In 2020, 82% of ECEC services were rated Meeting and Exceeding NQS, up 4% from 2019. NQS ratings indicate how a service is performing in fulfilling quality standards related to education, health, professionalism and collaboration. Data from Early Years Research 2021 shows that NQS ratings could have a significant impact on occupancy, possibly due to the reputation that it allows services with high ratings to enjoy in comparison to services rated Working Towards NQS.
Services Exceeding NQS ratings record 12% higher occupancy than average
As COVID-19 impacted childcare attendance, services suffered significant losses in occupancy during quarter 2 of 2020. 14% of LDCs were at less than 30% capacity. When observed for NQS ratings, services with lower ratings turned out with the lowest occupancy at 49%, while those that were Exceeding NQS were at 12% higher occupancy than average.
The most recent Quarterly Snapshot of the ECEC sector reveals that in the last quarter of 2020, services rated Working Towards NQS dropped further to 16%. The best performing state was South Australia at only 14% services needing improvement, compared to Western Australia where a quarter of services were rated Working Towards NQS.
94% Preschool and Kindergarten were rated Meeting NQS and beyond
Out of all types of services, PSK performed the best, while 86% OSHC services and 73% LDCs met the NQS in 2020. 60% PSK are Exceeding national standards, followed by 27% LDCs and 14% OSHC.
Since the start of the ratings, childcare services have improved performance, and 43% more services are now rated Meeting NQS and above. Since last year, 307 less services were rated Working Towards and 30% of all centre-based services were rated Exceeding and Excellent.
In Queensland and Victoria, more than 60% of services are rated Meeting NQS, with 9% more Long Day Care (LDC) and 14% more Outside School Hours Care (OSHC) services meeting NQS than in 2019.
LDC enrolments worth up to $92K and OSHC worth $38K annually
With 5 days of weekly care and an enrolment period of 3.5 years, LDCs can maximise the value of their enrolments to $92,000. Currently, this potential revenue is not being met by a vast majority. In fact only 3% of LDCs are able to fully utilise their capacity, and the typical enrolment is worth $29,000 with 5 days in care for 1.1 years.
Research also reveals that older children are more likely to stay in care for longer than infants under the age of 1, who stay for less than 6 months. Since younger children contribute more to revenue, as the table below shows, centres may benefit from investing more into driving enrolments for this age group.
OSHC enrolments are not being maximised either, with the typical service earning $6,000 at an average enrolment period of 22 months, 3 days a week and at a charge of $26 per session. In comparison, if a service could push up its enrolment period to 6 years at 5 sessions per week, the annual worth could be up to $38,000.
Enrolment for large OSHC services is 42% longer than average as children stay enrolled for 8 months more than they do in smaller services. The average enrolment period is 22 months, and, just as is the case of LDC, children under 1 year of age tend to switch more frequently than older ones.