Backbench Business Committee Debate: Support for childcare and the early years, 16 October 2023

• The Local Government Association (LGA) is the national voice of local government. We are a politically led, cross-party membership organisation, representing councils from England and Wales. 
• Our role is to support, promote and improve local government, and raise national awareness of the work of councils. Our ultimate ambition is to support councils to deliver local solutions to national problems.

Read the LGA’s written evidence to the Commons Education Select Committee’s inquiry into Support for childcare and the early years. 

• High quality early years provision can generate sustained and significant improvements on children’s outcomes, reducing disparities in later life. Not only does good quality provision have a positive impact on children’s development, it also ensures that parents and carers can feel confident to access childcare. Securing enough high-quality childcare for children to get the places they need is something we need to invest our time and energy into. A mixed early years and childcare market can ensure there is flexibility to meet the needs of children and their families. Local authorities have an essential role in getting this right.
• The Chancellor’s announcement in March 2023 of 30 hours of free childcare for every child with working parents aged from nine months to five years means we need to understand what works and what will ensure councils can deliver on their sufficiency duty. Changes to the early years system should not just be seen as quick fixes around the sides: a more holistic view of what works, what would support the workforce, and how to ensure there is high quality early education and childcare should be considered.
• LGA has long highlighted that funding for early entitlements is insufficient, which is impacting the quality and cost of childcare provision; the sustainability of providers, and the availability of good support for children with special education needs and disabilities (SEND). Long-standing challenges caused by the underfunding of early years provision are now being exacerbated by the rising cost of living and inflationary pressures.
• The statutory guidance on the local authority sufficiency duty should be reviewed, ensuring that councils have sufficient levers and funding to deliver on their duties.
• Wider reform of the childcare system is needed to provide a truly accessible and affordable offer for parents in every community. Funding rates, including for universal early entitlements, need to be significantly increased to expand access to childcare and ensure all children have the best possible start in life. 
• To achieve their ambition of closing the gap between disadvantaged children and their more affluent peers, Government should consider expanding the additional 15 hours of free childcare to all three and four-year olds, to ensure all children have equal access to quality early education. Government should also consider expanding the additional 15 hours of entitlements to parents/carers who are studying or are in training, to enable people with childcare responsibilities to upskill, move into work and reduce welfare-dependency.
• Councils’ dedicated early years teams have faced budget reductions which impacts on their ability to carry out vital improvement work. This includes their work with their local early years sector and providing direct support for parents and families. If the Government is to achieve its aim of levelling up and providing children with the best start in life, councils’ early years teams need to be adequately resourced to provide support to their local childcare sector and directly support children, young people and families.

High quality early years provision can have a positive impact on children, particularly otherwise disadvantaged children, in terms of their immediate development and long-term outcomes. Research has found that so long as the child attends high quality provision, any drawbacks to being in provision, such as dysregulated emotional behaviour, is unlikely to have a negative effect.

However, above 20 hours in provision, there is no significant benefit to children’s development of attending early education provision; however, if they are in high quality provision, there is no negative effect of being in early education or care for this time. It should be noted that there is a difference between early education, in which providers support children through the Early Years Foundation Stage (EYFS) and childcare, where children are looked after in a safe, supportive environment but where there is no specified curriculum to follow.

The existing system of early years childcare and education is the result of different, disjointed policy announcements made over time with no clear strategic direction. This has led to a convoluted offer where some of the most vulnerable families, who would benefit most from early education and childcare, are left without access to funded entitlements.

It is essential that the early years system enables parents and carers to work. The OBR estimates that by 2027-28 the forthcoming expansion will enable an additional 60,000 people to enter employment and work an average of around 16 hours a week. All of the changes together will result in an impact of 0.2 per cent on GDP. While access to affordable childcare is important for all families, it is particularly crucial for those on the lowest incomes, women and single-parent families. Childcare enables people to work; increase their hours or take on new opportunities; move out of poverty and improve their families’ and children’s long-term life chances.

According to a report by the Sutton Trust on ‘Quality and quantity in early education and childcare’, the current system attempts to improve outcomes for children whilst ensuring affordable childcare for parents. While these two objectives do not necessarily have to compete, the way the current system is set up means that lower-cost childcare for working parents is prioritised while improving outcomes for children, which requires high quality provision and thus a higher level of funding, has stagnated.

The system crosses different government departments such as the Department for Work and Pensions (DWP) and Department for Education (DfE) which contributes to the confused system with inconsistent information being passed to local authorities, providers and families.

Councils have a series of statutory duties regarding early childhood services, including securing them and consideration of the quality, quantity and sufficiency of local provision. This also extends to wraparound childcare. There is a conflict in the role of local authorities as they must meet statutory guidance requirements for funded places such as quality, whilst having a duty for the sufficiency of places. Therefore, local authorities have to balance the need for high quality places with the need for sufficient places.

Some local authorities are reporting significant concerns about the future of early years settings in their area. While the national picture regarding access to early years provision is complex, the most recent national data suggests that overall there has been a small decline in the number of settings. Where there has been a decline in settings, this does not always equal a significant decline in available places – this will vary from area to area. However, given inflationary pressures and based on anecdotal reports from councils, we believe the situation has deteriorated since this data was collected.

There is significant variability in access between and within areas. Some local authority areas have experienced a particularly high number of closures, which can result in some families having to travel long distances to access early years provision. For example, Ofsted data for the five months to September 2022 shows a net reduction (that is, taking into account both closures and openings) of 40 or more nursery providers on the Early Years Register in each of the North West, West Midlands, London and the South West.

For councils to manage sufficiency effectively and ensure the right provision in the right places, they need appropriate powers and resources. Many councils feel constrained by their inability to support new providers to set up in areas of disadvantage and their inability to stop new, typically large, chains, setting up in areas where there is already sufficient local provision.

Furthermore, over the past 12 years as council budgets have reduced, the reduction in the percentage pass through rate in the early years funding formulae means local authority children’s services teams have had to make difficult decisions to reallocate or redirect funding, reducing the capacity of staff working in early years teams. This has meant councils’ ability to manage and provide direct support to the market has reduced.

The development of childminder agencies (CMAs) is a cause for concern among some local authorities, considering the quality of these providers and the lack of support they offer to childminders locally. This is particularly due to the potential conflict of interest between childminder agencies being the arbiter of quality whilst trying to attract as many childminders as possible.

Some local authorities still have well-resourced Family Information Service teams that provide detailed support to the community. For others, it will be an add-on for some people’s roles. Without greater capacity building into early years teams, some local areas will not be able to access the positive support that can be gained from these expert staff.

Capacity and tools to manage the market

Councils have insight into the needs of families and children and are in the unique position of being able to bring together different parts of the system and work with different organisations to respond to this need. However, to do this effectively, local authorities need the right tools and sufficient resources alongside clear guidance and support from central government. Councils are frustrated when they are unable to stop providers from setting up in areas where there is already excess and have limited ability to incentivise providers or ensure that provision is of high quality. Having a mixed market of provision will bring about the best results for children and families. However, the costs associated with different types of provision need to be recognised. 

Statutory guidance

The statutory guidance on the local authority sufficiency duty should be reviewed, ensuring that councils have sufficient levers and funding to deliver on their duties. The roles and responsibilities of councils need to be clear: balancing good outcomes for all children, quality of provision and sufficiency to meet parental needs.

Councils should have the tools they need to stop a provider from setting up in an area that doesn’t need any new provision where this is undercutting well-established, local provision without adding any new value to local families. Councils also need a greater ability to incentivise providers, particularly for them set up in areas of disadvantage or areas of greatest need.

There should be a national review of the Family Information Service (FIS) to ensure it is fit for purpose and delivering on what parents need to use or access, and there should be flexibility for local areas to choose how best to communicate and engage with their local populations.

Capacity and funding

Many council early years teams do a lot on a small budget. However, with the increasing needs from providers, children and the expansion of entitlements there should be greater flexibility in what local authorities can retain from the early years block through the early years national funding formula to be able to deliver essential services.

Councils need to work alongside providers and families to explain the way that early years entitlements are changing. To do this, they need sufficient funding for posts that supports parents and providers through the upcoming changes.

This also requires careful management of proposals supporting local authorities to develop their own provision – local authority-led provision would have more expensive terms and conditions than the private market due to public sector terms and conditions.

Capital funding is needed to support the development of new provisions in light of the expansion of the entitlement. If this is a provider-led process, councils need to be involved to fulfil their market shaping duties. 

Support for councils

The government could develop a programme of support to upskill and train teams in effective commissioning and market management, when appropriate.

The LGA’s peer review offer provides essential support to council early years teams, but there would be benefit in expanding this, with a particular focus on areas that have expanded provision, so more local areas are able to learn from one another and share good practice.

Planning

Early years provision should be considered in planning applications, as is the current approach with schools.

Regulation

The role of Ofsted should be considered, particularly surrounding powers to understand the quality and financial integrity of large chains. For example, there should be scrutiny if there is a pattern of inconsistent provision within a chain, or if there are concerning financial patterns across multiple chains which may result in sufficiency challenges on a localised basis.

Councils are exploring the options open to them regarding support for childminders, and in some cases, this includes setting up their own childminder agency. Some of the barriers identified have been the cost and the potential for conflict of interest. The Government should explore these barriers and support councils to overcome them.

Technology

Given the range of technology available today, there needs to be exploration of how central government, councils and providers can use technology to improve the collection of data about sufficiency, reduce the process burden on families and provide better information about the state of the market.

Workforce

A highly qualified workforce is one of the main factors in ensuring a quality early education and childcare offer which can have a long term positive impact on children, improving their outcomes later in life.

Workforce recruitment and retention has long been a concern for the early years sector however it appears to have reached a tipping point with increasing numbers of providers struggling to recruit properly qualified staff.

The workforce is considered to be, on the whole, underpaid and undervalued, with anecdotal reports of practitioners leaving the sector to work in other sectors such as retail which offer higher rates of pay with less responsibility. The qualification and training system is complex with fewer people coming through the system to take up roles.

The Government should work with the sector to develop an effective workforce strategy focused on drawing people into the sector, and their ongoing development and training, recognising the benefit early years educators can bring to young children. This strategy should include childminders.

Explore how both people who are in ‘early’ in their career and ‘later’ in their career could be supported to train to be part of the early years workforce. Review existing training and qualification processes across the early years sector, both to enable increased staff training into the system and ongoing development and training.

Family hubs and children’s centres

There is an opportunity to bring about new ways of working within the sector, supporting early years providers and other partners to work closely to together.

This would require building on the effective approach to integrated reviews and bringing together different partners to provide a holistic view of the child. This approach recognises that a range of professionals have unique perspectives on a child and family which can result in a more effective assessment of their progress.

The Government should coordinate the development of a cross-Whitehall plan for children and young people, clearly articulating the role that all departments will play. 

With the development of family hubs and the best start for life, there is an opportunity to maximise the offer that is available for families. With differing direction from central government asking councils to develop different web pages and production of information, this does not allow the opportunity for councils to respond to the ways that families require and use information. There should be more local flexibility in implementing national programmes, alongside a more coordinated approach from central government.

Councils should explore the links between wider community facilities, such as libraries, and their role in supporting early years children and families.

Additionally, they should improve commissioning relationships with health services so families and providers can get the support that they need, particularly for children with SEND. The move to place-based delivery through ICS and ICBs is likely to help this but delivering for children needs to be core within ICB strategies. 

Support for children with SEND 

Bringing together different parts of the system means there is the opportunity to provide greater support to children with SEND - for example, through health visitors, SENCOs and speech and language therapists working more closely with providers. This requires investment in the workforce of other parts of the system. 

Expanding early entitlements 

Currently all three and four-year-olds are entitled to 15 free hours of early education or childcare per week. Since 2017, families that earn over £152 a week have been entitled to an additional 15 hours of free early education or childcare. This offer is not available to children from families on the lowest incomes (earning under £152 a week), who are more likely to experience disadvantage. 

There is a significant body of evidence which demonstrates that the first four years of a child’s life plays a seminal role in their overall life chances and that early education has almost as much impact on a child’s education achievement as primary school. To achieve the ambition of closing the gap between disadvantaged children and their more affluent peers, Government should consider expanding the additional 15 hours of free childcare to all three and four-year olds to ensure they have equal access to quality early education, which is foundational to them having the best start in life. 

Government should also consider expanding the additional 15 hours of entitlements to parents/carers who are participating in employment-orientated training and education, to enable people with childcare responsibilities to upskill, move into work and reduce welfare dependency, and support the Government’s aim of creating a high-paid, high-skill economy.

Elliot Gregory, Public Affairs and Campaigns Adviser

Email: [email protected]