This article was written by Ark CEO Lucy Heller, originally published on the Financial Times on Saturday 9 December 2023.
Over the past year, thanks to the state of public finances, the government has only been able to make one big new spending commitment to education: an additional £4bn annually to expand free childcare to one- and two-year-olds whose parents are in work. Which makes it all the more surprising that ministers barely ever talk about it — Prime Minister Rishi Sunak devoted five words to the topic in his party conference speech.
But we do need to talk about it because there is a real risk that this investment, which could be of such value to hard-pressed families, will not be used in the most effective way.
There are two big problems. The first is a philosophical one. The government has seen this expansion almost entirely in terms of the economic benefit of enabling more parents to enter the labour market. This is important but a “childcare” policy — note the terminology — could deliver so much more for society in the long term if it also sought to bring the best of what we know about early education to more children. Quality matters as much as letting parents leave the home environment.
The single biggest flaw in the policy as it stands is that it excludes children who don’t have both parents in work, even though they would benefit the most from high-quality nursery provision. This is also true of the existing 30 free hours for three- and four-year-olds, only 15 of which can be accessed by parents not in work.
This approach is not just unfair; it increases the already substantial educational disadvantage gap between children from different backgrounds at the start of school. The Education Policy Institute think-tank found that by five, pupils from lower-income families were 4.8 months behind their peers in 2022, up from 4.2 months in 2019 and its highest level since 2014.
The lack of interest from ministers in the educational benefits of nursery is particularly frustrating because, until 2015, there was cross-party consensus that reducing this gap was a key goal of early years policy. When Labour introduced free hours for three- and four-years-olds it was for all children. Equally, when the coalition government extended the scheme to offer 15 hours of free childcare to two-year-olds it was specifically for those from lower-income families. But this is now forgotten.
One of the reasons our early years system is so incoherent is the contradiction between these different policies, all of which are still in place.
But the second problem is structural. There is nothing stopping the government offering free hours to all children but it is harder for it to improve the quality in the sector because it has so little control over early years providers. Most, particularly for children under three, are private companies and charities. Naturally, private providers are more likely to set up in areas that will help them balance the books or even turn a profit, with wealthier parents who can buy additional time, at higher rates, on top of free hours. This has left lower-income areas without enough good places.
At Ark we advocate support for alternatives to the private sector. That could involve the government allowing local authorities to set up their own provision, or funding the development of non-profit groups as it does for school trusts. Our Ark Start nurseries educate and care for under-fives in some of the most deprived parts of south London. But because we can supplement our fee income and government funding with philanthropic support, we can offer high-quality education as well as childcare to the pupils who benefit from it most. If the government were committed to closing the gap for school starters, it could back many more projects like ours, providing premises and boosting funding rates.
Unsubsidised providers will inevitably struggle to offer good-quality early education because government funding has not increased in line with costs during a period of rapid inflation. Staff tend to be paid at minimum wage level and are likely to be underqualified. Labour market pressure has led to serious shortages: supermarket and delivery jobs pay more. This risks the government’s ability even to meet its promise to offer free places to one- and two-year-olds, let alone make them high-quality ones. In some parts of the country, there may simply not be enough places to meet demand.
As a cost-cutting measure, the government has also reduced staff-child ratios in nurseries. But this can only be at the expense of quality, making life for existing staff even less attractive. Instead, this government — or the next — needs to take full advantage of this big one-off intervention in childcare to ensure maximum benefit. We have an opportunity over the next few years, if the sector grows, to transform what we offer to those families that need it most. It would be criminal to let it slip through our grasp.