Early years education funding - House of Commons, 21 July 2021

• Good quality early education makes a difference to children’s lives. By the time disadvantaged young people sit their GCSEs at age 16 they are, on average, 18.4 months behind their peers and around 40 per cent of that gap has already emerged by age five. Pre-school has almost as much impact on a child’s education achievement as primary school does – and the impact is even greater for those at risk of developing learning difficulties. Recent policy changes have extended the reach of early education to more children and for longer. They have also supported more parents into work, or to work more hours.
• The LGA has long raised the issue of funding for early entitlements being insufficient, impacting on the quality of provision and the availability of good support for children with special education needs and disabilities (SEND). Low funding rates result in low pay for childcare workers, with almost half (45 per cent) of childcare workers also claiming state benefits and childcare workers earning around 40 per cent less than the average female worker. This in turn is resulting in a recruitment and retention crisis in the sector, in particular for well qualified staff. This fails to recognise the vital work that childcare workers do and the significant contribution they make to the future life chances of all children.
• The International evidence base shows a picture of UK under-investment in early years. OECD analysis from 2019 shows that UK expenditure on early education and care for children aged 0 to 2 years is amongst the lowest of all 16 countries for which measures are available, at 0.1 per cent of GDP. This compares with 0.3% in Germany and 1 per cent in Norway. UK expenditure on pre-primary education from 3 years to the start of primary school is 0.4 per cent of GDP, compared to the EU23 average of 0.7 per cent.
• Maintained nursery schools are currently funded at a higher rate than other settings in recognition of the extra costs they face, for example the requirement to have qualified teachers. They both achieve the highest Ofsted ratings – 63 per cent are outstanding, compared to 20 per cent of all providers on the early years register – and support more children with SEND than other settings. They are also concentrated in disadvantaged areas which is contrary to the trend for good and outstanding provision to be more likely to be located in the least deprived areas. However, this funding is not a permanent feature, and leaves local authorities and settings unsure on the future of this funding.
• We believe that funding rates need to be significantly increased to enable the early years sector to reduce the disadvantage gap and allow all children the opportunity of the best possible start. We must recognise the success of maintained nursery schools and properly resource both these and private, voluntary and independent providers to appropriately pay the qualified staff needed to deliver high quality early education.
• The range of childcare schemes currently available, for example, 15 hours for disadvantaged two-year-olds, 30 hours for three and four-year-old children of working parents, and tax-free childcare, is currently complex and schemes appear to have competing aims, for example improving social mobility or getting parents into work. This can make it difficult for parents to know the best option for their family and can result in varied support. We would encourage a more streamlined approach to provide a more coherent offer to families, encourage take up and support development of the right provision in the right areas.
• Recent changes to the early years national funding formula have reduced the amount councils can retain to support quality improvement or the outreach work that has encouraged families from disadvantaged backgrounds to engage in early education. If the Government is to achieve its aims around social mobility in the early years, councils must be properly resourced to play their part in supporting those aims.
• Covid-19 has had a significant impact on the sector, there were some welcome funding directions during Covid-19, such as decision to fund the Autumn normally was appreciated by the sector, however this was not the case for the Spring Term funding which with delayed announcements left the sector in significant confusion. The numbers of children attending early years settings has still not returned to levels and the long term impact on the sector is still a concern, as well as the impact on children.
• We frequently called for additional, immediate investment for the sector to provide them with some much needed additional funding during the pandemic, for example to cope with the costs of cleaning, PPE or staffing.
• Early years providers are raising significant concerns with regard to the workforce, with the pandemic exacerbating existing challenges in the system. Early years staff need to be celebrated and recognised, both in practice with qualifications and career progression and by the public and policy makers with the complex role that they play. The workforce is one that is recognised for its passion and this needs to be mirrored by recognised professionalism through qualifications and staff need to be enabled to articulate this as they move through the profession.
• Early years is an essential element of levelling up. As highlighted in our Child-centred recovery report, it is vital that all parents have access to the good quality childcare they need to enable them to return to work, while ensuring that children have the support they need to develop school readiness. Early years needs to be prioritised as the government looks to invest in education recovery, and be seen as an equal partner in this.

Laura Johnson, Public Affairs and Campaigns Adviser

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