Sound Foundations, published by the Sutton Trust and Oxford University, says the quality of childcare currently being provided to disadvantaged two-year-olds is not adequate enough to provide them with the support they need.
Authors of the report want all childcare professionals working with two-year-olds to be qualified to at least NVQ Level 3 and have support from a graduate practitioner to ensure the provision of high quality childcare.
They say improving minimum qualification standards for childcare workers is just one of the steps the government must take before expanding its free childcare offer.
Under the scheme, the country’s most disadvantaged two-year-olds are entitled to 15 hours of free childcare from a nursery or childminder each week.
Initially made available to the 130,000 most disadvantaged children, the Department for Education plans to increase the free childcare offer to 260,000 from September.
The report also argues for all childcare professionals to have access to specialist training that prepares them for working with two-year-olds and that the pay of childcare professionals be improved to reflect their qualifications.
Sir Peter Lampl, chair of the Sutton Trust, says the government must delay the expansion of the scheme and implement the changes if it wants two-year-olds to benefit.
He said: “Getting it right for the poorest two-year-olds would make a big difference in improving their chances at school and in later life, and is therefore critical for social mobility.
“In this tight funding environment the government should focus the available resources on really good provision for the poorest children rather than spreading the money thinly by expanding the scheme too quickly.
“The government’s policy of providing free places for the poorest two-year-olds should be a great investment in the future, but only if quality is not sacrificed.”
His plea has been welcomed by June O’Sullivan, chief executive of the London Early Years Foundation, who believes the government needs to set a slower pace for the scheme in order to avoid causing further damage.
She said: “The government should slow down and allow the places that have been created for the first tranche of two-year-olds to bed in.
“It should only move forward when the right facilities are in place and childcarers who are currently training have achieved the relevant qualifications.
“Instead I fear the government will continue to be led by its desire to meet targets ahead of the next election, so it can make claims that have by no means had such a positive impact on the ground."
However, Anne Longfield, chief executive of 4Children, says delaying the expansion could be detrimental to children and instead calls for the pupil premium to be extended into the early years.
She said: “The extension of free early learning to 40 per cent of the country’s most disadvantaged two-year-olds has huge potential to improve the life chances of millions of children for years to come – we must prioritise rather than delay this crucial programme of work.
“High quality is absolutely essential if we are to narrow the attainment gap between disadvantaged children and their peers – this will take serious additional investment to develop the workforce.
“4Children believes that by extending the pupil premium to the early years, we can fund this vital agenda and ensure that the most disadvantaged children get the support they need to succeed.”
Shadow childcare minister Lucy Powell added: "It is vital that the most disadvantaged two year olds get the best quality childcare to help them get the best start in life.
"There are 38,000 children missing out on childcare promised to them by this Tory-led government.
"This report is further evidence that David Cameron is failing to ensure there is high quality affordable childcare available to all."
In response to the report, childcare minister Elizabeth Truss said that improving the quality of childcare provision is one of her priorities.
She added: “We have been clear that any funding to help expand the service offered by nurseries should be directed to those rated as outstanding or good by Ofsted – something which I expect local authorities to be doing.
“We know that more than 90,000 two-year-olds are already benefitting from funded, early education and that nearly 90 per cent of providers delivering places are rated good or outstanding.
“However, we are also doing a number of things to raise quality which includes working with Ofsted to improve and strengthen the inspection regime, reforming qualifications for those who want a career in early years education and introducing early years teachers.”