Local operators fear there may now be too many childcare places in at least some areas of the ACT, a dramatic turnaround from a few years ago when parents had to put their child on a waiting list before birth to guarantee a place.
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The calls for a broad strategy to better target where childcare centres should be allowed to open in the ACT comes with the shock news that the Fyshwick Early Childhood Centre will close next month, after 25 years of operation under the pine trees of Maryborough Street.
It has sparked suggestions too many childcare operators are being allowed to open in the ACT without due regard for the enrolments at existing centres, putting them at risk.
There are also concerns the ACT does not have the workforce of childcare professionals to staff all the centres adequately.
The Fyshwick Early Childhood Centre is run by Community Services #1, formerly Southside Community Services, a community-based, not-for-profit, non-government organisation.
Community Services #1 chief executive officer Amanda Tobler said she could not remember the service having to close a childcare centre prior to Fyshwick, which opened in 1991.
The Fyshwick centre will close on June 30, with all 10 staff guaranteed a job and all currently enrolled children guaranteed places at sister centres on the southside.
A letter emailed to parents on Wednesday night or handed to them on Thursday morning said the centre could not be maintained "in its current financial position".
The closure comes after the centre was recently extensively renovated by the ACT government, which owns the building.
Ms Tobler said the closure was due to a gradual fall in numbers that couldn't be sustained, and she praised staff for the high level of care they provided for more than two decades.
"This has been a two-year process for the agency. This is not a decision that has been taken lightly by the board," she said.
"We have put in support, resources to try to build the occupancy of Fyshwick because that was the outcome we had wished for. However, with a quarter of the occupancy we needed, it was not something we could maintain."
Community Services #1 executive director of children and youth Katherine Hellwig said 35 families used the 46-place Fyshwick centre, many on a part-time basis. But the centre needed about 100 families to be sustainable and ensure all places were used across the week.
Mrs Hellwig said childcare centres across the board were finding it difficult to reach full capacity as more and more operators were allowed in, seemingly without the accompanying demand for places.
"I know roughly between the end of the financial year and this year, 15 new centres were opening and there's no regulation on how many centres there can be in the ACT. If you want to build a new childcare centre, you can," she said.
"So we're saturating the market with not being able to support the centres that are already there, whether private or not-for-profit."
MsTobler said some kind of intervention was needed.
"I certainly think something needs to be done," she said. "If it's regulation, if it's limiting places for agencies or for placements across the sector. I think the government at least has to at look at how many childcare places are required instead of just seeking and allowing and processing more and more centres to open."
Communities@Work deputy chief executive officer Lee Maiden echoed those concerns, saying her research showed there were vacancies at every childcare centre in Tuggeranong.
She knew of one example where land had been sold for a new childcare centre across the road from an existing centre that was not full.
"There's certainly no strategy around where we locate them and how many places we need," she said. "Things have changed and we haven't kept up with the change.
"It used to be that the moment you even thought about having a child, you needed to put your name on a waiting list to make sure you got a place. That's not the case any more."
Mrs Maiden said there needed to be more discussions between different arms of the government which sold the land for childcare centres and which helped staff them.
Education Minister Shane Rattenbury earlier this year announced the Education Directorate would conduct a review of the childcare sector in the ACT, and his office this week confirmed supply and demand issues would be addressed, as well as a more strategic approach to the provision of centres.
"It is expected that from the review we will develop a better picture about where services are needed and oversupplied," a spokeswoman said.
Operators said demand for places was greatest for mid-week, particularly for babies, and more likely in the north. However, women working part-time, more grandparents pitching in to care for children, and the government's provision of free preschool were helping to shift the demand for paid childcare.
Australian Childcare Alliance president Gwynn Bridge, who owns a childcare centre in Canberra, said she had been told many operators were at 50 per cent capacity for the three-to-five age group. At least one centre was advertising heavily discounted rates for preschoolers.
The alliance, which represents long-day care owners and operators, supported the calls for a more strategic approach to the provision of childcare.
"I'm certain there are areas which are absolutely oversupplied and more operators seem to be coming into the ACT," she said.
Mrs Bridge said it was not good enough to have a free-for-all in the sector.
"Some governments will argue market forces will prevail and that's okay for fish and chip shops but it's not okay when children are disrupted," she said.
"The friends they make, often for life, in those zero-to-five years, are taken away and dispersed when a centre closes down."
Mrs Bridge said it was not good policy to allow a new centre to open in the same vicinity as one that was not full.
"It's not even good business but the thing is there's nothing to stop it," she said.
Mrs Bridge said the pressure was often put on long-standing centres that had been "pillars of the community" but which were up against new centres that offered "all the bells and whistles" but no assurances the care would be any better.
Northside Community Services operation manager for children services Liam McNicholas said none of its four childcare centres were in danger of closing but he believed community-based, smaller centres were under pressure from the entry of very large centres with a national profile and extensive marketing.
He believed the government response to the previous long waiting lists had been "an overcorrection", particularly through its land release program providing for new centres.
Ms Tobler, meanwhile, said none of the remaining six childcare centres operated by Community Services #1 would be closed. The focus now would be on supporting the staff and families at Fyshwick.
"We are very much committed to supporting our families and retaining them in our community, as we are with our staff," she said.
