1 in 2018 she started part-time at what was then called Building Blocks in Kumeū. When the family moved to Huapai before the lockdown, Luna moved into Hand and Hand, a brand new centre.
"It's so convenient for us as our home is within walking distance of the child centre," Marianna explains.
"We decided to move her because, firstly, it's more convenient for us, secondly, when I saw their ad they were offering 50 per cent off for six months as an opening special, and thirdly, they have a little bit cheaper rates and a better programme."
The family had nothing against Building Blocks, which was rated "well placed" in ERO's last review in 2016 and is now called Heart and Soul , also offering a 50 per cent discount on new enrolments for the first three months.
"She was really happy at Building Blocks, but why not consider moving her?" Marianna says.
"In some cases the smaller ones could be better, but I think the smaller ones tend to not have enough rooms to give better service," Marianna says.
"With all their kids [at Hand and Hand] they do maths programmes and gymnastics, dancing and art. They also do have a van which they plan to use to take children to the shopping centre or to some other playgrounds. It has a big playground, and they have a theme like dinosaurs."
Competing for kids
Northwest Auckland is not the only place where big discounts point to intensifying competition. In the five years to December, the number of NZ children under 5 actually fell by 0.9 per cent, and the numbers enrolled in licensed early childhood education (ECE) fell by 0.5 per cent - but the number of ECE services touting for those children jumped by 8.2 per cent.
Reynolds says housing developers want new centres to add to the "amenities" in their subdivisions, and centre owners are seeking economies of scale.
He points to Provincial Education , a Whangaparāoa-based chain that has quietly bought up 62 centres from the Far North to Christchurch.
"They did the sums, and that said if you grow you are looking to get a better return," he says.
"We have seen a continuation of a consolidation of ownership - more centres being owned by less people. That is more likely to be someone who has owned one or two centres and has taken the opportunity to grow that portfolio to four or five centres."
The sector is still highly fragmented. The 10 biggest groups, including the kindergarten associations, Kōhanga Reo and Playcentre Aotearoa, still own only 45 per cent of our 4690 licensed services. The rest are owned by individuals, small companies, churches and community groups.
After kindergartens, kōhanga and Playcentres, the biggest chain is BestStart , with 261 centres plus three under construction at Whangaparāoa, Birkdale (Auckland) and Timaru.
The company has grown from a single centre opened by Wayne and Chloe Wright in Tauranga in 1996. It listed on the sharemarket as Kidicorp with about 40 centres in 2003, was bought back by the Wrights in 2007 and acquired 124 Australian-owned ABC centres in 2011.
In 2015 the Wrights changed its name to BestStart and turned the company into a charity owned by the Wright Family Foundation, giving it tax-exempt status. In 2018 it appointed former Health Minister Tony Ryall as its chief executive.
In the year to March 2019 the charitable group, which is mainly BestStart , received 70 per cent ($192 million) of its revenue from government ECE funding and 30 per cent ($83m) from parents' fees.
It made a profit of $20.6m, sold assets worth $8.8m, invested $21.2m in properties and equipment and gave away $2.4m in donations to Plunket, the Parenting Place, Brainwave Trust and other projects.
Parents considering BestStart need to look at each centre individually. Its national professional services manager Clair Edgeler says every centre partners with parents to give them what they want.
"In Glen Eden, it's sustainability," she says. "They might value seasonal planting and eating their produce and collecting waste."
In Johnstones Rd, Ōtara, one of 27 centres branded as "community kindergartens" with no under-2-year-olds and slightly less than all-day hours (7.30am-4.30pm), outgoing manager Cathy Govender says parents want their children "to have a love for learning, to be confident, to be able to have a voice".
The Johnstones Rd centre, in an old church building, lacks the real grass and space often seen at traditional kindergartens, but ERO has rated it "very well placed" because of its "rich learning-based play activities and high levels of care".
New manager Ramika Thakur says most parents pay only $10 or $20 a week for 30 hours, and the centre uses government equity funding and Wright Family Foundation grants to run a free van pick-up service for 20 of its 80 children.
Only 61 per cent of its revenue ($86m) came from government ECE subsidies, slightly below BestStart's proportion, reflecting a low occupancy rate of only 72 per cent in its centres compared with an industry average of 79 per cent.
Its NZ chief executive Tim Wong, hired last September after eight years running his own childcare companies in Australia, says the company's seven brands all have distinct approaches.
"A brand like Pascals includes enrichment products such as Spanish lessons and music lessons. We don't do much of that in Learning Adventures," he says.
At Active Explorers Highbrook, a large purpose-built centre for 150 children rated "well placed" by ERO , indoor and outdoor spaces are divided by ages ranging from a quiet baby room to a preschool room aimed at building social competencies.
After 30 years of slow decline largely due to the growing demand for all-day care, traditional kindergartens are preparing to fight back.
The three biggest kindergarten associations - Auckland, He Whānau Manaaki (Wellington) and Kidsfirst (Christchurch) - are working with five smaller associations (Northern Auckland, Tauranga-based Inspired, Taranaki, Napier and South Otago) to form a united body called Tiki Atu: Kindergartens Aotearoa.
"Individually, we struggle to grow and strengthen the kindergarten movement," says Bram Kukler, who is both general manager of the Northern Auckland association and newly-appointed general manager for education and innovation for the Auckland Kindergarten Association (AKA).
"The eight of us are putting our hands up, but it's really around enhancing the strength of the whole kindergarten movement."
He says most kindergartens have waiting lists and could take more children if they had the financial strength to open new centres.
"We would love to double the number of kindergartens," he says.
A key to achieving that is the Labour Government's plan to lift subsidies for ECE services with 100 per cent qualified teachers from next January, eventually requiring all ECE teachers to be qualified - as kindergarten teachers are already.
"One hundred per cent funding would allow us to build the extra kindergartens," Kukler says.
Playcentres have already merged last year into a single body, and both Playcentres and kōhanga reo are negotiating new funding models with the Government.
How to choose
A former public health official who completed a doctorate on ECE centres last year, Dr Mike Bedford, says intensifying competition is driving operators to maximise rolls and minimise costs.
He believes it's a "red flag" if a centre opens on a high-profile road where children will be exposed to fumes, pointing to Wellington's Hutt Rd where BestStart and Evolve have both opened centres between two busy roads and a railway.
(BestStart deputy chief executive Fiona Hughes says the company "doesn't deliberately build on busy roads for marketing purposes" and has to obtain a public health report before opening any new site. Evolve says it hasn't opened any new centres recently.)
Bedford says another red flag is "a new or recently built centre offering a fees-free start period".
"This is a predatory practice that can force good centres to close unless they cut quality," he warns.
Similarly, he says commercial pressures lead to cost-cutting. His doctoral study of 21 Hutt Valley all-day centres found nine sometimes crammed in more children per square metre than the regulations allowed, and all except two sometimes let the temperature fall below the regulated minimum of 16C.
Only five centres had "a reasonable amount of spacious natural area" for children to run around in and experience nature. Most had only artificial grass because it was "low maintenance".
"I've got no problem with private ownership, because some of the best centres in the country are privately-owned," says Bedford.
"But what we see in the sector very clearly is that there is an attractive market, yet people who really care about children and teachers are financially struggling."
ECE Top 10
1. Kindergartens: 654 centres (13.9 per cent of all licensed ECE services)
2. Kōhanga reo: 444 (9.5 per cent)
3. Playcentres: 403 (8.6 per cent)
4. BestStart: 261 (5.6 per cent)
5. Evolve: 122 (2.6 per cent)
6. Provincial Education: 62 (1.3 per cent)
7. Rainbow Corner/Porse: 59 (1.3 per cent)
8. Kindercare: 45 (1 per cent)
9. Barnardos: 41 (0.9 per cent)
10. Nurtured at Home: 20 (0.4 per cent)
Top 10 total: 2112 (45 per cent)
Total licensed services: 4690
Monday: Where do we start?
Tuesday: What are the options?
Wednesday: Why does it cost so much?
Thursday: How young is too young?
Today: The big players.
Saturday: Does my child feel loved?
Read the series at nzherald.co.nz/education