LBP0057

Written evidence submitted by the Professional Association for Childcare and Early Years

Education Select Committee – written evidence

Left behind white pupils from disadvantaged backgrounds

December 2020

The importance of early years education and its role in social mobility

Already by the age of three, children from poorer backgrounds could on average be as much as a year behind their more advantaged peers.[1]

The attainment gap widens by the time children enter school. Less than half of the poorest four-year-olds in England are ready for school, compared to almost two-thirds of other children.[2] 13% of children beginning school have failed to meet half of their expected development indicators on the Early Years Foundation Stage Profile. On average, 40% of the overall development gap between disadvantaged 16-year-olds and their peers has already emerged by the age of five[3].

By the end of reception year, there is gap of 18 per cent between the attainment of disadvantaged children and their better-off counterparts, which persists for years.[4]

By age 16, disadvantaged children are 18 months behind their peers.

However, it is estimated that children who start to attend an early years setting before turning three make approximately six additional months’ progress compared to those who start a year later.[5] The impact of high-quality early years provision is particularly positive for children from low-income families.

Although there is limited evidence around EYFSP attainment there is evidence that white working class boys have lower GCSE attainment that their counterparts:

24.6% of White British boys eligible for free school meals achieved 5 GCSEs A*-C, compared to a national average of 58.8%, and 40.3% of Black boys in receipt of free school meals[6].

The government-funded Effective Pre-school, Primary and Secondary Education (EPPSE) study has been following a cohort of children since 1997, when they were three- or four-years-old and attending a group pre-school setting. The study’s flagship report found that children who attended pre-school made better progress by the end of KS1 than those that did not, and the higher quality the setting, the more progress they made.[7] Later reports[8] have found that the positive effects of early education can also be seen in the results of students’ GCSEs and A-levels, with students who attended any pre-school more likely to take AS-level exams than those who had not, particularly if their pre-school had been high quality.[9]

Since 2014, the Study of Early Education and Development (SEED), has been following 8,000 disadvantaged two-year-olds taking up funded early education places from across England.[10] The aim is to look at the impact of funded early education on children’s outcomes, and better understand the components of high quality childcare provision. The study found clear evidence that two- and three-year-olds benefit from both formal and informal early education and care, with those from disadvantaged backgrounds likely to benefit even more.[11] It has also found that improvements in child development at age three and four due to high quality early education and care can potentially save government money in the long run due to reduced Special Educational Needs (SEN), truancy, school exclusion, crime, smoking and depression and from improved employment rates and earnings.[12]

However, take-up of childcare funding entitlements, designed to improve access to early education, is lower than would be expected, and disadvantaged pre-school children are less likely to be in formal provision than their more advantaged counterparts.

A substantial proportion of two-year-olds (42% of the most disadvantaged and 46% of moderately disadvantaged children) either receive no childcare at all in term time or receive childcare from providers who were not eligible to offer funded hours (e.g. informal childcare providers). The SEED study has found a strong association between mothers’ level of educational attainment and family use of formal childcare. Mothers with no or low formal qualifications are the least likely to use formal childcare, and mothers with degrees are the most likely to use formal childcare.[13]

The most frequently cited reason for not taking up the two year old entitlement is parental preference,[14] and those on the lowest incomes are most likely to say that mothers of pre-school children should stay at home.[15]

Moreover, disadvantaged families are less likely to be well informed about childcare, and more likely to receive information via organisations such as JobCentres and word of mouth.[16] Nearly a quarter of parents of eligible two-year-olds are not aware of their entitlement.[17] Parents in disadvantaged areas are also more likely to have concerns about childcare quality.[18]

Specifically, surveys have found that disadvantaged families feel they lack information on cost, availability and quality of childcare. This seems to contribute to parents’ apprehensiveness and mistrust of formal childcare providers.[19]

Research commissioned by the Social Mobility and Child Poverty Commission found that parents from higher social groups (ABC1) were more likely to be aware of the support available to help with childcare costs than parents from more disadvantaged groups (C2DE) - 56% compared to 47%). Over half (53%) of C2DE parents either had no idea that there was any help available at all, or they knew there was something, but did not know how to access it.[20]

Early years funding

Total £4.63billion

1. Based on DSG 20-21 allocations as of April 2020
2 As at January 2020
3 40.5% of families receiving childcare element of CTC are in England and have at least one child under 5 (source: Family Resources Survey 2018/19) applied to number of families benefiting (source: Child and Working tax credits statistics 2017/18)
4 Data taken from Stat Xplore as at February 2020, in England
5 IFS estimate in 2019 https://www.ifs.org.uk/uploads/BN258-Early-education-and-childcare-spending.pdf multiplied by proportion of families reporting receiving childcare vouchers in England that have at least one child aged under 5 (69.3%- Source Family Resources Survey 2018/19)
6 90.8% of children aged under 5 with a used childcare account are in England (source: Family Resources Survey 2018/19). Proportion applied to number of 0-4 year olds with an open account at March 2020 (source: https://www.gov.uk/government/statistics/tax-free-childcare-statistics-march-2020). Government top up assumed to be distributed pro-rata.

What are the sector’s demographics in terms of both workforce and parental use of childcare and what challenges does this present?

In 2018, 7.4 per cent of childcare workers were male, with the proportion being lower for nursery nurses and assistants (1.8 per cent), and childminders and those in related occupations (4 per cent). By contrast, 26.7 per cent of teaching workers and 13.7 per cent of hairdressers and beauticians are male.

It is widely known that the childcare workforce is female dominated. In 2018, only 7.4 per cent of the workers were men - up from 5.3 per cent in 2013 - but there are again significant differences across individual occupations. Only 1.8 per cent of nursery nurses and assistants, and four per cent of childminders and people in related occupations are male, while 13 per cent of playworkers, 9.1 per cent of teaching assistants and 13.2 per cent of educational support assistants are male. Between 2013 and 2018, the proportion of male workers has increased in each occupation except for nursery nurses and assistants.

Childcare workers are, and have traditionally been, mostly white (86.9 per cent in 2018 v 91.3 per cent in 2013). Similarly, more than 84 per cent of the childcare workforce was born in England, a slight decrease from 86.1 per cent 2013, while 1.9 per cent was born in other parts of the UK versus 2.8 per cent in 2013. Diversity by nationality seems to have increased in the past few years. In 2018, 6.2 per cent of the childcare workforce was born in a different European Union country[21].

Impact of Covid-19 and future sustainability

What are the main challenges facing providers prior to C19 and what has been government’s response?

The Covid-19 pandemic has shone a stark light on the already threadbare financial existence of the childcare and early years sector. The prolonged absence of any long term government strategy for children and young people has left the sector dependent on a hand to mouth existence, with a poorly paid, poorly qualified and poorly valued workforce.

The lockdown period is likely to have significantly damaged the finances of many childcare providers with income from parent fees. Under the pessimistic assumption that all fee income from parents dried up, IFS estimate that a quarter of private nurseries might have been operating at a significant deficit (with more than £5 of costs for every £4 of income). This compares to 11% of providers pre-crisis. Even if providers were able to retain 15% of their pre-crisis fee income, one in five are still likely to have run a significant deficit during lockdown[22].

Childminders, who are mostly self-employed, have also been badly hit by the crisis. Even if all childminders received self-employment grants, the total loss of parent fees could see an additional almost 30% of childminders now earning less than £4 of income for every £5 of costs (counting what they usually pay themselves in the costs). In practice, many childminders will see their earnings take a hit, which could jeopardise their ability or desire to stay in the market[23].

What evidence do you have of settings closing and long term sustainability issues?

A report by the Sutton Trust highlights some of the impacts which COVID-19 have had on settings, and particularly the impact it is having on those settings in the most deprived areas.

1. Providers in the most deprived areas were more than twice as likely to have needed a business rates holiday compared to the least deprived (35% compared to 16%).
2. They were also almost twice as likely to have availed of small business grant funding (18% v 10%). 
3. As a result, a third of settings (34%) in the most deprived areas reported they were unlikely to still be operating next year, compared to 24% of those in the least deprived areas.
4. 69% of settings anticipated operating at a loss over the last six month of 2020.
5. 42% of settings in the most deprived areas reported that they may need to make redundancies as a consequence, and 31% of settings as a whole.

Two thirds (67%) of providers in the PVI sector reported being temporarily closed during lockdown, including 79% of pre-schools, 59% of nurseries and 41% of childminders.

Providers identifying themselves as nurseries in general appear to have suffered greater financial difficulty than pre-schools.

Many providers reported they needed additional support which they couldn’t access, in particular after April’s clarification by government, despite original advice, that staff could only be furloughed for time not covered by government-funded childcare places[24].

The funding challenges

The current funding formula for early years education and childcare is not working. It is a complex, bureaucratic mesh of offers and schemes that are not fully utilised and do not serve their purpose. For example, we know that despite its good intentions not enough of the 2 year old offer is taken up. Likewise, the tax-free childcare is an ineffective intervention. The latest statistics from HMRC show that just one in six eligible families are using a tax-free childcare account, with just 204,950 families accessing the offer - compared to the 1.3 million estimated to be eligible for the offer[25].

The free hours entitlement only accounts for a proportion of settings income. Many families combine free hours and additional paid-for hours, and the sector has long argued that the free hours entitlement does not reflect their real running costs. Therefore, the lack of required investment from government leads to increased private fees. Such fees have risen three times faster than wages since 2008 and over a quarter of parents are finding it very difficult to meet their childcare costs[26].

Furthermore, free hours funding schemes are attached to families’ employment status,

which is likely to change, making financial planning extremely difficult. If further

outbreaks occur, temporary closures will be required and this will bring further financial

pressure and furthers the risk of closures across the sector with severe short and long-term effects.

It’s estimated that 69 per cent of providers anticipate running at a loss for at least the rest of this year which is clearly not financially sustainable. It is also likely that those providers based in poorer areas will be hardest hit[27].

The early years sector therefore needs an urgent repurposing of existing government support schemes, coupled with a substantial increase in investment. The free hours entitlements should be replaced with a larger direct payment enabling all Ofsted-registered providers to retain their staff (on a living wage), meet essential overheads and deliver high quality childcare where it is most needed. The fund will ensure that children's places are protected, regardless of income, and there is continuity of care during the coming months and possibly years of uncertainty. If we are serious about the value of early years education and the outcomes for children, there is a compelling case for this fully funded universal pre-school provision for all children.

Possible future model

It is self-evident that in addition to having a significant impact on children’s outcomes, childcare can also bring substantial benefits for the wider family. It enables parents, particularly mothers, to be in paid employment, providing additional income for the household. International research has found that that years education and childcare provision is a key factor driving the lower maternal employment rate in the UK compared to its OECD counterparts.[28]

Mothers with children aged four years or under have the lowest employment rates in England (in contrast, employment rates for fathers are relatively unaffected by the age of their youngest dependent child).[29]

Families where parents work have a significantly lower risk of child poverty, which also adversely affects child welfare and outcomes.[30] Mothers with pre-school children who are able to work are less affected by the so-called ‘motherhood penalty’, and are more likely to have higher lifelong earnings.[31] Mothers in employment also report higher levels of well-being and lower levels of depression.[32]

Just over half (52%) of non-working mothers said that if they could arrange good quality childcare which was convenient, reliable and affordable, they would prefer to go out to work.[33]

The SEED study[34] also found that different setting types tend to produce specific benefits. For example, childminders were found to have a particularly positive impact on young children’s cognitive development, and verbal ability in particular. Children attending a childminding setting were also found to have fewer emotional symptoms (such as anxiety and stress), and more behavioural self-regulation. Group settings were associated with more prosocial behaviour, such as sharing and showing empathy, and fewer peer problems and emotional symptoms. See E. Melhuish, J. Gardiner & S. Morris (2017).

There is no doubt that effective, properly resourced early education and childcare has a positive impact on children and can play a particular role for those that are disadvantaged. However, the dominant association of childcare with parents’ employment is leading to many missed opportunities. Rather, we would like to see the value of early education and care promoted in its own right (regardless of parental need). Reform of the funding system, to produce a clearer universal offer, targeted to disadvantage areas would go some way to giving those children at serious risk of falling behind, including white disadvantaged children, a better start in life.

December 2020