NSW inquiry finds lax rules, for-profit childcare allowed predators to abuse children

A scathing inquiry into New South Wales’ childcare sector has found systemic weaknesses allowed predators to work in the industry and abuse children.

In its final report released Wednesday, an upper house inquiry into the Early Childhood Education and Care (ECEC) sector concluded that “the proliferation of for-profit services and a lax regulatory approach” had permitted predators to operate in childcare and harm children.

The report stated that operators backed by private equity have “no place” in the sector, and that the state’s early education regulator “failed to respond appropriately” to services with “extensive histories of non-compliance, breaches, safety incidents and persistently poor ratings”.

In her foreword, chair and upper house Greens MLC Abigail Boyd said the sector was “in crisis”.

“While the sector is entrusted with the safety, wellbeing and development of our youngest children, the evidence before this committee revealed a system under profound strain – one that is failing too many children, families and educators,” she wrote.

The inquiry, established in March last year, held public hearings from August to October amid growing national concerns after reporting by the ABC’s Four Corners program and high-profile arrests of childcare workers in multiple states for alleged child abuse, including Ashley Paul Griffiths, Joshua Dale Brown and David William James.

Last year, a Guardian Australia investigation revealed that most childcare workers reported for allegations of child abuse are allowed to continue working because police and regulators struggle to block them if the claim does not result in a criminal conviction.

At an August hearing, NSW police’s child sexual abuse unit called for a national database of childcare workers who have had “red flags” raised that fall short of prosecution.

The following week, the federal government announced childcare workers would be placed on a national register, alongside a trial to introduce CCTV at hundreds of centers, mobile phone bans and mandatory staff training.

The inquiry found that some ECEC services had held “working towards” ratings – indicating they do not meet a standard in one or more of seven assessment areas – for years without being shut down by the NSW Early Childhood Education and Care Regulatory Authority.

It heard evidence that long day care services were more than twice as likely to have “working towards” ratings, at 9%, compared to not-for-profit and public services at 4%.

In its submission, industry peak body Community Early Learning Australia said the sector had been “incentivised to deliver services that meet minimum standards in order to maximise the number of licensed places, rather than prioritising children and educators’ wellbeing”.

Boyd wrote that the “race to the bottom, where everybody can get rich – except the people actually educating, caring for and nurturing children – has hopefully reached the limits of its predatory expansion”.

She said the recommendations in the report sought to “curtail profiteering” and included a clear finding that private equity backed services had “no place in the sector”.

The crossbench and opposition-led inquiry recommended the government introduce a policy on sector composition to reduce the overall percentage of large for-profit providers in favor of “not-for-profit, government-run and community-run services”. It found for-profit providers were of lower quality and less safe for children.

That includes the “provision of favourable lease arrangements” for services on state and local government land. The inquiry found that developers influenced decisions about where services were established, with a negative impact on availability in lower socioeconomic and regional areas.

The inquiry found that CCTV in childcare centers, for which a national trial is now underway, was a useful regulatory and investigative tool but “no substitute for adequate staffing and supervision”. Experts have raised concerns about hacking, data storage and the potential use of AI to produce illegal and harmful material.

The report recommended the government look at preventing apprentice and trainee childcare workers from being left unsupervised with children and that services rated “working towards” or lower not be allowed to take student placements or open new centers.

In a statement, deputy premier and early education minister Prue Car said the government would “consider the committee’s recommendations and respond in due course”. She said the report acknowledged the government’s commitment to deliver 100 new public preschools by 2027 to “help rebalance the early learning sector in New South Wales”.

The NSW Early Learning Commission, which has replaced the NSW ECEC Regulatory Authority, has been contacted for comment.