Early Education left in the dark by childcare’s moment in the spotlight

On Wednesday, the Chancellor Jeremy Hunt ushered in the biggest reform to early years education in a decade. Somehow, he did it without mentioning Early Education a single time.  

‘Early Years’? The words escaped his lips…once, at the end, potentially by accident. ‘Children’ at least got a mention 11 times, but teachers, educators, professionals, pedagogues? Nope.

“Childcare”, however, was talked about a whopping 23 times.

And that perfectly illustrates the challenging line that must be walked by all policy affecting children under 5. Is our sector here to get parents back to work, or to educate children during their most important phase of their development? And why on earth can’t we design policy that does both?

What was in the budget? See the breakdown and get a PDF example letter to update parents here.

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Fumbling the funding

It’s clear that the government has firmly staked their flag on the “childcare” side of the debate. It’s a commendable attempt at reform, and the team at the vital Pregnant Then Screwed are right to be celebrating this as a victory for mothers and young parents.

But it will not benefit children, nor those staff being treated as nothing more than overburdened babysitters, if we are not going to fund these things properly. And there is every indication that we won’t.

When the government is now proposing to ‘buy’ approximately 70% of early years hours, they are arguably fixing the prices for those hours. Unfortunately, they have a rich history of fixing these prices wrongly, and there is little indication they will change course this time around.

• The CBI has analysed that this policy would take £8.9 billion to run. We’ve been promised £4.1 billion. 
• The Women’s Budget Group has recommend that the current policy requires a further £1.9 billion to make it financially sustainable for nurseries. The government has promised £204 million.

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Will there even be enough places?

In order to meet the extra demand that this policy will take, we will need hundreds of thousands of extra places for children. But what incentives are there for providers to enter the market or expand their offering when the sums just don’t add up?

The budget itself mentions that this reform will, by September 2024, impact the parents of 640,000 children. Yet, the announcement has come at a time when provision for early years is not rising but falling.

Only half of local authorities are able to meet current demand for early years places for children under two, which has dropped 7% in the last year according to Coram’s latest research. 

At Famly, we see the consequences of underfunding  first-hand. In February, we had more of our customers close down their nurseries for good than ever before. The last time that number hit record highs? January. One month earlier. Every month so far this year has been a record breaker - and not the good kind.

In short, there is still so much we don’t know…

• Will there be a transparent attempt to actually match funding rates with current costs/prices?
  Many providers have to balance their books with full fees from 1 and 2-year-olds because of the shortfall in funding for the current 30 hours for 3 and 4-year-olds. If this is no longer an option, there may be no way back for thousands of providers.
• Why are we only covering working parents? This policy is likely to disproportionately benefit middle and high income families, and make things worse for disadvantaged children.
• Will the £200m-ish for the current plan even touch the sides? It's only just more than 10% of what the government's own figures show the policy needs.
• Is there any sense in this ratio change? What will it meaningfully do? A policy that can only pile more pressure onto overstretched educators seems to be particularly ill-thought out during a staffing crisis. What’s more, providers can’t pass any savings onto parents because they won't be making any.
• A cash incentive to bring professionals into the sector is a great idea. But why only for childminders? And why would people who join through childminder agencies get double?
• What are we going to do to bring more staff into nurseries? Right now, with all the will in the world, we wouldn't be able to staff the nurseries to meet these places. This has to start with the way we respect the profession - and has to end with how we pay them. For that, we need more cash. We covered this in our 2022 report Respect The Sector.

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So is the new budget a good or bad thing for the Early Years? 

For working parents? Probably a good thing. It’s right that we need to take action to resolve the fact that early education in the UK is the third most expensive in the OECD. It’s also right that we try to increase children in early education, because we know that benefits outcomes. But only if the places are there.

For staff? These changes do not address the simple facts. People aren’t joining the sector. Those who already have are increasingly choosing not to stay. The only way to make this better is to increase their respect, and increase their pay, and reduce their workload. These changes are doing the opposite.

For the sector itself? I’ll leave those in the thick of it to say (see our sector comment below). But I cannot fathom how expanding an offer, while continuing to underfund the current offer to the tune of £1.7 billion, is going to make things easier for struggling providers.

And of course, the children. Policy this massive that doesn’t even try to support all children is a bad move. When we continue to only define the policy parameters by how many children we can hem into a setting, children will not receive the quality education that we know can pave their way to a better future.

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Reaction: What do those in the sector say:

We spoke with a handful of the experts on the ground - the people who run and support settings across England. Here’s what they had to say.

Ian Morgan, Director, Little Ducklings Day Nursery

"The new childcare support package for parents announced in the budget is a fantastic package for parents, and it will allow many more of them to access Early Childhood Education and Care much earlier than 3 and 4 by making childcare more affordable for parents. 

However, it is also the biggest threat to the sustainability of our sector since the introduction of the *FREE* hours and so it needs to be funded correctly. At present, there is plenty of confusion. Is the £204M extra cash quoted for September 2023 targeted at 2 year old funding or the existing funding scheme? The scheme also means that potentially 70% of my income will now come from the Government, leaving me exposed to their “price control” and the whims of Local Authorities. 

I’m sitting on the fence at the moment, but clearly, more work needs to be done between now and April 2024."

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Michele Barrett, Headteacher, Vanessa Nursery School and Randolph Beresford Early Years Centre

"Although the announcements that more funding is being provided for future childcare are a move in the right direction, I see no attempt to tackle the shortfall and challenges the sector currently faces. 

As seen recently in Nursery World - funding rates have not been spoken about in a climate where the ongoing closure of nurseries is becoming more familiar and those that remain open are increasing fees in an attempt to keep up with inflation. Funding has been so low for so long that sustainability is a problem for every provider, be that PVI, Maintained Nursery Schools and childminders. It seems the only reason Early education and childcare has been highlighted in this budget is as part of a bigger, more important priority for government - getting people back to work. The main thing consistently missing from these government priorities is the lack of a strategy that puts the needs of children at it’s heart. Not because it is a by-product of something government sees as more important but because children are important, they have rights to good quality early education and childcare.

Offering more funded hours for all working parents again misses the point of early education and places a focus squarely on childcare to get parents back into work. No thought has been given to the most vulnerable children even though the government is currently spending millions of pounds on Covid recovery and stronger hub programmes in an attempt to ‘bridge the gap’ for those children it has been clearly researched need quality early education the most. If research is telling us that children on free school meals are 4.6 months behind their peers at the end of the foundation stage, and that this ‘gap’ doubles again and again as these children move through primary and secondary education, how is funding highly paid parents who can afford childcare ever going to level the playing field for all children? 

What the government needs to focus on is putting an early education strategy in place that separates the need for childcare for working parents and the rights of high quality education for all children but particularly for our most vulnerable. This is what changes the future of our economy - not creating an even wider separation between those that have and those that do not."

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Ruth Pimentel, CEO, Kindred Nurseries

"It’s good to see childcare taking centre stage in the budget - that in itself shows just how important this issue is for families and for providers. Whilst the support for families is welcomed we will need to see how this plays out before we know if we will get the necessary financial support from the extension of the funded entitlement."

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Matt Leedham, Director, Nursery Rhymes Nursery Leicester 

"It is so frustrating as a Nursery Owner to see the Yellow Ticker scrolling across the news channels with just 3 words, that are all lies!  "30hrs Free Childcare"!

This is exactly what the parents expect, because it is sold to them as a vote catcher by the government. We have to spend hours explaining both in person and over admin that it is not free and it is only 11 or 22 hours over a full year.

It could all be resolved quite simply by removing the word ‘free’! Or if they insist on using the word ‘Free’ they need to match our true rate that is needed to deliver top quality education and care.

If the money was simply paid into the parents TFC account as a subsidy they could choose at which Nursery to use the funding as a discount against that nursery's rates."

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Angelica Celinska, Lecturer, Speaker and Founder of The Voice of Early Childhood

"The new childcare reforms announced in 2023’s Budget are of course great news for families, however this is not the case for early childhood providers. Firstly there are too many unattended considerations in regards to the delivery of the funding – will the hourly funding rates be changed in accordance? What will this look like? Are settings going to receive funding for balancing out staff pay? Will they see monetary support in terms of recruitment and training?

In addition to all of this, the ratios announcement poses some concerning questions for quality of provision – does the Government see the priority as being saving money or quality education for our youngest children? I think the answer is clear here. 

Although the voices within the early childhood sector have not been taken seriously when it comes to ratios, we as a sector must still stand our ground and advocate at a time when the spotlight is placed on our youngest children. This is the time for the voice of early childhood to be heard."

Alison Featherbe, Early Years Consultant

"Early Years providers are as unique as the children, families, and communities that they serve. Changes in government policy can be unsettling, so take the time to absorb the information, listen to perspectives, and carefully consider the amendments to the EYFS (from September 2023) and funding arrangements before making changes to your own policies and business plan. Make informed decisions with your overall vision and commitment to the care and education of young children in mind. Our sector must remain focused on high-quality provision, where all children feel safe and happy to learn."