Govt gives $34m to keep ABC centres open
December 10, 2008, 1:26 pm
The federal government will provide an additional $34 million to keep 241 unprofitable ABC Learning centres open until March next year.
The decision follows an announcement by the childcare company’s receiver that 55 centres will close from January 1.
The receiver for ABC Learning had earlier said 55 childcare centres will close.
ABC receiver Chris Honey, of McGrathNicol, on Wednesday outlined a plan to provide a childcare place for every child using the company’s services into 2009.
Under the plan, 720 centres will remain within the ABC Learning Group and 55 will close and be consolidated into nearby ABC centres.
Mr Honey said 80 per cent of staff from closing centres would be retained at nearby centres.
He said all children at the 55 centres to close would be offered places at ABC centres within 2.5km of existing ones.
“With the support of ABC Learning Group’s banks and the federal government, we have devised a recovery plan to provide childcare places for every ABC family into 2009,” Mr Honey said.
“Today we are in a much better position than we could ever have imagined just four weeks ago when we were first appointed as receivers and managers.
“We can now shift our focus to transitioning the new ABC Learning Group business out of receivership in 2009.”
Mr Honey said he had sought to minimise the impact on families.
“We have undertaken a detailed review of the consolidating centres and identified capacity at neighbouring centres,” he said.
“We will work closely with parents to ensure their child’s new ABC centre is as close as possible to the previous location.
“I appreciate this solution is not perfect, as some children will need to move to other centres, however we have sought to minimise the impact on families and consider it is the best outcome in the circumstances.”
He said it was possible that among the 241 centres that were not viable under the ABC’s existing business model there were some that could be made profitable and taken out of receivership under an alternative model.
“These centres will continue to trade into 2009 under an arrangement to be announced by the government later today,” he said.
“We are extremely appreciative of the ongoing support of the Australian government throughout this difficult process.”
Mr Honey told reporters that from the 55 centres to close, 100 staff would lose their jobs, 400 would be redeployed on January 1 and 4,000 children would be relocated to other centres.
He said minimising the job losses had been “quite a feat, if you consider this was a corporate collapse, a business in a mess when we took over”.
Mr Honey said in summary that of the 386 centres that were under review, 55 would close, 64 would remain open, 21 would be kept open by the Defence Department, 241 would be subject to a federal government announcement on Wednesday and five were not badged ABC centres.