Report highlights risks of childcare roll-out

The quality of childcare and provision for some vulnerable children may suffer as a result of the rapid roll-out of extensions to free childcare, according to a National Audit Office report.

Child playing with toys whilst in chilcare


The Government’s ambitious timetable on rolling out extensions to free childcare could result in lower quality childcare and less childcare for vulnerable children, according to a new National Audit Office report.

It says the plans – the gradual two-year roll-out of 30 hours a week [during term time] of ‘free’ childcare to children from nine months – are challenging, given they were set amid significant uncertainty around feasibility, costs and benefits and consultation with the sector was hampered by the restrictions that apply when developing budget proposals. Moreover, the Department for Education then cancelled early testing plans, exacerbating the significant uncertainty about the sector’s capacity and financial sustainability. It is calling for careful monitoring of progress.

The report says the Government is on track to meet its April 2024 milestone of 15 hours free childcare for two year olds. As of 17th April, parents had been issued codes to claim their funded places for 246,833 children. Providers have validated 195,355 (79%) of these codes, but this is expected this to rise further and stabilise at around 85% – although the report notes that the timescale for when this will happen is uncertain.

It points out that it is estimated that 7,000 additional places are needed to satisfy demand in April 2024 and approximately 85,000 new places overall are required by September 2025. The Department for Education [DfE] acknowledges meeting future milestones will be ‘problematic’ given uncertainties regarding the sector’s capacity and staffing.

Its survey of local authorities in March 2024 found one third (34%) were confident in meeting the September 2024 milestone of 15,500 additional places, reducing to 9% for the September 2025 milestone of a further 69,300 places.

The two-year scheme was announced as part of the March 2023 Budget. The report says usual restrictions for budget announcements meant the Department could not consult the early years sector beforehand, and it set timelines without knowing local authorities’ or providers’ capacity and capability to deliver.

The report says the DfE originally planned to implement the changes early in some local authorities, to test feasibility and establish evaluation baselines, but cancelled this due to affordability constraints.

It considered the trade-offs with delivering the programme quickly and accepted the risk that providers may not have enough staff. It worked with HM Treasury to mitigate risk by increasing hourly funding rates for local authorities; by an average of 4.7% for 3–4-year-olds, and from £6.00 to £8.28 per hour for two-year olds.

DfE also changed regulatory requirements, including reducing the staff to child ratio for two-year-olds to 1:5, to help providers flex their staffing models.

Nevertheless, insufficient staffing continues to represent the main barrier to expansion, prompting a national recruitment drive.

The report says the DfE estimates that by September 2025, the early years workforce would need to expand by around 40,000 full-time equivalent staff. This represents a 12% increase on existing staff numbers in just over two years, which the report says is ambitious given the workforce only increased by 5% between 2018 and 2023.

The NAO report highlights the risks of unintended consequences with large numbers of new or less qualified staff entering the workforce, including jeopardising the quality of provision; reducing the number of places available for vulnerable children; and widening the attainment gap between children from more affluent families compared with disadvantaged peers.

The NAO recommends DfE commits to continuing to monitor the implementation of the new entitlements, so the expansion does not negatively impact or displace those children who may be more challenging or costly to support.

Other recommendations include measuring the impact that interventions, including revised funding rates, have on staff and early years places, to understand how the programme may need to change to achieve the next two milestones and its longer-term outcomes.

The TUC says the report shows that parents are being let down by the Government. TUC President Paul Nowak said: “Ministers should have addressed the staff recruitment and retention issues in childcare well in advance of this rollout. Caring is skilled work and the – predominantly female – workforce deserves decent pay and conditions.  

“The Tories have broken their promise to parents and let down working people – yet again.”

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