Childcare in the general election

Childcare is big in the elections, with the main parties competing to support working parents. But the problems facing the sector are deep-seated and systemic.

Three small children sitting on a mat in a nursery with a young woman and they are playing with toys


Childcare is set to be a key issue during the election, with Labour unveiling thousands of extra nursery places at schools in addition to its already publicised plans to extend breakfast clubs to all primary schools and the Lib Dems saying they will review the rates paid to providers for free hours to ensure they cover the actual costs of delivering high-quality childcare and early years education. The Conservatives will be continuing with their two-year roll-out of extended free childcare to children from nine months old.

In all cases, staffing of early years remains a big barrier to plans for expansion and the Lib Dems say they will develop a career strategy for nursery staff, including a training programme with the majority of those working with children aged two to four to have a relevant Early Years qualification or be working towards one. Labour has already stated that it wants to see the status of early years workers boosted and bringing more early years into schools makes it easier to put workers on an equal footing with teaching staff. The Government has promised a big recruitment drive.

But it’s not just that there are not enough places, that funding rates are insufficient or that there is a staffing crisis, which the Covid experience has not helped, in particular the differential treatment of early years staff compared with schools staff. The problems go much further down the chain. For instance, a report for the National Day Nurseries Association today shows record levels of underspends on early years by English councils. It says that at least £70m of early years entitlement funding was underspent in council budgets and not spent on places during the financial year 2022-23. Only a very small proportion, 12% of councils, said they later passed any of their leftover budget to providers to help with underfunding. The rest of the money was either put into reserves or used to offset other deficits within the Designated Schools Grant (DSG).

In total, 104 local authorities reported an underspend out of the 137 who responded to NDNA’s Freedom of Information (FOI) request, amounting to 76% of councils. Almost a quarter of these reported underspends of more than £1m each. Of the remaining respondents, 22 councils reported overspends amounting to £7.4m. This figure was much lower than 2021-22, at £23.1m. Where councils overspend, they must recover funding from future years, meaning funding rates to providers can be lower.

Basically, councils are using the early years money to plug other gaps in their budgets. We know that local authorities in England face some pretty bleak figures due to years of austerity cutbacks, with one in five projecting they will be insolvent in the next year.

Amid mounting concerns about nursery closures at a time when the Government is expanding ‘free’ provision, the NDNA says the funding system for early years needs a complete overhaul and is too complex for parents, providers and local authorities. It wants to see the money for early years ringfenced and all early education and care funding for families brought into a single account which parents can use with their provider of choice.

What is clear is that you can’t just fix the system in one area without it having a knock-on impact in another. Another thing that is clear is that early years should not be seen as a poor cousin of schools despite children who arrive at primary school without some of the skills early years teaches often continuing to be behind throughout their schooling. There are a lot of concerns about putting very young children in school settings, but there is a strong argument to bring early years and schools education closer together in terms of status and importance. It depends very much on how this is done and what the motivation is. If it is saving money, then we should all worry, but if implemented with proper safeguards and oversight there could be wider advantages than simply increasing places.

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