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Report from Commons Public Accounts Committee concludes 30 funded hours policy at risk

A report from the Public Accounts Committee (PAC) inquiry on free early education and childcare entitlement has warned that the Government’s plan to extend the free early years entitlement for 3 and 4 year olds is at risk because there may not be enough childminders and nurseries willing to offer places.

The inquiry was set up following the National Audit Office’s value for money report on entitlement to free early education and childcare. PACEY submitted evidence to the inquiry and worked closely with the Committee members outlining the challenges that providers face in delivering the extended entitlement, including the barriers that childminders and other small businesses experience.

The report points out that because of the shortfall in funding for the free entitlement hours, there is a real risk that many providers will opt out of offering the extra hours. Most worryingly, the report says that families from disadvantaged areas are set to be affected the most. It also finds that the Department for Education does not have robust plans to ensure there are sufficient qualified early years staff "so that providers can continue to offer high quality childcare".

The Committee argues that the pilots of the free entitlement, which will start this September, should be used to test out the feasibility of the offer and that a full evaluation should be presented before the full implementation in September 2017.

Meg Hillier MP, Chair of the PAC, said:

"We are particularly concerned that the economic realities of providing childcare will deter providers from offering the extended provision.

Evidence suggests this would most affect families from disadvantaged areas, which is doubly concerning given the already disappointing take-up of funded places for disadvantaged two-year-olds.

The Government must take responsibility for identifying the reasons for this and take remedial action.

It would be a grave mistake to extend this policy on shaky foundations and we expect the Department for Education to respond swiftly to the concerns set out in our Report.

Taxpayers must be assured their money is being spent wisely and as a priority we urge the Government to explain exactly how it will measure value for money of the current and extended entitlement."

Liz Bayram, chief executive of PACEY, said: “We are pleased that the Committee has listened to the input provided from PACEY and other contributors in raising concerns about the delivery of the extended funded hours. It is clear that a fair fee is critical so that providers are able to deliver the extra hours to working families. We are also keenly aware that much improved business development support is needed for many settings, at a time when most local authorities simply don’t have the capacity to do this anymore.

“PACEY made it clear to the Committee the particular barriers that childminders face in offering the free entitlement, and we are pleased to see these points reflected in the report. Childminders are put off delivering funded hours because of poor fee levels and inadequate administration like all providers but also because their fees are often different to other settings; are reduced when their funded two year old children turn three (unlike a nursery, childminder ratios do not change for children under five) and because childminders still cannot claim the free entitlement for any related children they care for.

“PACEY is concerned the early implementation phase has placed too much reliance on the handful of childminder agencies that exist, despite continued childminder concerns around the agency approach. It is clear that urgent action is needed to address these challenges to ensure that working parents can benefit from the planned 30 hours of funded childcare from September next year.”