England childcare scheme may struggle to deliver places, finds ‘damning’ report

The deployment of the government’s childcare scheme to tens of thousands more families is facing “significant uncertainties” and may struggle to meet its own targets, according to a report by Whitehall’s spending watchdog.

The National Audit Office revealed the Department for Education (DfE) had assessed the likelihood of being able to deliver the funded childcare places it promised for September 2024 and 2025 as “amber/red problematic”.

Even if the government managed to successfully navigate the multiple difficulties ahead, it was not clear whether the policy would achieve its primary aim of getting more parents back into the labour force, the watchdog said.

The NAO report, described as “utterly damning” by the early years sector, paints a picture of a department working at speed to meet ambitious targets without vital input from the sector or pilot studies that would have helped with planning.

The DfE already provides some funding for three- and four-year-olds, alongside disadvantaged two-year-olds, but in March 2023 the chancellor announced what was described as the “largest ever expansion of childcare that England has ever seen”.

At the start of April the scheme was extended to include 15 hours a week for two-year-olds. In September it will extend to children over nine months, and from September 2025 children that age and above can access 30 hours a week, necessitating an estimated 85,000 additional childcare places and 40,000 additional staff.

While the report said the DfE was on track to meet its more modest target for April 2024, it warned that “later milestones will be more challenging” and that there remained “significant uncertainties around whether the sector can implement the changes and be financially sustainable”. Only a third of local authorities are confident they will have enough places for September, according to the NAO.

The report expressed concern there was no consultation with the early years sector due to Treasury constraints before the 2023 spring budget. As a result, “HM Treasury and DfE set dates without understanding local authorities’ and providers’ capacity and capability to deliver an unprecedented level of growth in the workforce and new places”.

Plans for a series of pilot studies in a number of local authorities, which would have helped test feasibility and establish evaluation baselines, were cancelled “due to affordability constraints”, the NAO said.

The report warned of the danger of “unintended consequences”, highlighting the risk to quality as large numbers of inexperienced staff are drafted into the early years workforce to meet demand, against a backdrop of higher staff-to-children ratios.

It also flagged concerns that the attainment gap between disadvantaged children and their wealthier peers, which has been widening in recent years, could grow further as a result of the expansion, with the lowest-income parents locked out of the scheme. The DfE considered rolling out the entitlement to disadvantaged children to counteract this risk, but decided against this due to cost.

Neil Leitch, the chief executive of the Early Years Alliance, said: “This is an utterly damning report which lays bare the fundamental flaws of the early years expansion plans, and the consequences of a ‘headlines first, details later’ approach to policymaking.

“From the cancellation of planned pilots to the decision to exclude disadvantaged children from the scheme, it’s clear from this report that this policy has been rushed and poorly thought-out from the very beginning.

“As a result, we are now in a situation where the sector has nowhere near enough places – or staff – to meet likely future demand, to the extent that even the government is warning that future stages of rollout are likely to be ‘problematic’.”

Gareth Davies, the head of the NAO, said the government had “sensibly” staggered the rollout to reduce risks, but warned: “The next phase of the reforms will be significantly more challenging, with little contingency and flexibility in its ambitious timetable. The department must monitor the programme closely and respond promptly to emerging risks.”

The shadow education secretary, Bridget Phillipson, said: “This is yet more resounding evidence that the Conservative government made a childcare pledge without a plan to deliver it – and yet again families will be paying the price of the Tories’ broken promises.”

A DfE spokesperson said: “The NAO rightly acknowledges that we have already exceeded our target for the first phase of the rollout, with almost 200,000 two-year-olds already benefiting from government-funded places – supporting parents to balance their career and childcare.

“We have taken decisive steps to prepare the sector for the next phases, including increasing funding well above market rates, launching a workforce campaign and new apprenticeship routes, as well as providing £100m of capital funding to help expand or refurbish facilities.”


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