Government starts to roll out childcare expansion, as sector highlights ongoing 'challenges'

With childcare likely to be a key manifesto battleground in the run-up to a general election this year, Labour released what it called its ‘dossier of childcare chaos’ to coincide with the start of the Government’s expansion and said the plans announced in the 2023 budget were threatening ‘to crash the childcare system’.

While Labour has yet to announce its policy on funded childcare, it has commissioned former Ofsted Inspector Sir David Bell to lead a review on early education.

As of Monday 1 April, eligible working parents are entitled to access 15 hours of funded childcare for the term following a child’s second birthday.

From September, the offer will be expanded further to 15 hours of childcare for working parents of children from the age of nine months, and by September 2025 the Government has said the rollout will be completed with working parents able to access 30 hours from the end of maternity leave to when their child starts school,

Education secretary Gillian Keegan said, 'This is a landmark moment, and I am extremely proud to see we’re on track for more than 150,000 children to take up government-funded places under our new offer.

'This will be a lifeline for working parents, building up to this government’s plan for the most comprehensive childcare support in this country’s history by 2025.'

The number of parents of two-year-olds that have registered to take up the expanded childcare offer in advance of the scheme is not yet known. 

However, the Government said that the number of parents taking up places is expected to continue to grow by ‘tens of thousands’ over the coming weeks and it expects to provide a formal update on take-up in the middle of April.

Applications for the first stage of the rollout from April are now closed, but parents who have already registered can continue to take up places from April.

Meanwhile, many large nursery groups are supporting the Government’s expanded childcare expansion plans.

Jo Turley, managing director, Ashbourne Day Nurseries, which operates 41 nurseries, said, ‘At Ashbourne Day Nurseries, we welcome the extension of government funding in early years childcare and education as a positive step forward. Quality early years education is foundational in shaping a child's future, and we eagerly anticipate any benefits this extended funding will bring to families across our nurseries and the broader community.’   

Busy Bees, the largest nursery group in the UK, said it had seen a large increase in interest from parents.

Chris McCandless, CEO, Busy Bees Europe, said, ‘We’re really pleased that the rollout has been accompanied by the clarity on future funding rates we needed to invest in creating the additional capacity required in our centres. 

‘We’ve already seen a significant increase in interest in our nursery places in recent months from parents looking to make use of the funded hours, and expect to welcome more children to our nurseries this year and in subsequent years as the scheme expands further.’

'Challenging circumstances' for nurseries

Sector organisations continue to highlight the challenges for nurseries in expanding the places for parents.

Purnima Tanuku, chief executive of the National Day Nurseries Association (NDNA) said, ‘We know that providers have been working extremely hard to be ready for today’s roll-out but they face extremely challenging circumstances including last-minute funding decisions, workforce shortages and getting access to capital support to expand.’

The Early Years Alliance has warned that both this and future phases of the early entitlement expansion will be unworkable if the Government does not commit to realistically funding the expansion in the long term, and addressing the fundamental challenges facing the early years sector. 

CEO Neil Leitch said, 'If there is one thing that the first phase of the entitlement expansion has shown, it’s that simply promising "more free childcare" is meaningless if you’re not willing to invest in the infrastructure needed to deliver it.

'As our own research shows, nurseries, childminders and pre-schools are already facing severe capacity challenges, with 68 per cent of settings full before the expansion has even begun – and as a result, many have had no choice but to limit the number of new funded places they offer. It’s completely unsurprising, therefore, that many parents accessing a place for the first time have found it difficult - if not impossible - to do so.'

Labour said that the Conservatives could not guarantee that everyone offered new childcare entitlements will be able to receive their funded hours.

It said its research shows that according to Ofsted data the number of childcare places fell by more than 1,000 in the six months between March and December 2023 alongside a fall in the number of providers. 

Shadow education secretary Bridget Phillipson called on the Chancellor of the Exchequer to guarantee that eligible parents would not lose out on places and that nurseries would not be forced out of business.

Labour's dossier included comments from nurseries, with many from smaller providers concerned about the rollout of the scheme.

Gerry Garvey, owner of Muddy Boots Nursery, Cumbria, said, 'The offer of funded places for two-year-old children in principle is a really good idea, however the idea has not been fully costed or thought through and has not taken in account the views of the sector or the recommendations that they have provided.

‘The current rollout in April will see a lot of disappointed parents unable to claim as there are a lack of nursery places, due to systemic underfunding and lack of staff to provide the places.

‘Thought would also need to [be] given in how initiatives are introduced to keep staff in the sector, which would enable settings to provide more places, the current offer of getting staff into the sector is unrealistic and an insult to existing practitioners.’

Lydia Wright of Little Pearls Nursery in Exeter said, ‘As a reputable nursery, we are already having significant capacity issues; most recently not being able to accommodate younger siblings of current children in the nursery due to the increase in enquiries and bookings. With no space to expand we are unfortunately now beginning to turn families away, let alone increase hours for families already with us.’

A recent survey by NDNA found that almost half of providers said they didn’t believe they would be able to offer extra places.

Tanuku said that parents may find that there aren’t places in their first choice areas and that parental choice was crucial when it comes to the care and well-being of children.

She added, ‘Looking ahead we hope the Government will continue to work with providers and the sector on initiatives to improve recruitment and retention, address funding shortfalls for three and four-year-old places and support providers with challenges like capital funding and business rates burdens. This is just the first stage of an ambitious plan but we need a thriving and healthy sector to be able to provide the high-quality and accessible childcare places we want to see, that truly give our children the best possible start in life.’

The Alliance said that a combination of sustained underfunding and minimum wage rises had forced many providers to increase fees at a higher rate than normal, meaning that even those parents who have been able to access places are likely to see sharp increases in the cost of any paid-for hours.

Leitch added, 'With just five months to go until the next phase of the expansion, which is likely to result in an even greater increase in the demand for new places, it’s clear that urgent action is needed from government.

'For there to be any chance of this policy being rolled out successfully over the long term, ministers simply must tackle the fundamental problems facing the sector: that means adequate funding – so that settings can both keep prices low and offer the kind of wages that ensures that they can attract and keep quality staff – and a clear workforce strategy that focuses on retention as well as recruitment.

'Ministers have made a big promise to parents. Only by providing the support that the sector needs will they be able to keep it.'

What would Labour do?

Labour has been under pressure to say whether it would keep the current Government's childcare expansion plans.

In a letter to Phillipson and the shadow chancellor, Rachel Reeves, Keegan said, 'Parents have told me that they are now uncertain whether they should go back to work, grow their families, or take a promotion, because they don’t know if they will still have this childcare provision.

'Will the Labour party commit to supporting our policy of giving working parents 30 hours free childcare a week from when their child is nine months old to when they start school? If not, how would you make up for the 60,000 fewer people in work that our policy will support?'

The shadow minister Nick Thomas-Symonds told Times Radio on Monday morning, 'The entitlement that parents have been promised, we will not reduce if we are privileged to form the next Labour government.

'The point that Bridget Phillipson was making, and this is why we are making this point to the government today, is just because you introduce an entitlement doesn’t guarantee that the places are available.

'That is what we are urging the chancellor of the exchequer who announced this scheme last year to do today, actually make the entitlement a reality.'