Free childcare expansion could see deprived two-year-olds 'lose out'

The government spending watchdog the National Audit Office (NAO) has warned that if nurseries do not receive adequate financial support to extend free childcare provision from 15 hours a week to 30 hours a week for eligible three- and four-year-olds, they may choose to offer fewer places for two-year-olds as they are more expensive.

A report by the organisation states that there is a risk that the new entitlement will have a "negative impact" on the the entitlement for disadvantaged two-year-olds.

“Many eligible two-year-olds are still not accessing this entitlement and providers told us they commonly had to cross-subsidise their work with two-year-olds, which requires more staff per child, despite local authorities offering higher hourly rates," the report states.

“Expanding the number of hours which many three- and four-year-olds are entitled to may encourage providers to do more work with them and less with two-year-olds."

Amyas Morse, NAO comptroller and auditor general, has called on government to ensure “certain groups don’t inadvertently lose out”. He said pilots of the expanded offer, which are set to get under way in September, should be used to ensure children don’t miss out on provision.

“In rolling out the new entitlement the department should use and evaluate its pilots to make sure that certain groups do not inadvertently lose out,” he said.

“It is particularly important that the number of disadvantaged two-year-olds accessing free childcare continues to rise, in line with the Department for Education's own aspirations.”

The 15 hours of free childcare currently offered to parents of disadvantaged two-year-olds has been in place since September 2013. However, many parents of children in this age group are still not using the entitlement, with only 58 per cent of parents having taken up the offer against the DfE’s aspiration for take-up levels between 73 per cent and 77 per cent.

Purnima Tanuku, chief executive of the National Day Nurseries Association, said: “This report reaffirms our conclusion that providers are keen to offer the new free 30-hour childcare entitlement but may not be able to if the funding is not viable for them to cover their costs adequately.

“The report also highlights a real worry that introducing 30 hours for three- and four-year-olds may displace the offer for disadvantaged two-year-olds, the very group the free early education scheme should be supporting the most."

A survey published by NDNA last week found that less than half of nurseries say they plan to offer 30 hours of free childcare each week.

Childcare minister Sam Gyimah said: “As this report shows, more parents than ever are accessing high-quality free childcare, backed by record levels of investment – including an additional £1bn a year by the end of the parliament.

"The latest figures show our plan is working, with nearly all three- and four-year-olds receiving 15 hours of free childcare a week as well as over 70 per cent of disadvantaged two-year-olds, according to a recent survey of councils – and more than ever are reaching a good level of development.

"Thanks to our plan to support more working parents by doubling the free hours the government provides we expect this trend to continue.”