At the Labour Party's annual conference at the end of September, both the prime minister and the chancellor put early years at the centre of the Government's agenda for a third term. A promise from Gordon Brown on day one to extend paid parental leave to 12 months was followed by Tony Blair's pledge to create 'universal, affordable and flexible childcare for the parents of all three- to 14-year-olds who want it'.
Previous claims that early years was the new frontier of the welfare state appeared to be taking shape. If the reality of government policy is to match the ambition of Labour's rhetoric in this area, what should we expect to see in the ten-year strategy for early years to be published later this year?
Over the past three months, I've been working with colleagues at the Daycare Trust to develop the kind of ambitious vision for early education and care in the UK that we would urge the Government to move towards in its ten-year strategy.
Our 2020 vision addresses the major failing of current policy: the lack of meaningful choice for disadvantaged parents to effectively combine caring for their children and returning to work. This lack of provision undermines the huge potential of early years policy to make an important contribution to this country's chronic record on social inequality.
Choices for parents
Extending meaningful choice to all parents begins with extending paid parental leave from six to 12 months, as the Government has signalled it will. The current system of six months paid and six months unpaid leave gives better-off mothers the choice to remain at home for a full year, while lower income earners are forced to return to work as soon as their paid leave runs out.
This division only serves to reinforce disadvantage by denying children and parents from lower income backgrounds many of the protective health benefits of a year at home. Allowing parents to choose to share leave between mother and father would also promote the positive contribution of fathers to the early development of children.
The Government has come in for considerable criticism in recent months that its policy for under-twos is grooming a generation of aggressive children with behavioural difficulties. There is mixed evidence about the impact of daycare on this age group, although the quality of care consistently emerges as the critical factor. We, therefore, suggest that policy should offer parents the choice between home and work.
The introduction of a benefit similar to Finland's home-care allowance would be one way of promoting parental choice with this age group. All families in Finland with a child under the age of three who is not enrolled in a local authority childcare service are entitled to claim home-care allowance. The average family receives around 247 a month, depending on family income and the number and ages of the children. A similar system in the UK would offer all parents, not only the affluent, an opportunity to remain at home full- time or part-time in combination with paid work.
Free provision
Our vision proposes a significant extension of the current entitlement to 12 and a half hours of free provision a week for three- and four-year-olds for 33 weeks of the year.
First, provision should be extended to 48 weeks a year so that the huge developmental gains that disadvantaged children make in pre-school will not fade during the long holidays.
This phenomenon of fading has been observed among primary school children, particularly in the US, but it is safe to assume that a similar effect occurs in pre-school. For example, a study in Baltimore found that disadvantaged children made the same progress in reading and maths as their better-off peers during term time, but in the holidays they made no progress at all or slipped back, while their peers continued to improve.
Second, free provision should be extended to all two-year-olds, building on current pilots in deprived areas. Evidence from the UK and US indicates that from the age of two onwards, children benefit from every additional month of pre-school, with disadvantaged children benefiting disproportionately.
The influential EPPE study (Effective Provision of Pre-school Education) found that improvements in literacy, numeracy and language development were greater for children who attended three rather than two years of pre-school.
Creating affordable childcare to support working parents is a central plank of the Social Market Foundation and Daycare Trust's long-term vision. This is one area where the choices of disadvantaged parents are particularly constrained, because the childcare tax credit fails to adequately subsidise childcare costs.
At the same time, the tax credit does not offer providers a secure and consistent funding stream, especially in deprived areas where many jobs are temporary and unemployment remains high.
The most effective way of ensuring affordability for parents and sustainability for providers is to replace the childcare tax credit with a grant paid directly to providers. The grant would be payable for any child between one and five and would be supplemented by contributions from parents.
While parents currently contribute 75 per cent of the total costs of childcare, compared with a European Union average of 25 to 30 per cent, this funding system should ensure that by 2020, overall contributions from parents fall to around 30 per cent of total costs, with individual contributions related to family income.
Qualified workforce
Without improvements in the qualifications of the early years workforce, the other changes outlined in this 2020 vision will not deliver the positive child development outcomes that are critical in tackling social inequality.
Positive outcomes depend on quality provision, and a highly qualified workforce has been found to be the single biggest determinant of quality. By 2020, the UK should aim to have 60 per cent of its early years workforce (compared with 20 per cent today) qualified to graduate level and paid in line with teachers. The remaining 40 per cent should have at least an NVQ level 3.
The most recent workforce survey highlights the scale of the challenge. The proportion of paid staff holding NVQ level 3 actually fell from 60 per cent in 2001 to 51 per cent in 2003.
The Government has opted to drive its improvement strategy through financial incentives. Grant funding is partly linked to aspects of quality, including staff qualifications, creating a strong incentive to recruit well-qualified staff and train up existing staff.
Costs and benefits
Evaluating the costs and benefits of this vision, economists at PricewaterhouseCoopers (PwC) have estimated that, while an ambitious vision for early education and care would mean significant extra spending for the Government, this could be balanced out by economic and social benefits.
PwC estimates that the vision outlined here would cost around an extra 21bn per year at 2004/05 values on top of current spending by Government and parents, compared to economic benefits of between 12bn to 24bn at 2004/05 values.
Factor in the social benefits from improved health and reduced drug-taking and and criminal behaviour that are more difficult to quantify, and the benefits begin to outweigh costs.
It is a common misconception that choice cements inequality by reinforcing existing socio-economic disadvantage. In actual fact, it is the lack of meaningful choices for many disadvantaged parents and children that limits their life chances.
Pursuing choice for all means radical changes in the early years system as it currently operates - for example, replacing the childcare tax credit with a grant paid to providers, and overhauling the early years workforce. But these are changes that could deliver significant benefits to many of the most disadvantaged families and, ultimately, to the country as a whole. The case for Government to be bold in its ten-year strategy for early years is strong. It should take the opportunity to match rhetoric with reality.
