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PACEY responds to The National Audit's value-for-money study

The National Audit is currently carrying out a value-for-money study on the Department for Education’s entitlements to early education and childcare in England which PACEY has given a response to. The Department funds three entitlements – the disadvantaged 2-year-olds, plus universal and extended entitlements for 3- and 4-year-olds. It plans to spend £3.5 billion in 2019-20 on these entitlements.

Their study is, in part, a follow-up to their 2016 report but is focusing in particular on whether the Department for Education supports disadvantaged families and children effectively through these entitlements.

PACEY has given an extensive submission to the National Audit Office. Below are some of the key points raised:

Current entitlements and quality

  • PACEY continues to be concerned that the quality of early years provision is substantially lower in deprived areas. Despite in March 2019 Ofsted finding 86% of early years registered providers to be ‘good’ or ‘outstanding’, in deprived areas 18% are rated less than ‘good’.
  • The Governments 30 hours offer is creating significant underfunding. Whilst this is of benefit to those who qualify, without substantial increases in funding for the early year entitlement we will create a two-tiered early education system with quality provision only available to families who can afford to utilise the 30 hour offer alongside additional hours of paid childcare.
  • Current underfunding is creating lower quality provision and challenging recruitment and retention of early years staff. Lack of funding is leading to less investment in staff training and development which are key to quality provision.

Current take-up for disadvantaged families

  • PACEY is concerned about the relatively low take-up of funded childcare for eligible two-year-olds. More needs to be done to encourage eligible families to take advantage.
  • Disadvantaged families are less likely to be well-informed about childcare. Nearly a quarter of parents of eligible two-year-olds are not aware of their entitlement. Parents in disadvantaged areas are also more likely to have concerns about childcare quality.
  • More could be done to promote the two-year-old offer to families who qualify. PACEY is currently working in seven local authorities with low-take up of their two year old offer through our Together for Twos project and it is clear that professionals working with families do not have the information they need to explain the childcare offer and its benefits to qualifying families. 
  • Childminders are still underrepresented in delivering entitlements in this setting. This is due to a number of attitudinal and historical barriers.

Funding barriers for providers

  • There is disincentive for both nurseries and childminders to take up two-year-old offer as they are more costly. It costs more for a nursery to deliver a two-year-old place because of staffing ratios and for childminders the drop in funding levels, as a child turns three acts as a significant deterrent.
  • Government needs to recognise that for childminders ratios do not reduce when children turn three therefore funding should not reduce.
  • Low hourly rate remains the primary barrier to current entitlement.

Administrative barriers for providers

  • PACEY calls on the government to review and simplify the ‘basket of measures’ providers need to meet.  Many local authorities are continuing to require providers to jump through unnecessary and burdensome hurdles to provide funded places.
  • Excessive paperwork, red tape, hidden costs and administrative errors are common complaints.
  • Paying at the end of the term creates significant financial challenges for small childcare providers.

Read our full submission