Outcomes of free childcare programme “unknown”, says NAO

2 Mar 16

The Department for Education is unable to track the effectiveness of £2.7bn being spent on a flagship free childcare programme, according to a report by the National Audit Office.

The spending watchdog said significant progress had been made in providing 15 hours of free childcare since the commitment was made under the previous coalition government. The entitlement was introduced in September 2010 for parents of 3- and 4-year olds, and then extended to disadvantaged 2-year-olds in 2013.

Overall, £2.7bn was allocated for free childcare in 2015/16, from which 1.5 million children received a place at 105,000 providers including playgroups and pre-schools, nursery schools, children’s centres and childminders.

The NAO found that most parents of three- and four-year olds use free childcare places for their children, and the quality of provision, as measured by Ofsted, has increased in recent years. There had also been an improvement in the number of children judged to reach a good level of development at age five, which increased from 52% in 2013 to 66% in 2015.

However, auditors concluded that the DfE is unable to link the quality of provision to these improvements, which meant the programme was unable to demonstrate full value for money.

In addition, the existing measures of development is to be discontinued by the DfE next year, when the government will double free childcare for working families with three- and four-year-olds to 30 hours.

Ahead of a pilot of the extension in six local authorities, the NAO warned the knowledge gap would become a greater risk to value for money as provision expands.

There is also a risk that providers may decide not to offer the new entitlement unless the rate of funding is right, auditor general Amyas Morse warned.

“Many parents and children are benefiting from the entitlement to free childcare, but the department does not yet know what long-term outcomes it is getting for its investment of nearly £3bn a year,” he said.

“In rolling out the new entitlement the department should use and evaluate its pilots to make sure that certain groups do not inadvertently lose out. It is particularly important that the number of disadvantaged two-year-olds accessing free childcare continues to rise, in line with the department’s own aspirations.”

Responding to the report, education and childcare minister Sam Gyimah said: "As this report shows, more parents than ever are accessing high-quality free childcare, backed by record levels of investment – including an additional £1bn a year by the end of the parliament.

"The latest figures show our plan is working, with nearly all three and four year olds receiving 15 hours free childcare a week as well as over 70% of disadvantaged two year olds, according to a recent survey of councils – and more than ever are reaching a good level of development. Thanks to our plan support more working parents by doubling the free hours the government provides we expect this trend to continue.”

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