In his Budget, the Chancellor confirmed that Government spending on childcare will have reached £6bn per year by the end of this parliament.
This represents a significant increase since 1997-98 when, according to recent research published by the Institute for Fiscal Studies (IFS), spending on early years stood at just under £1bn (in 2016-17 prices). But this masks some of the consequences that have emerged as a result of successive governments’ policies.
The IFS finds that spending per three- and four-year-old (for the free entitlement) almost trebled in real terms between 1998/99 and 2008/09, but then fell by 17 per cent between 2008/09 and 2015/16. This seems to have been caused by an increase in the number of three- and four-year-olds over that period, which was not matched by increases to the total funding pot. In 2015/16, spending per three- and four-year-old was around £1,720 – very similar to the levels last seen in 2003/04.
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