Government in danger of missing childcare pledge, PAC warns

16 Jun 16

The government’s pledge to provide 30 hours of free childcare for working families next year may not be met because of lack of capacity in the provider market, the Public Accounts Committee has warned.

In a report looking at the government’s plan to double the amount of free childcare available from next September, MPs said more needed to be done to assure families of access.
They said the Department for Education does not have robust plans to ensure there were sufficient qualified early years staff for providers to continue to offer high quality childcare.

The Entitlement to free early years education and childcare report urged ministers to use pilots of the new entitlement in six councils, set to start in September, “to test providers’ capacity to meet the expected demand … and assess how feasible it is for providers to operate with the new funding rates”.

Currently, the DfE has no mechanism for identifying whether local authorities are managing their childcare markets effectively or it needs to intervene. Funding for free childcare is given to councils on the basis of the number of eligible children of each age group in their area. Local authorities then use their own formulas to allocate this funding to providers, and can retain some funding in order to provide central services.

The amount councils choose to pay providers varies from £2.28 to £7.15 per hour for three and-four year-olds, as does the percentage of funding they retain, from 0% to 34%. These variations persist even when comparing areas that have statistically similar children’s services.

PAC chair Meg Hillier said the government would need to learn quickly from the pilots to ensure funding levels were adequate. Central government should intervene where local authorities had failed to ensure sufficient provision.

“We are particularly concerned that the economic realities of providing childcare will deter providers from offering the extended provision,” she added.

“It would be a grave mistake to extend this policy on shaky foundations and we expect the Department for Education to respond swiftly to the concerns set out in our report.”

The report also highlighted what it called “unacceptable variations” in the amount of information available to parents about access to free childcare.

While progress has been made towards ensuring all three- (94% have a funded place) and four-year-olds (99%) benefit from 15 hours of free early education and childcare, take-up for disadvantaged two-year-olds (58%) has been significantly lower.

Remedial action must be taken to address this, said Hillier.

“This needs to be in tandem with tackling weaknesses in the current system, in particular obstructions to parents taking advantage of the help and services available.”

Responding to the report, a DfE spokesman said there had been huge demand from local areas to take part in the pilot scheme, which will provide expanded childcare a year early.

“So we know childcare providers and local authorities want to help hardworking families too – and take up of our existing offer for families of three and four year olds and disadvantaged families with two year olds has continued to increase,” he added.

“We will continue to work closely with providers as we get ready to deliver this offer across the country in September 2017, backed up by our record investment into the childcare sector.”

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