Our early years education and childcare system provides a vital service: the care and education of our youngest children, as well as being a tool to enable parents to work. Westminster’s plans to inject billions into the English system mean the taxpayer will have an 80% stake in it by 2025, up from 50% now.
First, while the expansion will lower costs for many parents, it maintains the inadequate funding rates for the 3–4-year-old offer, which has led providers to charge parents more in order to cross-subsidise losses. But just as importantly, by preserving the underlying logic of the system – a lightly regulated market with underfunded subsidies – the changes risk exacerbating existing problems like unaffordable costs, sufficiency gaps, low worker pay and variable quality. This is because simply putting more money into subsidies ignores the dynamics and structure of the market. They are that:
- most providers are privately run, with lax financial regulation, some excess profiteering and risks of sufficiency gaps if precariously financed providers fail
- well-documented issues like variable quality and poor worker pay and conditions will continue without robust and ambitious standards, controls and sufficient funding to ensure they are delivered
- local authorities are unable to manage local markets effectively without the knowledge, resources and powers to do so, which can result in sufficiency gaps and persistently poor-quality provision.
In the main, the expansion will subsidise support for parents already using the system rather than creating new demand, so the Government needs to improve the system we already have rather than rapidly increasing the number of providers within it.
