Expansion of free childcare hours

To enable a well-functioning early years system, local authorities need the resources, powers and levers to effectively manage the market. Councils have a series of statutory duties regarding early childhood services, including securing them and consideration of the quality, quantity and sufficiency of local provision. There is, however, a conflict in the role of local authorities as they must meet statutory guidance requirements for funded places such as quality, whilst having a duty for the sufficiency of places. Therefore, local authorities have to balance the need for high quality places with the need for sufficient places.

Currently, local authorities are unable to prevent providers from opening where there is already sufficient provision and can sometimes find it difficult to encourage providers to set up provision in areas where it is required. The statutory guidance for local authorities needs to be reviewed. In particular, clarification is required about the charging of consumables for providers and how local authorities manage this. 

Councils are also in the unique position of being able to bring together different parts of the system, have insight into the needs of families and children and work with different organisations to respond. 

Local authorities have a duty to ensure that parents have access to sufficient childcare locally. However, both direct funding for supporting this duty and the wider local authority funding picture remain challenging. 

Since 2017, local authorities have had to pass through at least 95 per cent of funding to providers. With government proposing further changes to the pass through rate when local authorities have increasing responsibilities, this is causing greater concern. This means local authorities are not always able to provide as much support to providers and parents as they would like to due to limited funding to deliver support.  Local authorities need to be seen as an essential part of the early years system and be part of the picture of investment. 

Despite having no direct levers, local authorities use innovative ways to encourage new providers such as offering incentives or subsidies. Of increasing concern is the mix of provision on the market, for example, the increase of private equity funded large providers, and larger providers replacing smaller, more community-based settings. 

There is significant variability in access between and within areas. Some local authority areas have experienced a particularly high number of closures, which can result in some families having to travel long distances to access early years provision. 

The LGA believes that within each local area (at a level that is reflective of the local population size) there should be an ‘expert’ provider, this can be either maintained, PVI or school-based provision. This provider would be given additional funding, through the local authority, to support staff development, provide concerted support to some children and families, alongside the local authority, and have intense wraparound support from other services such as speech and language therapists, SENCOs and family support workers. Dependent on the size of the local area, a hub and spoke model could be explored to ensure equitable access. The status of these expert providers would need to be underpinned by a clear framework setting out responsibilities of different partners.

The Government should work with councils and wider stakeholders to develop a clear strategy for what the childcare and early education provider market should look like in the long term with clarity surrounding the role of the private and voluntary sector, maintained nursery provision and school-based provision alongside wider community groups.

Maintained nursery school (MNS) provision

There has been a decline in the number of maintained nursery school provision. Although unevenly distributed across the country, they can provide essential support to children and families in particular those with additional needs or living in more deprived areas. The early years education and childcare market must provide high-quality choices to parents and carers and this should not be at the detriment of one sort of provision over another. 

Childminder agencies (CMAs)

The development of CMAs is a cause for concern among some local authorities, considering the quality of these providers and the lack of support they offer to childminders locally. This is particularly due to the potential conflict of interest between childminder agencies being the arbiter of quality whilst trying to attract as many childminders as possible.

Childminders need support to reduce the financial and regulatory burdens they experience. The opportunities for councils to develop childminder agencies or provide different ways to support childminders should be explored.

Councils as providers

Local authority terms and conditions are also more costly, creating an even greater cost for LAs to set up and deliver their own provision. There needs to be clarity regarding Ofsted registration of local authority led provision and, given local authority responsibility around assessing quality, there will need to be consideration on how these expectations are balanced if they also have their own provision. Of crucial importance is ensuring local flexibility as what may work for one place, may not work for somewhere else. 

Early education and childcare are essential for both supporting parents into work and for supporting the development of children, resulting in long-term positive outcomes. The OBR estimates that by 2027-28 the forthcoming expansion will enable an additional 60,000 people to enter employment and work an average of around 16 hours a week. All of the changes together will result in an impact of 0.2 per cent on GDP. 

However, the policy direction to date has been convoluted, with significant focus placed on the impact on parents getting into work. This has led to a convoluted offer where some of the most vulnerable families, who may benefit most from early education and childcare, are left with limited access to funded entitlements, particularly following the expansion. There needs to be a discussion on the best allocation of public funding to ensure there is a mix between early education and childcare and that these two different priorities may require different policy responses to make the best use of funding.

Increased funding to early years entitlements is part of the story for improving the early years education and childcare system. The government has recognised the challenging financial situation for providers reflected in the £500m additional investment into early years education and childcare made in the spring budget. Despite this, and the increased 2-year-old rate, there remain concerns about the funding quantum. Furthermore, providers have a significantly lower rate when supporting 3- and 4-year-olds which may lead to a drop in places offered, or providers having to charge top ups. Crucially, investment is coming into a system that has experienced significant challenges and some providers have been running at a loss for some time alongside a lack of investment into the workforce. 

There needs to be an independent review to understand the cost of good quality early years education and childcare and ensure that providers are appropriately paid, local authorities have the funding they require to implement their statutory duties and support providers, and that children can get high quality outcomes. 

A highly qualified workforce is one of the main factors in ensuring a quality early education and childcare offer which can have a long-term positive impact on children, improving their outcomes later in life. Workforce recruitment and retention has long been a concern for the early years sector however it appears to have reached a tipping point with increasing numbers of providers struggling to recruit properly qualified staff.

The workforce is, on the whole, underpaid and undervalued, with anecdotal reports of practitioners leaving the sector to work in other sectors such as retail which offer higher rates of pay with less responsibility. The qualification and training system is complex with fewer people coming through the system to take up roles.

A proper workforce plan is required, rather than amendments made around the edges of the system. This workforce plan needs to be long-term, address the root causes of the challenges and have sufficient time to be implemented effectively. This should be accompanied by clarifying the pathways into early years careers that prioritise the roles of early years workforce and does not just focus on schools. 

The workforce also needs to feel they have the skills and confidence to work with children with special educational needs and disabilities and other vulnerabilities. The workforce also needs to be able to work with parents, support the home learning environment and have space to provide interventions with young children rather than undertaking time consuming paperwork.