Dame Meg Hillier, the chair of the Public Accounts Committee, has written to the permanent secretary of the Department for Education with conclusions and recommendations of the MPs' inquiry into the DfE's childcare entitlement expansion.
The letter to Susan Acland-Hood has been published instead of a full report ahead of the dissolution of Parliament on 30 May before the general election.
As of 7 May, the parents of 247,500 two-year-olds had registered for the scheme with 211,000 children with a place.
But ‘this early phase did not involve creating significant numbers of new places’, the committee note.
It says that 40,000 extra staff and 84,500 more places are needed by 2025 to meet childcare entitlements in England.
On 12 May, applications for the second phase of the expanded offer – 15 hours for eligible working parents of children from the age of nine months old – opened, ahead of being able to access places from September.
By September, the DfE estimates that early years providers will need to create 15,500 more new places.
This rises ‘sharply’ to 84,500 by September 2025 – when working parents will be entitled to 30 hours of childcare – with a fifth of local authorities needing to increase the supply of funded hours by 20 per cent or more.
‘This is a significant challenge for the early years sector that faces years of underfunding, ongoing cost pressures and a recruitment and retention crisis,’ the MPs’ the committee warns.
It therefore recommends that 'the Department should urgently develop a series of interim milestones to provide assurance to Parliament that the expansion is on track, and set out its contingency plans should available data indicate growth in places and the workforce are below what is required.'
Funding
The Department is now the 'largest funder' of early years provision and 'funding rates are now increasingly important to providers’ financial decisions and longer-term sustainability,' the committee says.
The committee recommends the DfE build a clear understanding of how providers have used the extra funding and whether the funding incentivises the market to expand.
It says, 'The Department recognises the importance of getting funding rates right and sees these rates as its most important contributor to future sector growth. It claims to be confident that it has set funding rates at the right level. However, the Department does not yet know how the new rates are impacting on provider spending or business decisions. It remains to be seen if the increases will provide sufficient incentive to expand or whether providers will use the opportunity to fill previous funding shortfalls, raise salaries or cover rising costs.'
Workforce
It also highlights ‘significant risks’ over whether the DfE will be able to support the expansion of the workforce by the required 40,000 more staff between now and September 2025 (a 12 per cent increase against July 2023).
While the DfE has introduced measures aimed at increasing recruitment ‘it does not yet know what works in terms of increasing staff numbers and acknowledges that it will not know until close to each milestone if there are enough staff to meet the expected demand for places. This piecemeal approach is unlikely to address long-standing concerns around the status and low pay of the early years sector.’
The MPs recommend that the Department ‘should develop and publish a long-term workforce strategy and delivery plan to address recruitment challenges and, working with stakeholders, the root causes of poor retention.’
Is the childcare expansion leading to more parents returning to work or increasing their working hours?
While the programme’s main objective is to support more parents into work, the DfE does not yet know if parents are accessing the hours they need to enable them to return to work or increase their hours in work.
This relies on parents being able to access hours ‘at a time and place that suits them’ but access varies ‘significantly by area’.
The Department says that no local authorities have reported issues with meeting demand to date, but it cannot guarantee that every parent got a place with the hours and the provider they needed, the committee says.
Neil Leitch, chief executive of the Early Years Alliance, said, ‘The Public Accounts Committee is absolutely right to warn of the serious risks of the planned early entitlement extension.
‘We're told that an additional 40,000 staff are required to deliver the additional places needed for younger children, and yet, the sector is already in the midst of one of the worse staffing crises in its history – so where exactly are these extra educators expected to come from?
‘As the Committee rightly highlights, attempts to increase capacity in the sector by reducing qualifications requirements and relaxing ratios are likely to put the quality of early years provision at risk, something that we know would have a particularly detrimental impact on the children who need the most support, such as those from low-income backgrounds and those with additional needs.’
‘It's clear, therefore, that whoever is in power after the next election must ensure that a comprehensive workforce strategy is absolutely central to their plans for the early years. Without this, it's hard to see how the planned expansion can have any hope of succeeding in the long term.’
NDNA’s director of policy and communications, Jonathan Broadbery also said it was ‘vital’ that there was a clear workforce strategy.
Referring to the committee's recommendations regarding funding for the sector he said, ‘we need to see funding decisions that ensure providers are sustainable. This is the only way to ensure they can offer the high-quality, affordable places that make a difference to children and families.
‘The expansion of early years has to benefit all children regardless of where they live or their backgrounds. Too often providers tell us that they cannot access enough support to meet the needs of children with SEND and we know that settings are more likely to close in areas of deprivation. Addressing historic underfunding is crucial to opening up access to early education and care places.’
- The Public Account's Committee's conclusions and recommendations following its inquiry into preparations to extend childcare entitlements for working parents in England is available here
