The Government has more work to do to address “structural problems” in the early years system to ensure families benefit from high-quality affordable childcare under its reforms, MPs have said.
Plans to expand the number of subsidised childcare places for working parents in England “should not come at the expense of quality”, the Commons Education Select Committee has warned.
From September, the Government will change minimum staff-to-child ratios from 1:4 to 1:5 for two-year-olds in England, but it will remain optional.
The group of MPs said it is “deeply concerned” about the plans and it is calling on the Government to reverse the changes “if quality is degraded”.
Chancellor Jeremy Hunt announced reforms in the Budget in March which will allow some families of children as young as nine months in England to claim 30 hours of free childcare a week.
Simply extending the number of hours that the Government calls free will not work unless the funding rates accurately reflect the costs of providing high quality early education and childcare— Committee chairman Robin Walker
From April next year, working parents of two-year-olds will be able to access 15 hours of free childcare. This will be extended to working parents of all children older than nine months from September next year.
From September 2025, working parents of children under five will be entitled to 30 hours of free childcare per week.
The Education Select Committee said it was a “welcome investment” following concerns raised by parents and early years providers during its inquiry about “affordability and sustainability”.
The report added: “However, this investment is much overdue and more will need to be done to address the structural problems in the ECEC (Early Childhood Education Care) system if the funding increases are to be implemented effectively.
“In particular, close attention should be paid to effective funding distribution. Settings in disadvantaged areas already struggle more than those in more affluent areas, yet we know that it is children from disadvantaged families that can benefit the most from high-quality ECEC.”
The Treasury “missed an opportunity” to reform tax-free childcare and increase the flexibility of the system under its plans to expand free childcare for working parents, the report said.
Under the current system, working parents of three and four-year-olds in England are eligible for 30 hours of free childcare per week.
The tax-free childcare scheme also allows eligible working families to claim 20% government support with their childcare costs, up to an annual limit of £2,000 per child.
The Commons Education Select Committee report said the requirement for parents to reconfirm their eligibility every three months for the 30 hours entitlement and tax-free childcare scheme is “unduly onerous” and should be reduced to once per year.
Committee chairman Robin Walker said: “The childcare market is facing significant challenges in affordability and availability, with unprecedented staff turnover and nurseries closing, despite massive demand from parents who want a career and to provide for their families but struggle to find affordable services. It is clear that ministers have more work to do to address this.
“Simply extending the number of hours that the Government calls free will not work unless the funding rates accurately reflect the costs of providing high-quality early education and childcare.
“We have heard that many settings rely on charging more for the children who attend them outside of the funded hours. It is therefore essential that ministers reduce burdens on the sector and provide adequate funding for all the stages of early education.”
He added: “Staff are the lifeblood of this sector and the huge expansion of subsidised childcare will only be successful if we can stem the tide of people leaving the workforce.
“There needs to be a revamp of career development, with improvements to pay, progression and conditions so that the profession is given the respect and status it deserves.”
Not only have years of severe underfunding plagued the sector but the worst staffing crisis in decades has created a perfect storm which must be addressed if the sector has any chance of survival in the coming years— Neil Leitch, Early Years Alliance
The cross-party group of MPs is calling on the Department for Education (DfE) to “work closely” with childcare providers and local authorities across the country “to set the funding rate at a sufficient level.”
It added that the DfE should stop describing the 30 hours offer as ‘free hours’ and instead refer to it as ‘funded’ or ‘subsidised’ hours to “improve parental trust” in the childcare subsidy system.
Neil Leitch, chief executive of the Early Years Alliance (EYA), said: “Not only have years of severe underfunding plagued the sector but the worst staffing crisis in decades has created a perfect storm which must be addressed if the sector has any chance of survival in the coming years.
“If that wasn’t bad enough, it’s likely that the upcoming sector expansion will be dangerously underfunded and will place unrealistic expectations on providers already on the brink.”
He added: “For the committee’s findings to truly have a lasting impact, we hope against hope that it finally wakes the Government up to the reality of the situation facing families and providers and prompts urgent and effective action.”
Last week, the Government said reforms expanding the amount of free childcare for parents will be “properly and fairly funded”.
The DfE said its proposed new funding formula, which is now out for consultation, provides “additional funding for areas of deprivation”.
The increased funding will see the expected average rate paid to local authorities for 2024/25 to be set at £8.17 for two-year-olds and £11.06 for under-twos, the DfE said.
A Government spokesperson said: “We are rolling out the single biggest investment in childcare in England ever, set to save a working parent using 30 hours of childcare up to an average of £6,500 per year and give children the best quality early years education.
“To make sure that we are supporting our fantastic early years workforce, we will be investing hundreds of millions of pounds each year to increase the amounts we pay childcare providers. We also are consulting on how we distribute funding to make sure it is fair.”
