Sustainability of the nursery sector briefing - House of commons, 10 October 2018

There is evidence that while high quality childcare can support children’s development and increase academic skills, low quality childcare produces either no benefit or even negative effects. The quality of provision locally, therefore, is at least as important as the quantity.

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Key messages

  • Effective, high quality early years provision makes a difference to young children, helping to break the cycle of disadvantage, improving social mobility and offering them a good start in life.
  • There have been welcome changes to early years provision recently, including the 30 hours free childcare scheme for working families. However, the funding rates are insufficient and this is risking both the sustainability of many providers and the sustainability of high quality provision.
  • As providers seek to offer children spaces within the current funding constraints, there is a risk to provision for disadvantaged two-year-old children and those with special educational needs and disabilities, for whom provision is more expensive.
  • Well qualified staff improve the quality of nursery settings, however many councils are concerned about the quality of staff locally, citing issues with pay, professional development and career progression when it comes to recruiting and retaining high quality staff.
  • The new early years funding formula means that councils now have to pass through 95 per cent of all early years funding to providers. This ‘high pass through’ rate is resulting in less training and support for providers, including business support.