Background to the report

In March 2023, to increase parents’ participation in the labour market, the Chancellor of the Exchequer announced a significant extension to government-funded entitlements for early years education and childcare in England.

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The expansion is set to be delivered in three stages, to children of working parents who meet salary thresholds:

  • On 1 April 2024, the Department for Education (DfE) extended entitlements to include 15-hours a week for 2-year-olds of eligible working parents
  • From September 2024, DfE will extend this 15-hour entitlement to children over 9-months-old
  • From September 2025, children over 9-months-old will be entitled to access 30 hours per week

Scope of the report

DfE launched the Early Years and Childcare Reform Programme (the Programme) to extend entitlements alongside wraparound childcare for primary-aged school children. This report assesses DfE’s progress and whether it is well-placed to manage value for money risks.

It examines:

  • the background to the early years market and government-funded entitlements
  • DfE’s preparations and progress in extending entitlements
  • our view of the future risks DfE needs to manage to achieve value for money

Video summary

Conclusions

Following the Spring Budget 2023, DfE responded quickly to establish a programme to extend early years entitlements. It had 13 months to start introducing entitlements and, recognising this challenge, staggered its own activities sensibly.

However, despite the importance of providers in delivering the Programme, it could not consult the early years sector given HMT’s usual restrictions when developing budget proposals. This, along with cancelling early testing plans given affordability pressures, creates significant uncertainties around whether the sector can implement the changes and be financially sustainable.

DfE has met its first milestone for the number of codes issued by the end of April and 79% of these have been validated. However, it has assessed its confidence in meeting milestones beyond April 2024 as “problematic”. It must now use available data to understand when it needs to intervene and consider how it will respond to risks should they materialise, particularly given the lack of contingency and flexibility in its fixed, ambitious timetable.

In extending entitlements, the government’s primary aim is to encourage more parents into work. Even if DfE successfully navigates the significant uncertainties, it remains unclear whether the extension will achieve its primary aim, represent value for money and not negatively impact DfE’s wider priorities relating to quality and closing the disadvantaged attainment gap.

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Publication details

Press release

View press release (24 Apr 2024)

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