A report, Early years: Progress in developing high quality childcare and early education accessible to all, published by the NAO last week, assessed improvements to the availability, affordability and quality of childcare in England since the launch of the national childcare strategy in 1998.
The report said that although 626,000 places had been created in England, 301,000 places had closed and there remains a huge variation in provision across the country. Most are out-of-school and holiday places, with 96,000 for pre-school children. There is a lack of availability in deprived areas and a lack of services for children with disabilities coupled with insufficient staff training.
NAOhead Sir John Bourn said, 'The Government has made impressive progress in creating new childcare places and in providing early education for pre-school children since 1998, but not enough of these new places are yet in deprived areas where they would most benefit children and parents. The Government's investment will be wasted if the new provision is not viable.
'More training is needed, especially for childminders, and providers need more support to help them manage their businesses.'
The report made a number of recommendations, including expanding provision locally where needed and concentrating on integrated services; offering more training and business support to childminders and promoting childminding networks; supporting providers to develop business planning; and giving more training in caring for children with disabilities and special educational needs.
The NAO surveyed more than 700 early years providers for the report. Half of the new providers questioned said that they did not know what they would do when their start-up funding ended. Many also did not know how many places they needed to fill to break even, and fewer than half said they were able to cover their costs.
Few early years providers said they planned to expand. Most said they would need more funding and cited a lack of space and difficulty finding premises. Childminders were the most likely group to consider expansion, with a third saying they planned to create more places.
The report also raised doubts whether the numbers of qualified childcare staff would grow sufficiently to meet the Government's target for additional places.
Rosemary Murphy, chief executive of the National Day Nurseries Association, welcomed the report, but said its recommendation for more training and support to improve providers' business skills missed the point. 'Nurseries are working in a market that has been massively skewed by short-term Government initiatives,' she said. 'What the nursery sector needs is a clear long-term vision from the Government, so it can use its energy and experience to develop the high-quality childcare provision that parents clearly want.'
Gill Haynes, chief executive of the National Childminding Association, welcomed the report's highlighting of 'the vital role that childminding networks play'.
The Government has spent 14bn on early years since 1998, but parents still foot most of the bill, paying out 3bn a year. Although 40 per cent of families on low incomes receive free provision, 20 per cent of families pay for all of their childcare.
In response to the report, children's minister Margaret Hodge said, 'We've come a long way since the introduction of the first ever national childcare strategy. We need to do more, but it's important to recognise the progress that has been made in a relatively short space of time.' She said the latest figures showed there are now 450,000 more childcare places than in 1997.
The NAO surveyed more than 700 early years providers and 900 parents of nought to four-year-olds about their experience of early years settings.
The report also found that nine out of ten childcare providers were satisfied with the Ofsted inspection process, but most criticism tended to come from childminders and related to administrative delays.