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One year on from the introduction of the 30 hours and we are starting to identify its winners and losers. While many parents of three- and four-year-olds have saved money with these extra hours of ‘free’ childcare, it is now well-documented that they tend to be relatively affluent.
So what is happening to the less well-off parents? And what impact is the scheme having on childcare services?
Finding 1
Disadvantaged families are not supported to benefit from the scheme
There is convincing evidence that high-quality early years provision can have a positive impact on children, especially those from disadvantaged backgrounds. Yet the statistics show these children are less likely to benefit than their better-off peers.
The 30 hours is not helping to reverse this trend. In 2018, two- thirds of three- and four-year-olds who were accessing the universal 15 hours were not taking up the extended 15 hours. Children with additional needs, from low-income families and ethnic minorities were all less likely to access the scheme. These are all families who may face considerable barriers to entering work (and getting more families into work was a key aim of the 30 hours scheme). Yet local authority childcare teams reported lack of resources to support disadvantaged families to take up the offer.
For example, some local SEND budgets could not be stretched to cover the extra 15 hours. There was no financial support (unlike in the 30 hours pilots) to complement the new additional childcare funding with a view to helping non-working parents to overcome complex barriers to work, such as poor skills, limited experience and low confidence.
Two other policy features made it harder for some disadvantaged families to access the scheme. First, parents are entitled to extended hours the term after they secure a job, and low-income families were not in a position to enter employment and pay for additional childcare for several weeks before they could access the extended offer. The challenge of retrospective payments was also criticised as a “fundamental flaw” in the 2018 Treasury Committee report on childcare. Second, the complexities of the registration process could represent insurmountable barriers for parents whose first language was not English or who had low IT skills.
Finding 2
It mainly helps parents who already have a job
The evaluation found that only 2 per cent of mothers and less than 1 per cent of fathers entered work after accessing extended hours. More parents already in work reported changes to their employment circumstances, with 27 per cent of mothers and 18 per cent of fathers saying they were working longer hours because of the extended offer.
While families who face barriers to work were less likely to access the scheme, if they did, they were more likely to increase their working hours. Single mothers, large families, parents with lower qualifications, ethnic minority parents, and middle- to low-income families, were more likely than other parents to say that extended hours had enabled them to work more.
Finding 3
Higher earners benefit the most
The policy aims to reduce families’ childcare costs, but the evaluation shows that this may not be happening in an equitable way. More affluent parents were more likely than others to report financial benefits from the scheme, as typically these families spend more on childcare.
Furthermore, while the Government estimates that the scheme can save an eligible family up to £5,000, the range of additional charges and conditions that some settings attach to the extended offer meant that what parents saved could vary considerably depending on where they lived and which provider they used.
Finding 4
Most providers offer it, but low funding rates could mean more opt out
Policy-makers expected the scheme to generate more parental demand and result in more supply suitable for working families. However, in the run-up to the national roll-out, sector representatives predicted that many providers would not offer the extended entitlement.
In reality, three-quarters of providers were delivering extended hours in 2018, and only 4 per cent opted out of the scheme because they thought the funding rate was too low. We heard that many providers offered extended places because they were concerned that otherwise parents would go elsewhere, and believed that the financial consequences of not engaging with the scheme would be worse than a low funding rate.
For many settings, the funding rate was lower than their fees, which meant a reduction in revenue at a time when their costs had been steadily increasing. Some providers were not sure if it will be financially viable to continue, and in future they may decide to opt out of the scheme or substantially reduce the number of extended places they offer.
Finding 5:
The policy is encouraging providers to be more flexible
Most extended places (61 per cent) were delivered by private day nurseries. However, there was also high engagement of voluntary playgroups and schools, which became more flexible to accommodate the scheme, with a third extending their opening hours. Furthermore, 75 per cent of childminders were delivering the extended entitlement, which is in contrast with their very low engagement with the 15 hours universal offer.
Finding 6:
There are early signs that the policy may reduce quality
As noted by the Education Select Committee’s 2019 Tackling disadvantage in the early yearsreport, ‘Not all pre-schools have an equal impact on children’s life chances – quality is key.’
Policy-makers did not seem to expect the 30 hours to affect the quality of provision. The funding is only available for Ofsted-registered services delivering the Early Years Foundation Stage, and this is seen as ensuring that acceptable quality standards are maintained. But could a major policy development like this really fail to have any effect on quality, particularly given that the funding rate is widely regarded as inadequate by the sector?
While the evaluation was carried out too early to do a robust quality assessment, we asked providers for their views on this key issue. Some settings said that although they had to restructure their provision to accommodate extended hours, they had been able to preserve their quality standards. However, other settings were seriously concerned that the quality of their provision would decline.
Settings were going out of their way to make sure ratios weren’t affected by reduced income, but cuts were being made elsewhere – to equipment and training, for example. Some settings were also struggling to get the calibre of staff they were previously able to recruit and concluded they would have to settle for less-well-qualified and experienced staff. Other settings chose to recruit an apprentice instead of a fully-qualified member of staff. Some were reducing places for children who needed additional support and spending less on educational resources.
Local government cuts created additional problems, as local authorities were increasingly likely to charge for training or charge higher fees. Councils had also reduced support for quality improvement, and in some areas this was only available to settings with a ‘requires improvement’ Ofsted rating.
Conclusion
The evaluation shows that the policy is more likely to benefit better-off families and more advantaged children. While the scheme has helped some disadvantaged parents who already had a job to increase their working hours, helping the transition into work among parents who have traditionally faced barriers to employment is the key challenge. Moreover, if entitlement remains based on parental employment, the scheme will continue to exclude some of the most disadvantaged children and could – as an unintended consequence – contribute to widening the gap between these children and their more advantaged peers.
In the first year there was high provider engagement and enough extended places to meet parental demand. The scheme has supported greater flexibility among settings that in the past were unable or unwilling to be more responsive to working parents’ needs, and this trend may continue as more parents access the new entitlement. However, the evaluation also corroborates the widely reported financial challenges services faced, which could reduce the level of settings’ engagement with the scheme, undermine their financial sustainability and the quality of their provision.
- To access the report, visit https://bit.ly/2GSNqkf
