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NEWS: NAO report shows shortfall in take-up of entitlements by disadvantaged families

The National Audit Office (NAO) has published a report which evaluates the effectiveness of the Department for Education (DfE) at delivering the 'free' early education and childcare entitlement. PACEY submitted an extensive submission for this report.

The spending watchdog has revealed that high-quality early education and childcare can support children’s development and improve their outcomes however key findings have shown a shortfall in the take up of the disadvantage entitlement. The key findings and recommendations are:

Take-up and impact of the entitlements

  • The Department has not met its aspiration for between 73% and 77% of eligible 2-year-olds to take up the disadvantage entitlement.
  • Families in deprived areas are less likely than other families to take up the entitlements.
  • Factors that limit take-up of the entitlements, such as awareness and cost, particularly affect disadvantaged families.
  • The Department has focused its efforts on improving take-up among disadvantaged families, but does not know what works locally.
  • The impact of the entitlements on children’s development is difficult to demonstrate.

Provision of entitlement-funded early education and childcare

  • The proportion of providers that Ofsted has graded as good or outstanding has increased but is lower in deprived areas.
  • Few parents report not being able to find childcare places but there are concerns about shortfalls and a lack of flexibility in provision.
  • There is conflicting evidence on whether the Department’s funding rates are sufficient to cover providers’ costs.
  • Most local authorities choose not to make full use of the limited flexibility they have to incentivise providers to meet local needs, such as to expand provision for deprived families.
  • The Department has improved its understanding of how well local authorities are delivering the entitlements.
  • The Department has not fully analysed the available data to identify local variation in take-up and provision, or routinely investigate the reasons for variation.


  • The Department should make better use of available data to investigate routinely the geographic variations in take-up of the entitlements and availability and quality of provision. 
  • The Department should work with local authorities to develop a better understanding of the approaches that work best in increasing take-up of the entitlements by disadvantaged families.
  • The Department should assess the extent to which additional charges are acting as a barrier to families taking up the entitlements.
  • The Department should strengthen its evidence base on provider costs in order to build confidence that its funding rates can sustain supply and quality at acceptable levels.
  • The Department should identify how it can best incentivise the provision of sufficient high-quality entitlement places in deprived areas.

Read the full report here.

Liz Bayram, PACEY's Chief Executive comments:
“The National Audit Office’s report makes clear that the government still needs to do more. The early education entitlements are failing disadvantaged families and the report clearly highlights the issues around underfunding, awareness and cost that PACEY has emphasised again and again.

PACEY welcomes the recognition that the Department for Education could do more to encourage the use of the entitlement in deprived areas and look at what else can be done about barriers to families taking up the entitlements. Initiatives such as PACEY’s Together for Twos project (which is funded by the DfE) is showing the impact that can be made through strong local outreach and partnership. We need to learn from these positive examples and ensure they can be scaled up for other local authorities to benefit.

These issues can be addressed across the country but only if well resourced. Only then can we be sure that children who will benefit the most from early education get the support they are entitled to."