Free childcare expansion 'feasible', DfE says amid concern over provision of places

But a potential shortfall of childcare places is a risk to the reforms, according to perm sec Susan Acland-Hood
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The government’s early years and childcare-reform programme is feasible, the Department for Education has said, amid concerns that a shortfall of childcare places could scupper the reforms.

As of this week, working parents of one and two-year-olds are entitled to an extra 15 hours’ free childcare a week, under reforms announced by the chancellor, Jeremy Hunt, in the 2023 Spring Budget. A further extension will come in September.

According to Hunt, this week’s update should lead to 60,000 more parents entering the workforce. However, the plans have been met with scepticism in some quarters over whether nurseries will be able to provide enough places to meet the existing demand.

Research commissioned by Labour this week found that the number of childcare places in England had fallen by nearly 40,000 since the Conservative Party came to power in 2020. Places fell by 1,000 between March – when Hunt announced the reform – and December last year.

Last spring, education minister Claire Courtinho acknowledged that meeting demand for the scheme would be a "challenge".

But in an accounting-officer assessment published this week, DfE permanent secretary Susan Acland-Hood said the programme passed each of the Treasury’s four critical tests – regularity, propriety, value for money and feasibility – for managing public money.

She acknowledged that a potential shortfall of childcare places is a risk to the reforms if providers do not increase the availability of places swiftly enough to meet parental demand.

There is also a risk that local authorities may not have the capacity to deliver sufficient places, particularly in the later stages of the programme, she said.

“The risk is low in April 2024 but higher for the stage of the programme involving the largest increase in capacity, for September 2025,” she wrote.

She said the department would tackle the risks by setting the hourly funding rate for childcare at a level that will “incentivise providers to offer places and grow to meet the demand”, and that it would “stage the programme carefully to allow for growth in capacity over time”.

Further mitigations include monitoring local-authority readiness closely through “regular engagement and termly self-assessments”; providing extra funding in 2023-24 to help local authorities meet the costs of preparing for the rollout; and making sure a delivery partner is in place to support local authorities.

DfE is also supporting the programme by investing in national recruitment activity and skills provision, she said.

“​The programme will support local authorities to work with their local childcare markets to create sufficient places, increase numbers of childminders as an alternative to nurseries and increase wraparound care for primary school age children,”​ she said.

Assessing the scheme’s value for money, Acland-Hood said there was a “strong rationale for expanding and investing in early-years childcare entitlements”, citing the Office of Budget Responsibility’s estimate that it would lead to 60,000 more parents entering the workforce and 1.5 million increasing their hours.

“Investment in good quality early childcare (supported by the increases in rates) will also both have a positive impact on child development, and support household incomes and living standards,” she wrote.

In a statement accompanying its research this week, a Labour spokesperson said “fourteen years of Conservative failure in early years” had led to higher costs for families and left England’s childcare system as “one of the most expensive in the world”.

“The Conservatives’ childcare pledge without a plan announced at the 2023 budget is threatening to crash the childcare system just like the Conservatives crashed the economy,” they said.

Responding to the comments, education secretary Gillian Keegan said: “On the day that the Conservative government is delivering the biggest ever expansion in childcare provision, Labour still have nothing to offer.

"This is simply a desperate attempt to distract from the fact that they would pull out the rug from tens of thousands of hard-working families, adding an average £6,900 to the costs of childcare.”

In a statement, National Day Nurseries Association chief executive Purnima Tanuku said: “We know that providers have been working extremely hard to be ready for today’s rollout but they face extremely challenging circumstances including last-minute funding decisions, workforce shortages and getting access to capital support to expand.

"In our recent survey, almost half of providers said they didn’t believe they would be able to offer extra places. Parents may find that there aren’t places in their first choice areas and we know parental choice is crucial when it comes to the care and wellbeing of their children.”

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