Fears over how free nursery care for under twos will impact staff and wages

Under-twos will become eligible in September for care paid for by taxpayers as part of a major drive to ease eye-watering costs of provision and help more parents return to work.

Concerns remain about how many of the predicted 15,000 extra places will be available come the autumn amid fears shortages in both staffing and space will leave youngsters missing out on funded provision.

Under official estimates, the Department of Education is calculating 170,000 new places will be needed overall by September next year compared to 2023, with half still to be created. It is predicting 40,000 additional staff will be needed by autumn 2025.

A major national recruitment campaign for the sector was launched in February as state spending on early education is doubled to beyond £8bn by 2027-28 but nurseries remain concerned over staffing shortfalls.

Earlier this week the government spending watchdog, the National Audit Office, also raised concerns about the quality of provision, saying that the risk of an influx of “inexperienced” early years staff, alongside higher staff to child supervision ratios for two-year-olds, may jeopardise the quality of childcare provision.

Providers are also facing significant increases in costs from this month with the minimum wage rising by 10 per cent.

Under the regulations, they cannot charge top-up fees for state-funded children but many have hiked payments for “consumables” for instance to cover food and the cost of materials used by youngsters.

Ministers have handed £100m to local authorities for capital improvements in nurseries but some businesses are warning delays distributing the money will hamper expansion plans to provide additional space for the youngest children.

Lindsay Clayton, a childminder in York for most of the last 20 years, is due to look after three new under-twos from September who will be eligible for 15 hours a week of state funding.

She said she had lower overheads than nurseries, making her more affordable for parents, but she could not expand due to limits over how many children she could look after, with a maximum of three or four at a time.

There was significant bureaucracy involved under the new arrangements which were also complicated for parents to understand.

“It does take an awful lot of paperwork and time and not all childminders want to do that,” she said.

“They’re saying it will increase numbers of childminders but I think they’re putting up barriers.”

The charity Coram Family and Childcare’s annual survey of local authorities, published last month, underlined fears the expansion in provision would be limited due to a shortage of places.

Only 28 per cent of English councils said they were “confident” or “very confident” about having enough places for the expansion of state-funded care to nine-month-old children in September.

This fell to just to just 12 per cent for the final expansion of provision in September 2025 when children of working parents will be eligible from the age of nine months for state-funded care of 30 hours a week in term time until they start school.

It found continued concerns about a severe shortage of provision for youngsters with disabilities and for families in rural areas.

The vast majority of councils identified the local childcare workforce as a barrier to successful delivery of the 30-hours entitlement next year, while more than half were also concerned about shortages of building space to meet an expansion in demand.

The report said many providers were expressing concern around “inadequate” funding rates, with small providers struggling to cover the costs of provision including pay increases, pension contributions, rent and utilities and having to pass on costs to parents.

“Increasing costs and insufficient availability of childcare across Great Britain means parents and carers do not have equal access to work and children do not have equal access to childcare, even though we know how key this can be in boosting children’s outcomes, especially those from more disadvantaged backgrounds,” it said.

Launching the survey, Coram’s managing director Ellen Broomé, said: “Over the next few months, we need the Government to work closely with local authorities and childcare providers to make sure they are supported to deliver for families.

And in this election year, we call upon any future government to commit to reforming our childcare system to make sure all children can access high quality early years education and all parents can make meaningful choices about work and care.”

Wholesale reform of early years provision in England seems a distant prospect despite repeated criticism that years of piecemeal changes make the system complicated, with poor access for youngsters who might benefit most.

A new report last week by the campaigning women’s rights charity the Fawcett Society, in partnership with the York-based Joseph Rowntree Foundation, set out a plan for lasting change based on transformations in Australia, Canada, France, Ireland and Estonia.

It calls for a universal free offer for all early years children although it accepts this will take time.

It said state funding for “free” hours of care must reflect the full cost of delivery which forced many providers to cross-subsidise hours with additional payments from parents.

There should be a focus on extra subsidies for the poorest families amid evidence many lower income households will not benefit from the current expansion of state-funded provision which is restricted to parents working at least 16 hours a week.

It also calls for additional funding to nurseries to operate in unprofitable parts of the country.

Measures were also needed to improve pay and conditions across the early years workforce to improve quality and care for youngsters.

Jemima Olchawski, chief executive of the Fawcett Society, said politicians of all parties needed to work together to make long-term changes to childcare.

“Our childcare is some of the most expensive in the world and it isn’t working,” she said.

“We’ve got a patchwork of provision that doesn’t meet the needs of children, parents, or the childcare sector.

“There are plenty of countries around the world who simply do childcare better and we should be learning from their ambition.

“As we approach a general election, all parties need to be aware that any credible vision for transforming childcare mustn’t simply offer bolt-ons to a crumbling system.

“We must be more ambitious, particularly when it has such an impact on both children’s life chances and women’s ability to work.”

Alfie Stirling, director of insight and policy at the Joseph Rowntree Foundation, called for an urgent plan for improved standards and regulation.

“Our dysfunctional childcare system is not working for families in the here and now and it’s in danger of failing the families who need it most for many years to come,” he said.

“Our whole economy and families in poverty in particular need a childcare system which is affordable and high quality and which everyone can access.

“Failing to deliver on ambitious reform will hold back our economy and harm families and should be a major political priority for our country.”