Five years ago North Tyneside had 95 nursery places for children from deprived backgrounds. Now it has more than 400, half of which are for the needy.
The council began in a small way five years ago, by expanding its two day nurseries and making a charge to parents who could afford to pay for the extra places. Then it expanded into after-school care, holiday schemes and a nanny agency, followed by a consultancy service for employers on childcare.
A contract to run a nursery for Department of Social Security offices just outside the council's boundary followed, and further work rolled in from as far afield as Ipswich and Glasgow. In 1992 the council decided to set up an independent, non-profit-making company to run the services, and Childcare Enterprise Limited was born.
Last year Brent council advertised for an organisation to take on its nursery services. Childcare Enterprise applied and won a long-term contract for seven nurseries in the borough.
Jackie Doughty, the head of children's services for North Tyneside and also chief executive of the company, said that plans to work with the private sector must be carefully monitored to ensure that quality is maintained.
"The situation that our company is in is that there are certain standards laid down about quality of service and the employment conditions of staff. There aren't lots of hungry shareholders and so it's slightly different from some private sector arrangements," she said.