The Big Debate: How could government-funded childcare be more sustainable?

CYP Now: From a provider perspective, is the funded childcare programme sustainable?

June O’Sullivan: I wish I could just say yes or no but it depends on so many factors. Some people will say no because we’ve been underfunded for so long that it’s very difficult, but at the same time we still managed to do stuff. So technically it would make a lot of difference to us if we were properly funded then we could really ensure it was sustainable. But what do we mean by sustainable? Is it sustainable so you can pay dividends to private equity-funded large chains? Or is it sustainable so that children from disadvantaged homes get as equal access to the service as their more affluent peers? High-quality early education and care makes a significant difference to a lot of children, but a huge difference to children from a more disadvantaged background.

CYP Now: What does research tell us about how well the funded offer is operating?

Tammy Campbell: Looking at take-up trends initially, we know that things have become more skewed towards advantaged children: so about 80 per cent of local authorities say that they don’t have enough places for children with disabilities; recent research by the New Economics Foundation estimates that 44 per cent of children live in “childcare deserts” where there’s three children to every one place, and that’s heavily skewed to deprived authorities [so] children from low-income families are less likely to be able to access early education and care. It’s disgraceful that this is the current situation. Instead of it being addressed, what’s happening is this expansion of funding towards working parents who disproportionately tend to be at the more advantaged end of things. So, what the expansion is likely to do is to compound the existing unmet need and this is likely to be highly problematic.

CYP Now: Will new funding rates announced as part of the expanded offer alleviate some of the financial challenges affecting the sector?

James Hempsall: The new rates are rising. That, in itself, is a good thing. But there’s no one-size-fits-all in this sector. We’re so diverse in terms of models of delivery, costs, geographical locations and buildings in which we operate. For some the funding rates will alleviate their pressures and be a boon to their businesses. For some it might be more marginal as an issue and others will need to take a considered look about what that new funding means to their business.

It’s not just about funding rates. We’re talking about new areas, new age groups. We’ve never had funding for hours to pay for nine-month-old children or for the two-year-olds of working parents. These are new entitlements that will bring funding into new areas of each early years provider’s business. And that means that every single provider’s case is different and needs to be looked at as an individual. So, there’s not a yes or no answer – it depends for each setting and highlights the complex nature of the funding and all the factors that influence financial sustainability.

CYP Now: Will providers be able to accommodate the rise in demand linked to the expansion of the funded offer?

June O’Sullivan: “There’s a real concern that there isn’t enough staff to open provision to meet the demands that parents are going to request. Also, the people who are going to benefit from it are already in the nursery. So, you’re not going to be able to take vast quantities of other people into an existing provision that’s already in some cases full. We have been going on to the government about this since 2017, about doing recruitment campaigns, building a workforce strategy, helping us with the apprenticeship model to make sure we get qualified staff that are capable at the end. We haven’t had that.

A lot of the new staff I’m seeing coming through are not well trained – they know how to do stuff, but they don’t know why, they don’t have the theory. Therefore, if you have a lot of children exhibiting quite high levels of need and you’ve been trained online or in a small setting and come into a nursery where there are higher levels of children with higher levels of need…the pressure on you is high. It’s not surprising that retention of staff has now become a major problem.

CYP Now: Will the staff-to-child ratios change from 1:4 to 1:5 in 2024 make settings more sustainable?

June O’Sullivan: The ratio change is neither here nor there. Most of us are not going to apply it. We’ll probably give the managers the flex at the beginning and end of the day to play around with it. So, if you have five toddlers left, you might use the ratio flexibility to manage your staff because one of the reasons staff are not staying is to be able to go home on time. It’s such a reasonable request. When we were short staffed…we have kept our more experienced and capable staff doing the beginning and end of days. They were tired and just wanted to be able to finish their shift.

CYP Now: What changes are needed to make the programme sustainable for the long-term whatever party is in government?

Tammy Campbell: There’s certainly a very big argument for moving to weighting funding away from subsidising more wealthy families towards those who could benefit more from it – the children from these childcare deserts, deprived low-income areas, with disabilities, in care, all of the children who are marginalised. If we do move to a Labour government, I think that sort of policy environment, with more concern for the marginalised families and children, it would need to swing towards – rather than continuing in the current direction where all the resources are going upwards rather than being spread more evenly.

There is still Covid playing out and we can’t just pretend that it’s not had an impact on families and on young children. It has and we don’t exactly know what’s playing out but of course, it is going to mean that a lot more people are in situations that they weren’t before; a lot more children have needs that they wouldn’t have had in previous cohorts. So, if we don’t want to compound the issues it does need to be properly resourced or it’s just storing up problems for the long-term.

CYP Now: From a provider perspective, what changes would make the programme easier to operate for the future?

James Hempsall: For a long time, I’ve been calling for a root and branch review of early years funding and childcare strategy because we have all sorts of different jigsaw pieces of strategy – you could argue that the latest new expanded entitlements are another piece of that – and I’m not so sure that they fit completely together. Why have we got two programmes, one for the least advantaged two-year-olds and one for two years of working parents? Who falls in the middle of those two initiatives? Not only are they complicated for providers to administer and get their heads around, they’re also difficult for parents and families to navigate in terms of what they’re entitled to and when. So, while I think all of the component parts of the strategy are sensible and well meaning, I would like them to actually be looked at as a whole and to start thinking about where those gaps are, where are the joins, where are the efficiencies? Providers and local authorities are always asking me “how can we make the system simpler?” How can we make things clearer – the processes, the applications and the funding formula – so that, ultimately, they impact on children’s development and learning to the max and you have a more efficient system of administering the programme?

THE PANEL

Tammy Campbell, director for early years, Education Policy Institute (EPI)

Campbell joined EPI in 2022, while completing a British Academy Postdoctoral Fellowship based in the London School of Economics’ Centre for Analysis of Social Exclusion (CASE). She remains a visiting senior fellow at CASE. Her research has included investigations of inequalities and experiences in the pre-school years.

June O’Sullivan, chief executive, London Early Years Foundation (LEYF)

O’Sullivan has run LEYF for 20 years, with her work recognised as helping the educational development of socially disadvantaged children in their early years. LEYF has grown to become a network of 42 nurseries employing more than 800 staff, making it one of the London’s largest charitable social enterprises.

James Hempsall, managing director, Coram Hempsall’s

Hempsall founded Hempsall’s Consultancy in 1999. The organisation joined the Coram group last November, with Hempsall remaining at the helm. It provides project management, consultancy and research in early years and childcare, as well as delivering relevant training workshops and courses.