The report by the National Audit Office, published today (24 April), argues that the Government’s timetable for the expanded offer is ‘ambitious’ and set amid ‘significant uncertainty around feasibility, costs and benefits’.
The NAO, an independent body which scrutinises public spending for Parliament, highlights issues with the planning and delivery of the programme, including the Department for Education’s inability to consult with the sector ahead of the announcement of the expanded offer due to restrictions on Budget announcements.
It also says that the DfE set dates for the rollout of the hours without understanding local authorities’ and providers’ capacity and capability to deliver an ‘unprecedented’ level of growth in the workforce and new places. It had just 13 months from the announcement of the expanded offer to prepare for rollout.
According to the NAO, the DfE originally planned to pilot the expanded offer early in some local authorities, but cancelled this due to affordability constraints.
While the department opted to introduce entitlements in phases to reduce risks, the report argues that the fixed timetable does not include flexibility to reflect uncertainties.
Places and staff
It also argues that modelling to estimate the places needed include assumptions that depend on fluctuating variables such as parental demand.
To expand new and prospective providers need confidence in sustainable funding and parental demand, but the NAO says these are ‘uncertain’.
It suggests the Government knowingly underfunded places previously.
Going forward with the rollout of the offer, the report highlights the challenge faced by early years providers to recruit enough staff to support the additional places the DfE predicts will be needed by 2025 – a total of 85,000. The NAO says the projection that 40,000 additional staff will be needed for the full rollout is ‘ambitious’ given the workforce only increased by 5 per cent between 2018 and 2023.
It highlights the risk of unintended consequences with large numbers of new or less qualified staff entering the workforce, including jeopardising the quality of provision; reducing the number of places available for vulnerable children and widening the attainment gap.
Meg Hillier MP, chair of the Committee of Public Accounts, said that DfE needs to clarify with urgency what it will do if the early years sector cannot recruit the staff it so desperately needs, to avoid disappointing tens of thousands of parents over the next 18 months.
Supporting more parents into work?
The NAO also questions whether the expanded entitlement will achieve the Government’s objective of supporting more parents into work. DfE has estimated that across 2024-25, 57 per cent of children taking up the new entitlements will already be using childcare.
When its Investment Committee approved the business case in September 2023, DfE estimated employment-related benefits of £7.8 billion (40 per cent of total benefits). Its most recent analysis, in March 2024, estimated employment-related benefits of around £5.6 billion (35 per cent of total benefits), however, explains the report.
The NAO says there remain significant uncertainties in how parents of younger children will respond to the new entitlements.
The report makes a number of recommendations to DfE, they include:
- A commitment to monitor the implementation of the new entitlements, so the expansion does not negatively impact or displace those children who may be more challenging or costly to support.
- Measuring the impact that interventions, including revised funding rates, have on staff and early years places, to understand how the programme may need to change to achieve the next two milestones and its longer-term outcomes.
'The next phase of the reforms will be significantly more challenging'.
Head of the NAO, Gareth Davies, said, ‘Following the Spring Budget 2023, the Government quickly established a programme to extend early years entitlements and sensibly staggered its rollout to reduce delivery risks.
‘Despite the crucial role providers will play in delivering these reforms, consultation with the sector was hampered by the restrictions that apply when developing budget proposals. DfE then cancelled early testing plans, which exacerbated the significant uncertainty about the sector’s capacity and financial sustainability.
‘The next phase of the reforms will be significantly more challenging, with little contingency and flexibility in its ambitious timetable. The department must monitor the programme closely and respond promptly to emerging risks.’
Meg Hillier MP, chair of the Committee of Public Accounts, commented, ‘The Department for Education (DfE) expects to meet its interim April 2024 target to extend Government-funded early years childcare. However, it missed opportunities to learn by cancelling early testing plans which would have helped it better understand, and mitigate against, the challenges local authorities would face when expanding entitlements.’
Government urged to pay attention to report
The sector called on the Government to pay attention to the concerns raised in the report, with many urging the DfE to develop a workforce strategy. The Early Education and Childcare Coalition argued that the DfE’s current recruitment campaign is no substitute.
Early years organisations and charities also raised concern over the NAO’s fear that children from disadvantaged backgrounds and those with additional needs will be negatively impacted by the expanded offer.
Early Education, Pregnant Then Screwed and Coram Family and Childcare urged the Government to address underfunding of places, which continues to be unresolved.
Additionally, the Early Years Alliance and National Day Nurseries Association (NDNA) called on the Government to provide the sector with more support.