Fifth Report - Support for childcare and the early years

The Spring Budget announcements are a welcome sign that the Government has realised that urgent care and attention is needed in the childcare and early years education market. We particularly welcome the additional funding for Universal Credit entitlements and the additional investment in extending the subsidised hours, but feel that HM Treasury missed an opportunity to reform tax-free childcare and increase the flexibility of the system.

The childcare and early years education system is already spread across multiple departments and local authorities. Government must commit to effective cross- government working, both centrally and locally. This will be vital to ensure that these reforms are delivered effectively and equitably, and that the opportunities for parents and children are realised. (Paragraph 19) A fair market for providers

The childcare market is struggling, with unprecedented numbers of Early Childhood Education and Care (ECEC) professionals leaving the sector and parents struggling to find appropriate care across the country. The Spring Budget expansions of the funded entitlements place further demand on a struggling sector. To successfully deliver the Budget proposals, the sector needs radically more financial and regulatory reform, including, most importantly, a sufficient funding rate for the funded entitlements.

The Department for Education should work closely and consistently with childcare providers and local authorities from across the country to set the funding rate at a sufficient level. Given that most childcare places will soon be government-funded, it is vital that the Department gets this right, or the already struggling childcare market will see even more closures.

We recommend the Government consider the case for greater ring-fencing of the Early Years block of each local authority’s Dedicated Schools Grant to ensure that more is passed on to the early years providers who are delivering the funded hours entitlements.

We recommend Government work closely with local authorities to identify areas where childcare provision is insufficient and with a view to increasing provision in these areas. It could be useful to begin with a focus on Education Investment Areas (EIAs).

We recommend the Government consider explicitly including childcare and early education as a category in the list of infrastructure set out in the Levelling Up and Regeneration Bill 2022–23. This would enable funding received through the levy to be allocated to childcare and early education and support local authorities to meet their statutory duty on providing sufficient childcare places. (Paragraph 41) Support for childcare and the early years 73

The Government will soon be funding up to 80% of all childcare places in England, up from 50% before the Spring Budget. In recognition of this, and the public benefit that the whole early years sector is providing, the HM Treasury should grant all early years providers an exemption from business rates. Private, Voluntary and Independent (PVI) settings should also be zero-rated for VAT. We heard that VAT costs and business rates facing ECEC settings are taken into account in the DfE’s process of setting funding rates. Following these proposed changes, DfE should not account for any cost savings gained from VAT and business rate exemptions in their calculation of the funding allocations for local authorities. This would allow savings to be channelled back into the settings in recognition for the need for a more qualified (and therefore expensive) workforce. The benefits to retention and development of staff, affordability for parents and expansion of places for children will substantially outweigh the costs of these changes.

We recommend the Government work to remove or reduce the barriers preventing childminders setting up or continuing in businesses and consider developing more incentives to grow this market. It could do this, for example, by a) Allowing childminders to work together in settings outside their own home, following the French model of maisons d’assistants maternels (MAMs). b) Working with the Department of Levelling up, Housing and Communities (DLUHC) to remove barriers to childminders setting up businesses in rented properties. If this cannot be done through a voluntary process in which Registered Social Landlords and local authorities create a specific exemption for childminding businesses, then the DLUHC should consider legislation. c) Permitting parents to claim funded hours for their child if they are cared for by a registered childminder who is also a member of their extended family. An exemption for a childminder’s own children is understandable but it is unclear why grandchildren, nieces and nephews need to face the same barriers. d) Allowing Childminder Agencies to register part-time childminders and considering the balance of costs between Childminder Agency and Ofsted registration costs and fees. (Paragraph 55) Support for parents and families

Parental choice should be at the heart of any Early Years Care and Education policy to allow parents to choose what works best for their family. We welcome the Government’s acknowledgement that parents who need or want to work require more support for childcare costs when their children are younger than 3 years old. The Government must improve awareness of the support available and reduce the complexity of the ECEC system for the Spring Budget changes to be effective in supporting parents who need or want to get back to work.

We recommend that the funded hours entitlement system be made more streamlined. For example, parents should be able to access childcare as soon as they receive an 74 Support for childcare and the early years eligibility code. The requirement for parents to reconfirm their eligibility every three months for both the 30-hours entitlement and the Tax-Free Childcare scheme is unduly onerous and should be reduced to once per year.

To improve awareness and improve parental trust in the childcare subsidy system, we recommend the Government stop describing the 30-hours offer as ‘free hours’ and talk about ‘funded’ or ‘subsidised’ hours instead.

We recommend the Government develop better support for parents who choose to stay at home with their children. For example, HMRC could explore ways to frontload child benefits to give parents more support in the early years when the economic and social impact of childcare is highest. The Department for Business and Trade could also consider expanding parental leave allowances.

Despite some witnesses recommending the withdrawal of tax-free childcare and the use of the funding elsewhere, we recognise the benefits of the more flexible support it can provide, especially for wrap around care for school age children. Therefore, we do not believe that withdrawal would be in the interests of a majority of parents.

Parents who choose to care for their children at home do important work. With better support, parents would have more of a choice over whether they work or stay at home and have better flexibility to respond to their family’s needs. More support would also help parents in developing a better home learning environment. The home learning environment is vitally important component of a child’s development. While support for families is not directly in the remit of the Department for Education, it will be important for the Government to complement their expansions in childcare with a more family-centred approach, and in particular, better support for parents who choose to stay at home.

The Government must do much more to ensure the support available for tax-free childcare is better understood and easier to access. We recommend HM Treasury conduct a fundamental review of tax-free Childcare with a view to making it simpler and easier to use and ensure it is delivering effectively for eligible families. In doing so it should carefully analyse why so many parents who have gone to the trouble of setting up an account do not the use it and seek to monitor ongoing take up and usage of the scheme. Following this review and any changes to the system, the Government should launch a large scale public campaign to improve awareness.

We recommend the Government expand the Family Hub model and commit to longer-term funding. We would like to see a national rollout of family hubs at the earliest possible opportunity. In particular, the £50m fund for ‘Parenting Support’ and the £28.7m ‘Home Learning Environment’ fund should be increased, along with the Best Start for Life funding to support infant feeding and parent infant relationships. Family Hubs should spread awareness of the childcare subsidy offers and increase take up. They should also provide specific, targeted support to families with children with Special Educational Needs and Disabilities.

We recommend the Government make parents in training or education eligible to claim the 30-hours entitlement. This will support single parents who need to retrain to secure more flexible work, and also support parents who are trying to re-enter the Support for childcare and the early years 75 workforce after a period of absence. The Department for Work and Pensions should also consider what further ways to support single parents, for example by raising the single income child benefit threshold from £50,000, where it has been frozen since

Where children are in Early Childhood Care and Education, it should be a high- quality, safe and supportive environment. ECEC should primarily be for the benefit of children. Prioritising the ‘quantity’ of available childcare to get parents back to work over the ‘quality’ of that childcare risks damaging children’s development and widening the disadvantage gap. Increasing the availability, quality and affordability of childcare will be the only way to ensure parental buy in and take up.

We note that there is less data about the benefits of formal ECEC on children under two years old as studies have focused on children who were receiving the funded entitlement. It will be important to ensure that there is a robust evidence base for this age group is developed as the entitlement expansions take place.

We recommend that the Government’s controversial changes to staff:child ratios be closely monitored and reversed if quality and education outcomes are seen to suffer. If the Government’s goal is truly to “bring the UK in line with Scotland and comparable countries”, this change should be accompanied by a strong focus on developing staff qualifications to the comparable level in these countries. This should be supported by a larger piece of Government research to better determine the optimal mix of qualification in early years settings.

In the short term, to prevent the existing qualification levels of falling any further, the Level 2 English and maths requirements for ECEC staff to count in staff:child ratios should be reviewed , and alternatives considered that are more tailored to the early years sector. When considering the results of the consultation on this matter, the Government should ensure that any changes to this requirement ensure that quality of numeracy teaching is a priority.

The Government has acknowledged the importance of graduate leadership in the ECEC sector. It should now listen to sector-wide calls for an equivalent of the Graduate Leader’s Fund to be reintroduced. We recommend that this is given a broader name, such as the ‘Leadership Quality Fund’, and that it can accommodate a wide variety of professional ECEC qualifications. (Paragraph 125) Careers for the Early Years Workforce

Early years professionals are vitally important. We recommend career development for early years practitioners be made an urgent priority in order to attract and retain more people in the profession. We are concerned about lack of parity of esteem between early years settings and primary schools.

We recommend the Government engage with Local Authorities and seek to address the cost of mandatory training required by early years professionals, such as paediatric first aid and safeguarding courses. Local Authorities should work towards providing 76 Support for childcare and the early years free or heavily reduced mandatory training for early years practitioners and also allow more flexibility with timing to limit the impact on provider business, for example by offering evening courses.

We recommend the Government ensure that the early years Sector is seen to be, and feels itself to be, a valued profession. To achieve this, we recommend the Government develop a comprehensive Early Years Strategy with a strong focus on workforce development. As part of this strategy, the Early Career Framework should be expanded to the early years sector. National Professional Qualifications (NPQs) should also be promoted more widely to increase uptake, including with Private, Voluntary and Independent (PVI) settings. We also recommend that the Government works to develop their outreach and communication channels with the early years sector to ensure that their voices are heard in the years to come.

Staff development and promotions in Early Years settings should be met with higher pay. We recommend the Government consider how best to incentivise and fund settings to do this, for example by setting standards for staff pay as a condition for receiving funding for the 30-hours entitlement. (Paragraph 155) Special Educational Needs and Disabilities

It is widely recognised that effective early intervention and support is vital for improving outcomes for children with Special Educational Needs and Disabilities (SEND). We are glad to see the Government’s renewed focus on early years training for SEND through SENCOs and its proposals to include SEND in the Early Years Educator Level 3 qualification. The Government’s focus on cross-departmental working in the 2023 Special Educational Needs and Disabilities and Alternative Provision Improvement plan is also welcome, as this will be vital for effective implementation.

Equipping all ECEC practitioners with the skills to identify and support Special Educational Needs (SEN) would help settings better identify and support children with lower level SEND in-house and reduce the number of applications for diagnosis or additional support through an Education Health and Care (EHC) plan, or a speech and language assessment. This in turn would reduce waiting times for those children who do require an such additional support.

It is clearly inadequate for only staff with Level 3 qualifications in Early Childhood Education and Care (ECEC) to be trained in identifying and supporting Special Educational Needs and Disabilities. There are many other staff involved in a child’s care that could benefit from such training. Therefore, training for ECEC practitioners in identifying and managing SEND, including Speech and Language, Learning Disabilities and Autism, should be part of the mandatory training requirements set out in the Early Years Foundation Stage (EYFS) Statutory Framework. We call on the Government to amend the Framework as soon as practical.

We recommend the Government work with local authorities to address the huge delays in Early Years SEN Inclusion Fund (SENIF) funding by reviewing the application process for providers. Similar approaches to the Education Health and Care Plan reforms should be considered, such as standardising and digitise elements of the Support for childcare and the early years 77 process. We further recommend the Government ensure that SENIFs issue funding that is truly reflective of the cost of delivering specialised care for children with SEN.

We recommend the Government increase the Early Years Pupil Premium (EYPP) to match that in primary schools and widen the eligibility criteria so that more children from very low income families can access much needed extra support for any special educational needs. (Paragraph 183) 78 Support for childcare and the early years