I have been prompted to write this article by the many ongoing enquiries I receive from intending purchasers and developers of childcare centres about how to obtain a ‘Licence’ to operate a childcare centre. These potential childcare centre operators typically call when they are in the final stages of negotiations to purchase a currently operating centre or to lease an almost completed building. When I convey to them the processes of obtaining this ‘Licence’ and the timeframes involved, their excitement is usually replaced by disbelief. Surprisingly and, more often than not, the other stakeholders (e.g. vendors of the childcare centre in question) are also caught by surprise. The delays that result from their misconception can be frustrating and costly.
So what are these misunderstandings about obtaining a ‘Licence’ to operate a childcare centre?
The first relates to the misuse of the term ‘Licence’. While the term is loosely correct, centres actually require a Service Approval to operate.
The second is about the process of obtaining a Service Approval. Prospective purchasers often do not realise that, before they can apply for a Service Approval, they need to hold a Provider Approval. In other words, obtaining a Service Approval is more accurately described as a two-step process whereby the prospective operator applies for a Provider Approval and, once the Provider Approval has been issued, then applies for a Service Approval (for a new centre) or Transfer of Service Approval (for a currently operating centre).
The next misunderstanding relates to the timeframe that it takes to obtain these Approvals. Prospective operators usually anticipate that these Approvals will take only a short time to obtain. This is far from reality. The Regulatory Authority has a mandated 60 days to determine a Provider Approval and a mandated 90 days to determine a Service Approval. This means obtaining the Approvals to operate a centre can take up to 150 days. In certain cases, two Applications can be submitted together, and this will lessen the taken. In other cases, the time taken to process the Applications can be considerably longer because the time to determine each Approval is calculated from the date that all of the accurately completed forms and documentary evidence required to determine each Application has been received by the Regulatory Authority. Evidence includes a Working With Children Check for any person listed in the structure of the applicant’s legal entity, and these checks take several weeks to obtain. Further the Regulatory Authority has recently implemented an ‘Enhancement Process’ (interviews and/or written tests) which can result in a longer timeframe to process the Applications as the mandated periods do not commence until the Enhancement Process has been completed.
By now, you would realise that it is prudent to prioritise submitting these Applications and focusing on providing and doing all that is required by the Regulatory Authority to achieve a successful outcome. You would also understand that obtaining these Approvals in a timely manner is pivotal to successfully purchasing/developing a centre. Prospective purchasers accept that they need to pay their architects, lawyers and other specialists but often hesitate to engage a consultant to prepare and submit these Applications because the task seems relatively easy. However, providing the Regulatory Authority with the accurately completed forms (dotting ‘Is’ and crossing ‘Ts’ – the Regulatory Authority is necessarily pedantic), pertinent documentary evidence, and information (interviews and tests) in the manner and timeframe required is far from easy.
Summing it up, Provider and Service Approvals are pivotal to potential operators of childcare centres, and informed decision-making about how to obtain the Approvals is vital and best completed by a specialist.
Article by Dr Brenda Abbey – Childcare by Design
Dr Brenda Abbey is the owner and operator of Childcare by Design. Dr Abbey has more than 30 years experience in the early childhood sector. The extensive and multi-faceted experience she gained during this time together with the effective working relationships and collaborative networks she formed with government and non-government agencies, peak bodies, early education and care services and other professionals ensure best possible outcomes for her clients.
Find out more about Brenda’s services here http://www.childcarebydesign.com.au/