The Government is driving forward the biggest changes ever seen in the care of pre-school children and it is opening up new business opportunities. John Dean reports.

THE nursery is filled with the sounds of children playing. In a corner, three youngsters are asleep side-by-side on the floor beneath blankets. This scene in North Yorkshire is just what the Government wants to see repeated across the country - abundant childcare enabling more parents to join the workforce.This has created an increasingly competitive sector in which the rewards can be substantial.

The Government is determined that schools and nursery operators work closer together to provide nursery care out of school hours, an idea that has come to be known as "wraparound care".

The idea is to help parents who cannot go to work because nursery care does not fit in with their working hours.

The children's centre at Colburn village, near Catterick Garrision, North Yorkshire, is an example of how the system can work.

Based in the library, and a short distance from Colburn Community Primary School, it is run by Children's Enterprise Limited, a not-for-profit company that has been providing wraparound care for a decade, investing its earnings in the business.

The company grew out of the specialist nursery unit at North Tyneside Borough Council, which became so successful that it received increasing numbers of approaches to provide similar services on a commercial basis.

Because the council team was not permitted to operate commercially, the unit evolved into a private company that has run crches for the likes of the Department of the Environment, Food and Rural Affairs and the BBC.

More recently, it has been linking up with schools - three in the region already - to provide nursery care from 8am to 6pm.

Colburn is seen by the company as the model for how the Government system can work.

The centre cares for 32 children, from babies up to four-year-olds. Most are cared for at its children's centre and some are at the school's nursery.

Although the company and the school are separate entities, they work together to ensure that the service can be maintained through the day, allowing parents to take jobs that might previously have been unavailable to them because they could not find anyone to look after their children.

The initiative is backed by North Yorkshire County Council and SureStart, but the company operates as a business, and relies for its income on fees paid by parents.

Some places are funded by organisations such as colleges that wish to help parents develop their skills ready for a return to the workplace or a move to another job.

Debbie Ashby, regional manager for Children's Enterprise, said: "We act as a business and this requires good monitoring of cashflow. We may be a not-for-profit company, but we cannot afford to make a loss.

"We have to make sure we make enough money to keep operating. We have to keep reviewing our operation all the time.

"It is the way forward. What we are doing is giving parents a choice of childcare so that they can assess work in the knowledge that their children are being cared for in a safe environment."

Karen Norris, nursery manager at Colburn, said: "We have had some parents recently who are starting at college and have been given funded places for their children. It allows them to study for careers.

"And we are open all year round, which is good for working parents who maybe cannot take their holidays at the same time as the school holidays."

Colburn's children's centre has created ten jobs for local people and the company as a whole employs an average of 300, rising to as many as 420. Turnover is £3m a year.

Julie Doxford, national operations manager for the company, which has just moved to Annitsford, Northumberland, said it was a competitive industry with a number of major players.

She said Children's Enterprise felt being not-for-profit gave it an edge because the focus of the business was not on satisfying shareholders, but about ensuring a high quality of care.

But Mrs Doxford said the not-for-profit status also presented distinct challenges, because it meant the company did not have large cash reserves to fall back on in lean times, as any surplus was ploughed back into the business.

She said: "We have to make money to keep the company stable, but the ethos of the company is never to compromise on quality of service and to make sure we supply it at a price that is affordable to parents.

"It is a difficult market, but we only chase contracts we can do justice to and we will not chase contracts for nurseries which we believe are too big."

She believes that more and more companies are realising that providing nursery and creche facilities for employees' children makes sense because it makes for happier and more flexible workers.

Mrs Doxford said: "We have done work for government departments and companies which want to offer their own nurseries to help their staff get the work/life balance right."

'All children deserve the best start in life'

The Government argues that all parents should be able to secure a fair deal for childcare that would make it easier for them to go back to work.

Earlier this summer, Children, Young People and Families Minister Beverley Hughes set out her goal of enshrining in law parents' right to accessible, high-quality childcare and early years provision.

She launched a national consultation on planned legislation that ends this month.

The Government said the move stressed the importance of giving every child the best start in life and offering parents and carers more choice about balancing work and family life.

Ministers want to see councils taking the lead in the provision of such childcare.

The minister said: "All children deserve the best start in life, and we know that early education and childcare is central to ensuring that.

"High quality integrated care and education help lay the foundations for success at school and in later life, and help to address the effects of poverty and disadvantage.

"But the availability of childcare is also a key factor in allowing parents to make a real choice about how they better balance their work and home lives.

"What we are announcing is a bold move which will help ensure all parents can expect a reasonable level of access to affordable, flexible childcare.

"It will also raise the quality of childcare for those crucial birth-to-five years through our new quality framework for that age group, regardless of the setting.

"These measures will ensure that the best possible outcomes for the youngest children and locally available childcare for parents are never again relegated to the sidelines, but remain firmly placed as legal obligations for government and public authorities now and in the future. "What this means for parents, whatever their backgrounds, is the certainty of knowing that high-quality local services will be provided to support them and their children in ways that suit their needs.

"Early childhood is a time of vital importance in children's development. Children's experiences in the earliest years of their life are critical to their subsequent development.

"They should be enjoyable, secure years, but full of fun and challenge."