MSA Chairmans blog on Public Accounts Committee report

By Dr. Martin Bradley

The House of Commons Public Accounts Committee yesterday published a report on the entitlement to free early years education and childcare (http://www.parliament.uk/business/public-accounts-committee/report/entitlement-to-free-early years-education-and childcare). It notes that 94 per cent  of three year-olds and 99 per cent  of four year-olds take up the current free places, whilst only 58 per cent  of disadvantaged two year-olds take up their places. In 2015-16 £2.7 billion was given to local authorities for these places which were used by 1.5 million children.

The reports conclusions are very much in line with MSAs view, although its capacity to effect change is very limited. It begins with the stark warning that ‘There may be not enough providers willing to provide the additional 15 hours of free childcare being introduced in September 2017’. Private,  Voluntary  and Independent (PVI) settings are cited as needing to charge for hours beyond the initial 15 to break even, and schools and maintained nurseries operate fixed morning and afternoon sessions and so are unlikely to be in a position to offer additional hours. The report does not mention that many PVI providers in rented accommodation do not have the capacity to offer more hours as their premises are used for other purposes during afternoons or other parts of the day. The Committee recommends that the pilot areas be used to test providers capacity to meet the anticipated demand for additional hours and to assess how feasible it is for providers to operate with the new funding rates. Most importantly, the DfE should report to the Public Accounts Committee how it plans to evaluate the pilots and implement any changes before the full roll-out in September 2017. While this is sensible, I doubt its feasibility, given the time scales and the need to set funding rates well before the scheme starts.

The Public Accounts Committee makes the damning comment that the DfE has no mechanisms for identifying whether local authorities are ‘managing their childcare markets effectively or to intervene if needed’. Local authorities devise their own formulae to allocate funding and can top-slice the money to fund central services. Hourly funding rates vary from £2.28 (in Harrow) to £7.15 (in Westminster), and top slicing accounts for between 0 to 34 per cent. While there is no evidence that providers are ceasing to operate in great numbers, DfE has no means of quickly intervening should they do so if the funding entitlement adversely affects their viability. The Committee recommends that DfE should set out how it will oversee the local authorities role in ensuring that there are sufficient places. This has a number of implications: it identifies that local authorities are under great pressure to find places for the additional 15 hourswhich means likely pressure from them on providers to offer the places. Secondly it means that DfE is being pushed to adopt a much more interventionist role in local provision at a time when government policy is to move away from centralised intervention of this sort. I very much doubt that DfE has the capacity to intervene at a local level, not least as this would require a significant increase in the number of civil servants (and the corresponding cost of such an increase) to monitor and intervene locally.

Parents reported to the Committee that they were only offered the current 15 hours free places if they agreed to pay for some additional hours. DfE and Gingerbread gave evidence saying that this was an issue, with the former noting that it was contrary to DfE statutory guidance. DfE is instructed to report back to the Committee on the scale of this problem and to remind all local authorities that additional paid-for hours are not a condition of providing the current free places.

There are ‘unacceptable variations’ in the amount of information available to parents on access to free childcareonly about 30 per cent  of parents are aware of the Family Information Service locally. Again DfE is instructed to write to local authorities to remind them of their duty to provide accessible information. This must include information on complaints procedures.

DfE is also criticised for not having ‘robust plans’ to ensure that there are sufficient qualified Early Years (EY) staff. Graduate level recruitment has raised quality and increased professionalization in the sector, but graduate level applications are declining. The new EY initial teacher training programme reached 97% of its target in September 2013, but this fell to 41% the following year. The report notes providers concerns about the impact of the National Living Wage in the near future when the Governments funding rates are set until 2019-20 and based on costs in 2014-15. ‘The Department (DfE) does not have a workforce plan for the early years sector’ is a dry comment, but the twin issues of graduate recruitment and staff costs are not properly linked in my view. This structural point affecting all provisions viability is effectively ducked by the Committee. Its recommendation that DfE should report to the Committee by September 2016 on how it will make sure that there are enough people with the right skills to work in the sector, is weak and any report will not be in time to affect the situation before September 2017.

The final comment is that the DfE lacks sufficient data to measure the impact of free childcare. The most recent evaluations are based on children who started early education in 1997. Some research on the impact on two year- olds is due to be published in 2022, but here is no on-going routine gathering of data. The Early Years Profile is no longer compulsory and baseline assessment in reception classes was dropped this year, leaving no nationally collected data on childrens learning and development. Again the Committees response is to require the DfE to report back by September 2016 on how it will measure value for money of the current 15 hours and the additional entitlement. DfE ‘should consider tracking children from pre-school childcare onwards’. This last point is one which many researchers have long advocated, with children being given an exclusive number (some have suggested a unique bar coded system) enabling all sorts of information to be gathered. This would not only include childcare but also health, residence and family status information. To me, this is too much like a Big Brother system which many would resist and try to opt out of. Another aspect of looking at value for money is the intended purpose of the funding. While the current 15 hours are clearly aimed at childcare and education, the additional 15 hours were defined by the minister during the House of Commons debate as a work incentive for parents, not just aimed at improving childrens life chances.

The Committees evidence is at times dated. Thus it refers to the rise in settings rated as good or outstanding by Ofsted from 68 per cent  in 2010 to 85 per cent  in 2015before the new Common Inspection Framework was introduced. My strong suspicion is that the percentage has fallen since then. The switch to Ofsted being the ‘sole arbiter of quality’ in 2014, removing any QA role from local authorities is seen as reducing the burden on providersbut our experience indicates that some LAs still feel that they have such a role.

The report fails to address the fundamental conflict within childcare whereby some provision which is fully state funded for schools and classes can be directly managed either centrally or locally. But the majority of provision is in the private sector and cannot be managed in the same way. Funded places give the Government some control over private provision, but ultimately the decision on accepting the funding and the consequent conditions or operation is up to each provider. There is a clear fear at DfE that providers may not offer the additional funded hoursand there seems to be no plan B as national roll out in September 2017 gets ever nearer.

The extent to which the system is not controlled by DfE is evident in the importance it attaches to childminding provision, but it is not able to stem the fall in numbers of childminders. The issue of how to meet the needs of parents who work in shifts, or who start work early or late is not really addressed, but again childminders are seen as a possible solution. Similarly DfE is developing a new formula for the funding to address issues of top-slicing and varying rates, but this still leaves providers with uncertaintiesincluding the frequency of payments and variations in interpretation of DfE regulations. All told, the system is a mess however it is considered.

Overall, the Public Accounts Committee has identified a number of core issues. It rightly argues for a considered approach to developing policy, but time is against such a move. The Government has adopted the policy for additional hours, and other policies such as the National Living Wage and raising qualification expectations are in place and are having an impact on providers. DfE is not in a position to oversee the whole childcare and education scene or to act where problems occur. The unidentified elephant in the room is finance: how much the additional hours will cost and whether they can be afforded by the Government. Taken as a whole the Committee report does not advance the debate very much, but it does reinforce MSAs view that wait and see is the best approach. We will need to know by June 2017 at the very latest how much funding will be available for the additional hours and whether it will be enough to persuade providers to join the scheme in sufficient number.MSA will continue to monitor developments and aim to keep you updated.

Dr Martin Bradley

MSA Chairman