The announcement that a free childcare entitlement of 30 hours per week would be extended to all children whose parents work from age 9 months up by September 2025 has generated a lot of excitement.
If landed, it could prove transformational, unburdening families from exceptionally high childcare costs in the earliest years, reducing poverty, empowering parents to make positive choices about going back to work and enabling greater numbers of children to access quality experiences that enhance their outcomes.
The question on everyone’s mind is: can it be delivered?
But for the new offer to become a reality, it will need to successfully harness and build capacity amongst childcare providers. There is a long distance to travel.
Only half of local authorities are said to be fully confident of having sufficient childcare provision for children aged two currently.
One might imagine that an unprecedented £4 billion injection of public funds would be more than enough to turn things round, but sector bodies are less convinced about the rates that will be offered.
The extension also removes one of childcare providers’ key financial props – the ability to cross-subsidise low Government funded rates through fees charged to parents of babies and toddlers.
The worst case is an underfunded offer that pushes an already fragile childcare market into free-fall.
The Government will be conscious that past predictions of crisis have not come to bear and overall, the national level data from Ofsted does not necessarily suggest that there is one now.
The number of early years settings has declined over the years (largely due to childminders exiting, but also consolidation to larger nurseries), yet places for this age range have remained broadly stable.
How bad is the situation really and what is needed?
Today the Local Government Association publishes fresh analysis by my colleague Natalie and I at isos Partnership, which offers new insights on the nature, drivers and impacts of recent nursery closures and shines a further light on some of the challenges the new extension will need to surmount.
There are at least five key points worth taking note of:
- Although nursery capacity is broadly stable at national level, some areas are being hit hard by significant closures, and some reductions are not showing up in the data.
- A further decline in nursery numbers seems reasonably likely before the extension even starts.
- The impacts on disadvantaged communities should be a particular cause for greater concern. Although a larger number of the 2022 “leavers” from Ofsted’s Early Years Register were in better off areas, the data shows that more new nurseries are opening in those areas too off-setting any obvious differences in reductions in provision by area deprivation level.
- The workforce exodus is not abating – salaries need to become competitive for a sustainable future extended offer.
- A more active approach to market management is needed in order to protect a balance of provision that meets the needs of all families.
All of this sounds very difficult, yet the promised extension lays down the gauntlet for a radically more ambitious offer and has generated political momentum that is hard to turn the clock back on. The policy offers the opportunity – and imperative - to re-draw the system so that it is more sustainable and works better for families.
This is a task for local as well as central government. As local authorities take on responsibility for funnelling the vast majority of childcare spending, they are well placed for this – but will require improved capacity, knowledge and levers to do the job properly.
At isos Partnership we are already starting to work with individual local authorities to support them to develop foresight in this area and plan out exactly how to get the best out of the new offer, including through building a deeper understanding of what parents want, how local providers may respond and the risks they will need to manage.
- Jodie Reed leads on isos Partnership’s work on early years, childcare, early help and prevention. She has extensive experience working with local authorities, large national charities and social enterprises.