A report by the National Audit Office, (NAO) criticises the government’s expansion plan as ‘ambitious’ and could negatively impact the quality of provision delivered

The findings are part of a report into the government’s expanded offer of funded childcare for working families of younger children in England.

The independent body found significant challenges with delivery of the plan given the current financial barriers facing the sector. However it also points to the fact that the government never consulted the early years sectors, despite calls for collaboration.

The report stated:

“However, due to HMT’s usual restrictions on information-sharing when developing the budget, DfE could not consult the early years’ sector. HMT and DfE set dates without understanding local authorities’ and providers’ capacity and capability to deliver an unprecedented level of growth in the workforce and new places. DfE estimated that, by September 2025, providers needed to create 85,000 places and recruit around 40,000 staff, although requirements would vary locally.”

NAO report: Staffing

There has been an ongoing recruitment crisis across the sector and part of the expansion plan’s objectives is to retain talent and entice more people back into work.

However the NAO report highlights that the staffing goals the government has are not realistic, if the current recruitment landscape is anything to go by.

“Providers may not have enough staff to support the places needed by 2025 and DfE does not yet know whether its actions will help. In February 2024, DfE estimated that, by September 2025, the early years workforce would need to expand by around 40,000 full-time equivalent staff, 4,000 more than its earlier November 2023 estimate. This represents a 12% increase on staff numbers in just over 2 years, from July 2023, which is ambitious given the workforce only increased by 5% between 2018 and 2023.”

Moving forward

One of the government’s main objectives is to drive more parents into work. The DfE has estimated that, between 2024 and 2025, 57% of the children taking up the new entitlements will already be using childcare.

The NAO report further stated:

“When its Investment Committee approved the business case in September 2023, DfE estimated employment-related benefits of £7.8 billion (40% of total benefits). Its most recent analysis, in March 2024, estimated employment-related benefits of around £5.6 billion (35% of total benefits). DfE based revised benefits relating to mothers entering work or increasing their hours on feedback from its 2017 extension of entitlements.”

That being said, there are doubts over how parents of younger children will respond to the expansion offer.

Purnima Tanuku, chief executive of National Day Nurseries Association (NDNA) said:

“While increased investment in children’s early education and care has the potential to massively improve their outcomes and help families and the economy, this policy was rolled out without consulting councils, providers and parents.

“The phased introduction was important given the numbers of places and staff needed within the sector. However, years of chronic underfunding have held providers back in any plans to expand. The data shows that the majority of funded places this year will be children already in places within settings.

“Providers are working hard to deliver the places that families need and to maintain quality but with high turnover of staff and the need to recruit, we need to see more support from the government to the sector.

“The potential for the policy to negatively impact on children from disadvantaged backgrounds and with additional needs has been a concern from the start. Without the right financial resources and the necessary access to support services alongside funded early education, providers can be left facing the financial costs of supporting children’s individual needs.

“The policy has to have children at its heart to make sure it delivers the best possible outcomes for them. While the policy has the potential to positively impact our economy, as the report highlights, this cannot be done at the expense of quality or other policy aims to improve support for all children.”

Neil Leitch, chief executive of the Early Years Alliance, said:

“The NAO is absolutely right to highlight the significant challenges facing the government as it attempts to roll out the extended entitlement offer.

“With the sector currently facing one of the worst staffing crises in its history, ensuring that there are enough early years places to fulfil the huge promise that ministers have made to parents is likely to be near-impossible without urgent action from government – namely, a comprehensive workforce strategy underpinned by adequate long-term funding for the sector.

“What’s more, we share the NAO’s concerns that the government’s desperate bid to create places will result in the implementation of more and more policies that put the quality of provision at risk, which in turn is likely to have a particular impact on children from more disadvantaged backgrounds and those with additional needs.”

“It is vital, therefore, that the government doesn’t just take what it wants to hear from today’s report, but instead listens and addresses the warning signs laid bare by this report. The road ahead is set to be an incredibly challenging one for the government and providers alike – and it is utterly pointless for ministers to pretend otherwise.”