Thirty-hour funded childcare benefits more advantaged families

Evidence from the Sutton Trust suggests government’s policy of 30 hours of funded childcare for working parents has widened the gap between disadvantaged children and their peers, because the majority of families eligible for 30 hours of funded childcare are in the top half of earners, while the poorest families can access just 15 hours.

This is according to report published by the Sutton Trust in partnership with the Sylvia Adams Charitable Trust, which focuses on the early years. This sets out the case for improving access to early education for the poorest children.

All three- and four-year-olds in England are entitled to 15 hours of early education and childcare per week for 38 weeks of the year. Since 2017, children in families where both parents (or the lone parent in a lone-parent family) are working and earning above a certain income level per week are entitled to an additional 15 hours. There is a salary cap for eligibility, but this only comes into effect if either or both parent earns over £100,000, meaning two parents could have a combined income of £199,998 and still be eligible.

As a result, the research has found that the current policy disproportionately benefits more advantaged families: 70% of those eligible for the full 30 hours are in the top half of earners, while just 13% of eligible families are in the bottom third of the income distribution.

There is a wealth of evidence telling us that access to high quality early years education plays a significant role in shaping a young person’s outcomes later in life. But the poorest children are on average 11 months behind their peers when they start at primary school. Evidence from a literature review by the Centre for Research in Early Childhood (CREC) for today’s report suggests this gap has started to widen in recent years which has been exacerbated by the 30 hours policy and the inequality associated with it.

These gaps will only widen as a result of the pandemic. Over half (54%) of primary school leaders surveyed by TeacherTapp for today’s report said fewer pupils were “school ready” when they started reception this year than they would usually expect.

Expanding access to high quality early years education is likely to close gaps before school starts, especially in the aftermath of the pandemic, with the poorest families suffering the most. This access would also help to provide flexibility to parents moving back into employment, retraining, or increasing their hours at work.

The report includes economic modelling by the Institute for Fiscal Studies (IFS) that looks at the costs of reforming the 30 hours policy so that the most disadvantaged three- and four-year-olds have access to the same number of funded hours as their peers. The current 30 hour entitlement costs around £770 million per year, with the universal 15 hour offer for three- and four- year olds costing £2.2 billion. IFS estimates suggest that extending the 30 hour entitlement to cover three- and four-year-olds who had been eligible for the two-year-old entitlement for disadvantaged children, could cost an extra £165 million a year by 2024-25, if hourly funding rates remain frozen in cash terms.

A universal entitlement for all three- and four-year-olds could cost £250 million under a central scenario of take-up rates. These central estimates mean a 9% increase in spending on the 3- and 4-year-old entitlements would extend eligibility for the 30 hour entitlement to 80% of children in the bottom third of the earnings distribution for the first time.

By far the largest group that would benefit from this extension would be those children in the 16% of families with no earnings. Extending eligibility could also reduce regional inequalities in access to the full 30 hours of funded childcare and early education. Proportionately, there are more children in the North East and Yorkshire than in the South East who are currently ineligible for the full 30 hours but who would be brought into eligibility if the criteria were widened.

Today’s report is published as part of the Sutton Trust’s ‘A Fair Start?’ campaign to give poorer children the same access to early years education as their richer peers. The Trust favours making the 30 hours entitlement universal, which would simplify the system and be similar to the system introduced in Scotland this summer.

However, it is important that any expansion, and the additional funding going to providers along with it, drives up quality in early education, which is most likely to improve children’s outcomes and school readiness. To qualify for the extension, the Trust believes that providers should be required to meet certain evidence-based quality criteria, for example employing a graduate leader in their setting, employing a certain proportion of staff qualified to Level 3 (A level or equivalent), and providing professional development opportunities to their workforce.

Sir Peter Lampl, founder and chair of the Sutton Trust and chair of the Education Endowment Foundation, said: “The poorest children start school almost a year behind their peers. This is a truly shocking finding when you consider that the gap between low-income children and their better off peers widens over time.

“We know how important high-quality early education is for young children, yet the poorest three- and four-year-olds are locked out of these opportunities, simply because their parents do not earn enough. This is a national scandal.

“We wouldn’t accept the state providing longer school hours for well-off families, and we shouldn’t accept it in the early years. If we want to make our school system fairer, it needs to begin with giving every child the foundation to succeed at school.

“As the research shows, a small increase in spending (9%) could widen access to early education. But expanding access must go hand in hand with improving quality, which is also key for making a lasting impact on children’s life chances.”

Jane Young, Director the Sylvia Adams Charitable Trust, said: “The Sutton Trust’s excellent and comprehensive report shows in stark relief that the most disadvantaged children in England are being denied a fair start because of national policies which exclude them from the same access to early education as their more advantaged peers.  We cannot allow this situation to continue.

“The problem is clear and the negative outcomes stark, but this report offers workable solutions.  This is not a report to put on a shelf to gather dust; it must be acted upon if we are to give all our children a fair start.”

Neil Leitch, chief executive of the Early Years Alliance, said: “We know that hiqh-quality early years provision can play a huge role in narrowing the gap between disadvantaged children and their wealthier peers, and so clearly there is a strong argument to be made for widening access to the current 30 hours offer.

“However, as this research shows, the majority of nurseries, pre-schools and childminders would only support such changes to the 30-hours policy if they are adequately funded to deliver it. The harsh reality is that for many, any extension of the scheme at current rates of funding is simply unfeasible.

“If the government is genuinely committed to improving the life chances of all children, then clearly it needs to invest in the sector that is proven to have the biggest impact on long-term learning and development: the early years.”