GoodStart Childcare Ltd appoints new Chief Executive

Respected public administrator and healthcare CEO Julia Davison has been appointed Chief Executive of GoodStart Childcare Ltd, Chair Robin Crawford announced today.

GoodStart is a not-for-profit organisation that was established in May 2010 by Mission Australia, the Brotherhood of St Laurence, the Benevolent Society and Social Ventures Australia to acquire and run 661 ABC Learning Centres.

Ms Davison comes to Australia’s largest childcare operator from a long career as a health services administrator and senior public sector executive, including five years as the chief executive of Flinders Medical Centre in Adelaide and eight years in senior executive roles with the NHS in the UK.

Ms Davison was most recently the Chief Executive of WorkCover SA where she successfully moved the organisation’s focus to enabling clients to return to work and steered significant associated legislative change.

She is the Chair of Catherine House, a not-for-profit working to solve women’s homelessness with sustainable, long-term solutions, is a board member of the Territory Insurance Office, NT, and has previously held a number of other non-executive roles.

“The GoodStart Board is delighted that Julia is taking up our offer to become Chief Executive,” Mr Crawford said.

“Her experience in successfully bringing together stakeholders from disparate organisations and sectors at times of significant organisational change makes her uniquely suited to taking the helm at GoodStart.

“Whether it has been running a large hospital or at WorkCover SA, Julia has been able to strike that important balance between social and economic objectives for the benefit of clients or service users, while ensuring different groups are able to participate in the decision making process.

“Julia is joining GoodStart at a key time, with many exciting initiatives and changes occurring both across the sector and within our organisation.

“GoodStart is in a solid position in our ninth month of operating over 660 ABC Learning Centres, with increasing occupancy rates and healthy surpluses reinvested back into the business, while government reforms are focusing on improving those all important outcomes for Australia’s children.

“The Board is confident Julia is the right person to manage that continued growth at this time of change.”

Ms Davison said she was excited by the opportunity and was looking forward to meeting as many of the parents and staff as possible at local ABC Learning Centres around the country.

“I’m delighted to have the chance to work in one of Australia’s most interesting organisations at a time when there is so much opportunity,” Ms Davison said.
“GoodStart is a unique organisation with a strong, committed staff providing quality childcare to more than 75,000 children every week, families who have a strong connection to their centre, and a Board and management team with a fantastic vision for transforming childcare in this country.

“I’ve always prioritised working in areas where I think I can add public value, and I know that will be the case as I move into the role at GoodStart.”
 
GoodStart’s vision is for Australia’s children to have the best possible start in life through the provision of high quality, accessible, community-connected early learning and care.

Opinion: Bringing together business, government and not-for-profits is a GoodStart

There’s an old saying that if the only tool you have is a hammer, then every problem looks like a nail.

The welfare sector’s traditional approach to large scale social problems has often seemed like that – we forget other people have different, often more useful tools.

But if we want large scale social change we need to leverage the expertise of business and government just as much as the third sector.

The recent creation of the GoodStart consortium to purchase ABC Learning is an unprecedented example – certainly in the Australian landscape – of how this can work.

And the lesson for business is to be open to the idea of social investments, based not on ‘bleeding heart’ philanthropy but on sound business principles.

The first thing to note about GoodStart is that it operates on a large scale – the consortium is the preferred purchaser of 678 childcare centres across the country. It represents a once in a generation opportunity to have a large impact on the quality of early childhood education.

The second point is that the purchase was only made possible through innovative financing arrangements and the expertise of our business partners, including former Macquarie Group executives.

Loans are being provided by both the federal government and the NAB and contributions have been made by significant philanthropists; not through a cash donation but a sub-debt instrument.

GoodStart would be unthinkable with the traditional grant or foundation funding that many charities are familiar with.

And while the business people are doing business, the not-for-profit sector brings knowledge and experience – more than 420 years of in the case of GoodStart’s partners – in working with families and children, as well as a wealth of research on the value of investing in quality early childhood education.

Equal partners, unique skills.

In addition to the financial returns, the social returns – from which business and the community benefit long-term – are significant.

Research on human capital policy by Pedro Carneiro and James Heckman indicates that the social return on investment from pre-school programs can be as high as $8 for every dollar invested.

It’s quite obvious where the returns come – through savings on fixing social problems later in life, including juvenile justice, health and welfare costs.

There’s also more tax revenue from increased employment.

As interesting as the GoodStart example is, it’s slightly embarrassing that it’s an Australian first, because as I’ve said before in these pages it shows we’ve been laggards in comparison to other parts of the world in terms of social enterprise and innovation.

Consider the GAVI alliance, an international public-private-partnership which funds vaccines for poor nations and does it on a truly massive scale.

GAVI has reportedly raised $1 billion in short term financing by issuing bonds backed by sovereign pledges of aid money in future years. The substantial funds will provide economies of scale which will allow for mass vaccinations in a short period of time. By their own figures, the alliance believes they have already prevented 4 million deaths since 2001.

At the other end of the finance spectrum is the well known micro-credit programs run by the Grameen Bank and its founder, Nobel Laureate Muhammed Yousef. The loans have helped drive self-employment and generate sustainable incomes for thousands of the poorest Bangladeshis.

The common theme here is that business has an integral part to play, not by adopting a new set of tools, but by doing what it does best.

And with the Australia economy outperforming virtually any other developed nation and government winding back its spending, the private sector is spoiled for choice in terms of investment opportunities with not-for-profit partners – particularly in the area of developing affordable housing.

If we’re successful, we can not only catch up on the UK and US in our social investment, we can also make real inroads into issues like homelessness that were neglected in the last boom.

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Toby Hall is the Chief Executive Officer of Mission Australia

This piece was published in the Australian Financial Review on Wednesday 24th February

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Media Release: Leading charities provide a new start for ABC Learning

A new chapter for Australian childcare begins today with the announcement that four highly-respected non-profit organisations have formed a new company to purchase ABC Learning.

Subject to finalisation of contracts, 678 ABC Learning centres will be purchased from receivers McGrathNicol by GoodStart, a non-profit company established by Mission Australia and the respected not-for-profits Social Ventures Australia, the Benevolent Society and the Brotherhood of St Laurence.

GoodStart has offered to manage the remaining 26 centres while the receiver finalises arrangements for these locations.

The three charities have more than 420 years combined experience delivering social programs, including high quality childcare built on the critical role of learning and care in the early years.

The venture has been backed by the NAB, one of Australia’s biggest banks, and the Australian Government.

Current ABC Learning Group General Manager Matthew Horton will be appointed CEO on completion of the purchase and the majority of key senior managers will remain in their roles, providing continuity at the most senior levels of the company.

Accrued employee entitlements will be carried over to the new owner.

GoodStart spokesperson Maree Walk said the company will operate the centres to the highest standards of education and care, with financial surpluses reinvested back into programs that improve childcare access and quality.

“Today marks a new start for parents, children and staff at ABC Learning centres around the country,” Ms Walk said.

“The organisations behind GoodStart’s purchase of ABC Learning are stable and respected, with a proven track record of delivering childcare and other social programs with professionalism, integrity, and a focus on the needs of children and families.

“GoodStart will build on the work undertaken by ABC Learning’s current management, who have done a great job stabilising the business and restoring confidence in the centres, and staff, who have continued to provide a fantastic service to parents in often uncertain circumstances.

“The mini baby boom children are now reaching an age where childcare may be required, so the timing of this announcement couldn’t be better for parents.

“GoodStart will provide the continuity and care parents are seeking, and we encourage them to make contact with their local ABC Learning Centre to see if it is right for their children.”

Ms Walk said the centres will continue to be run under the ABC Learning brand.

The new company’s aims are:

• Provide high quality, accessible and stable early childhood education and care;
• Work with families to support them providing the best possible foundations for their children;
• Be an integral part of the local communities in which the centres operate;
• Retain, attract and develop high quality staff at each level of qualification; and
• Meet key financial targets to generate surplus which can be reinvested in programs that improve childcare access and quality.

GoodStart will have charitable status under tax laws, and will operate with the business disciplines of a publicly-listed company.

The company has received financial backing from the founding organisations and a number of private benefactors including businessman Robin Crawford, the independent chairman of the new company.

This has allowed the company to obtain debt funding from NAB. The Australian Government has also assisted by providing $15 million in medium-term loan funds.

These funding sources have provided sufficient capital to finance the acquisition of the business and funds to support day to day operations.

In addition to Mr Crawford an interim board will comprise the CEOs of the founding organisations, Toby Hall (Mission Australia), Tony Nicholson (Brotherhood of St Laurence), Richard Spencer (Benevolent Society) and Michael Traill (Social Ventures Australia).

Following completion of the transaction a new board will be appointed with appropriate early childhood and business skills and experience.

The board will be guided by an Early Childhood Expert Reference Group, which will provide recommendations on areas including educational programs and priorities, staff training and professional development.

“Recent history has demonstrated the provision of good quality childcare and education must be undertaken with the business disciplines necessary to sustain operations over the long term,” Mr Crawford said.

“Despite the very public consequences of the previous management’s growth strategies, a balanced assessment of the business shows a broad network of generally well constructed and maintained facilities and a 14,000-strong staff that share the company’s commitment to high quality childcare.

“Staff who have a passion for their jobs are critical to delivering good quality care, and we intend to retain, attract and develop high quality staff at each level of qualification.

“We welcome this week’s COAG announcement on national standards for childcare and early education and look forward to working with the Australian and State Governments on their plans for the sector.”

In April 2009 Mission Australia acquired 29 former ABC Learning Childcare Centres and has since been successfully operating them under the Mission Australia Early Learning Services banner. The purchase of 678 centres by GoodStart will not affect this arrangement.