One of the big challenges in prevention is how to take effective programs “to scale” so that they will work wherever they are introduced. As things stand, most effective prevention programs are delivered to a tiny proportion of the children who might be expected to benefit.

This week Australia faced the opposite kind of problem: what to do when a single operator providing children with services on a prodigious scale goes belly up. [See: Child care crunch – as easy as ABC]

ABC Learning Centres went under with debts of $700 million, with accountants, competition watchdogs and the taxman joining the creditors banging at their doors.

The Australian Government stepped in with a rescue package of $15 million to keep things ticking over until the end of the year. Even so, the future of 400 ABC centers is looking bleak. The fall-out will be felt in Canada, Japan and the US, where Edmund Groves’s business also operates.

ABC is a specialist in preschool services, which under the right conditions can address a number of risks to health and development. But the growth of the sector is not explained by society’s commitment to children’s well being. The catalyst is the economy. It depends on mothers, not children. It needs mothers to go out to work and to create the need and the demand for early years centers.

The smart observers at prevention conferences are generally the ones who stand up in the sessions on Type II translation and say “It’s Starbucks we should be studying if we want prevention to go to scale”. One of the discoveries of such a study would be that when the economy is down, Starbucks closes outlets – more than 60 across Australia since the global financial crisis started to bite.

Child well-being ebbs and flows with the economy but not in the same direction. A recession increases risks to family life and child outcomes; an economic downturn is more likely to be the precursor of more prevention activity, not less.

So the ABC debacle raises fundamental questions about the role of the private sector. Many western developed nations are in a third decade of the after-burn of the Thatcherite or Reaganite economics that has steadily diminished the role of state-run services. But there has been precious little reliable study of the costs and benefits of privatizing utilities.

The parlous state of UK water services is giving some politicians cause to reflect. The hapless British rail commuter can give chapter and verse on the increased costs, largely benefit-free, resulting from privatization.

Like Britain’s railways, ABC Learning Centres are hugely subsidized; the Australian government directly pays the failed company over two-fifths of its income. And like failed banks, insurance companies and car manufacturers, ABC looks first to state government to rescue it from any free enterprise errors.

Many champions of the private sector remain unconcerned. In its leader last weekend, The Australian commented: “While some centers are likely to close ... it will only reflect lack of demand or local over-supply of child-care options. But the industry has plenty of smaller players, and increased competition would be healthy for all concerned.”

Would it really be healthy for the children? It might. The challenge is to find the evidence. As we discover how to take prevention programs to scale, we also need to find out the best way to maintain the impact on children’s well-being. That may signal a role for the private sector. Then again, it may not.

Research and evaluation may provide a better avenue for finding out than the meanderings of the free market.

• For latest news about the developing ABC Learning Centre story see The Australian and, for example, Julia Gillard widens childcare probe.