The Government's focus on expanding provision to children aged two and below is a significant move in recognising that parents – and specifically mothers – need support at an earlier stage to return to the workplace. Arranging childcare for children from when maternity leave ends has historically been hugely challenging for families – in terms of finding suitable high-quality care and also being able to afford it.
According to the DfE's consultation, the average funding rate will be £8.17 for two-year-olds and £11.06 for under-twos in 2024/25. While these rates have been cautiously accepted as ‘encouraging’, there is still a question mark over whether in reality they meet the high cost of providing quality provision for these young age groups –particularly in areas of deprivation where additional funding will almost certainly be required. As sector organisations have flagged, the introduction of this new formula could even result in some local authorities seeing their funding rates for two-year-olds fall next year.
At the same time, the focus on expanding provision for twos and under is a distraction from the pressing issue of ensuring that investment for three- and four-year-olds is sustainable. Right now, nurseries have around ten times more children in this age group, so their funding rates are key to immediate financial viability.
Meanwhile, on page 12, Christine Farquharson, of the Institute for Fiscal Studies, highlights how the number of young children in England is dropping. In 2014-15, when the twos offer was introduced, there were just over 700,000 two-year-olds. By last year, this population had fallen by nearly 100,000. These trends undoubtedly have a direct bearing on the Government's financial calculations and wide-ranging implications for the sector too.