1. Following the introduction of the 30-hour childcare entitlement, Tax-Free Childcare, and Universal Credit, we expect a two parent family on the national living wage and earning £19,000 per year to receive 20 per cent less childcare subsidy for a child aged 3 or 4 years than a two parent family with annual earnings of £100,000, meaning that those on higher incomes are the main beneficiaries.
2. The lower receipt of childcare subsidy amongst low income families is partly due to the fact that around 85 per cent, over two million parents, do not claim the childcare element of Working Tax Credit despite being potentially eligible. It is not clear whether Universal Credit will lead to significant behaviour change. Current causes of low claims include:
- low income parents being unable to pay the 30% contribution required under the childcare element of Working Tax Credit; and
- complexity of the system.
3. Childcare under the current 15-hour entitlement does not automatically offer the high level of quality that would be required for the disadvantage attainment gap to be substantially reduced.
- Analysis of the roll-out of the universal childcare entitlement in the early 2000s demonstrates that simply extending childcare hours, and not quality, did not have a long-term impact on child outcomes or narrow the attainment gap.
- This is explained by expansion taking place in lower quality settings
4. Extending the entitlement to 30 hours per week for working families is therefore likely to exacerbate the current strain on quality. The national average funding rates announced in November 2015 do not indicate that sums will be sufficient to allow for investment in raising quality through substantial workforce development. The effects of this apply both to children who are eligible for the 30-hour entitlement and those who are not.
5. The policy also risks access to early education for the most disadvantaged children. Not only do children of parents on low incomes not qualify for the entitlement, but there is a danger that greater competition for places could result in these children struggling to access even their core entitlement to 15 hours per week of early education.
6. We also find little evidence to support the Government’s claim that the 30-hour entitlement policy will substantially improve maternal employment rates. Instead, extending free entitlement is likely to carry a considerable level of ‘deadweight’ as existing childcare arrangements are simply replaced by government-funded provision.
Julia Margo, Chief Executive at the Family and Childcare Trust, said:
“The Government’s additional childcare investment is set to have a really positive impact on working families battling with high childcare bills. However, as this report shows, the extension of free early education alone is not a silver bullet for hard pressed families. Even with increased subsidies, low income families will struggle to meet their childcare costs and children not eligible for the 30 hours will miss out on its educational benefits.
“Childcare is an essential part of our national infrastructure, boosting children’s learning and enabling parents to work. We would encourage government to take note of these findings in order to continue to progress their childcare policy to best serve all families.”
David Laws, CentreForum Executive Chairman, said:
“Our latest report, ‘Widening the gap?’, considers whether the new 30-hour childcare entitlement will support social mobility, or have unintended and damaging consequences. This is timely given the focus of life chances in the Queen’s Speech last week.
“The findings are worrying. The system shouldn’t be designed in a way that means a two parent family earning £19,000 could receive 20% less than a similar family with annual earnings of £100,000.
“The Government needs to look at the childcare support for low earners to make sure the system is uncomplicated, fair and progressive. Disadvantaged children should not be squeezed out of the best childcare settings.”
Dr Eva Lloyd, OBE, Professor of Early Childhood at the University of East London, commented:
“CentreForum’s report on the potential implications of the 2017 extension to free early education and childcare makes an important contribution to the debate on achieving equitable access to high quality early years provision as a right for all children.
“CentreForum’s analysis of the evidence suggests that if this policy were to fail, this could prove a major set-back for the Government’s efforts to close the educational gap between children from higher and lower socio-economic backgrounds.”
Rebecca Johnes, author of the Report and education Researcher at CentreForum, said:
“The disadvantage gap in attainment appears very early in a child’s life and already stands at over 4 months at age 5.
“We know what an important role Early Years education can play in addressing the disadvantage gap, making it vital that the 30-hour entitlement is implemented carefully and, most importantly, fairly. There is a real danger that the policy, as it stands, will benefit those on higher incomes, rather than children that most need high quality early education.”