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NEWS: Institute for Fiscal Studies analysis of political parties' proposed early years packages

The Institute for Fiscal Studies have today released their analysis of the early years packages from the Labour party and the Liberal Democrats.

Their key findings include that:

  • Both the Labour party and the Liberal democrats have announced early years packages that feature unprecedented increases in spending on free childcare. They estimate that Labour's free childcare policies would cost £2.6 billion in 2024, an 80% increase on spending under current plans. The Liberal Democrats plan would go even further with the Institute's costings suggesting they will be spending £7 billion which works out as three times current plans
  • Delivering such big increases in spending in such a short time would be immensely difficult. They state that putting mechanisms in place to ensure money is spent well, on delivering high-quality childcare, would be crucial to ensuring the success of these policies.
  • Both parties plan to make full time childcare available to all 2-, 3- and 4-year-olds. This would remove all targeting for working and disadvantaged families in the current system. 
  • Both parties propose to increase per-hour funding rates. Labour are looking at increasing them by 50% to £9 by 2024 and the Liberal Democrats by 21% to £7.22.
  • Both parties will increase 3- and 4- year olds minimum funding rates. With Labour making the minimum rate £5.60 by 2024 and £5.36 for the Liberal Democrats.

PACEY Chief Executive Liz Bayram comments:

“We welcome the Labour party and Liberal Democrats proposals to extend entitlement to more children but only if:

  1. Funding rates are sustainable for providers who are currently struggling
  2. Any future government is dedicated to working in genuine partnership with the childcare sector to ensure there is full capacity to provide for take up of entitlements (currently 95%)
  3. Ensure that the focus is not just on quantity of places but also ensuring that the quality of care is sustained.

This is the only way to ensure our youngest children, especially our most disadvantaged, are given the firm foundations they need for the future."