Autumn statement 2011: sector reaction to rise in two-year-old places and tax credit freezes

The early years sector has given a largely positive response to the Chancellor's announcement to extend the free entitlement to 40 per cent of two-year-olds by 2015.

In his Autumn Statement to MPs Mr Osborne said that he would double the number of places for two-year-olds, so that ‘260,000 children, from the most disadvantaged families would get this support in their early years.

‘Education, early years learning. That is how you change the life chances of our least well off – and genuinely lift children out of poverty,’ he said.

The plan will extend free early education to around 130,000 more two-year-olds.

However, while welcoming the move and the increase in funding of  teh scheme to £380m a year by 2014-15, the Pre-School Learning Alliance said it was concerned that there would be a shortage of nursery places for two-year-olds.

Chief executive Neil Leitch said, ‘Questions remain about the issue of sufficiency and where these 130,000 additional places will come from, given that there is currently a projected shortfall of some 40,000 places for the first tranche of 140,000 children.

‘Early years and childcare providers will be reluctant to create the new places that will be required unless this expansion of early years provision is adequately funded.’

Liz Bayram, joint chief executive of the National Childminding Association, said, ‘Critical to success of this policy will be ensuring these very young children receive a high quality and consistent experience.

‘NCMA is looking forward to working with the Department for Education to help make this a reality for disadvantaged two-year-olds.’

June O’Sullivan, chief executive of the London Early Years Foundation (LEYF), said that the offer to disadvantaged two-year-olds should be linked to children’s centres, and said that she hoped that the Government was clear about what it expected to achieve from the investment, ‘especially at a time when there are so many competing demands from those suffering from the economic downturn.’

She said, ‘We know childcare has multiple benefits, not least by helping parents out of poverty through work as well as the more longer-term benefits to children. Good quality childcare can improve the life chances of small children and reduce the gap between rich and poor children which starts to widen at 22 months.

She added, ‘However, we must engage parents from the outset. It is crucial that what is learnt at nursery is reinforced in the home in order to enrich the home learning experience. Linking it to the children's centre programme needs to be a crucial aspect of the programme.
‘In troubled times taxpayers need to see a real return on their investment. Connecting all the services logically and humanely around the family will lead to a much higher chance of longer and more beneficial outcomes for everyone.’

Anand Shukla, chief executive of the Daycare Trust, said that the expansion of free childcare to 40 per cent of two-year-olds was an important step towards universal provision for all two-year-olds.

‘It is now incumbent on the Government to work with local authorities and childcare providers to ensure that high quality places are available and that parents are supported to access their entitlement.’

'Parents priced out of work'

However, many childcare and family organisations criticised the Chancellor’s decision to freeze the couple and lone parent elements of the Working Tax Credit and the withdrawal of the promised above-inflation increase to the Child Tax Credit.

Mr Shukla said, ‘At a time when family budgets are increasingly squeezed and childcare costs are rising, parents will now be forced to shoulder more of these costs themselves. This risks trapping families on benefits if they find that they are no longer better off in work.

‘Today’s statement focused on increasing investment to encourage growth, yet childcare provision is a key part of this country’s infrastructure and millions of working parents rely on it every day. It is only by supporting families through providing affordable and flexible childcare, as well as offering financial help through the tax credit system, that parents on low and middle income will be able to afford to stay in work. This is essential for economic recovery, as well as for alleviating child poverty.’

Working Families said that the Chancellor had gone back on a promise last year to make significant above indexation increases to the Child Tax credit, and that freezing tax credits would lead to more working families living in poverty or more parents ‘priced out of work’, as childcare became unaffordable.

Chief executive Sarah Jackson said, ‘What he gives with more free childcare for two-year-olds on one hand, he removes with the other by failing to address the rising cost of childcare for working parents.’

Dr Katherine Rake, chief executive of the Family and Parenting Institute, said, ‘We recognise there were some positive announcements for UK families from the Chancellor today. The additional investment in childcare for two-year-olds is certainly to be welcomed.

‘But overall what we have seen is cold comfort for stretched family finances. Much of the increase in the child element of tax credits will be undermined by freezes elsewhere.

‘Parents are already living with the consequences of cuts to state support which they relied on to make family life a bit easier. They have also been facing soaring costs of living. We must now wait to see how these announcements will affect the UK's diverse types of families, and in particular parents' decisions on whether work really does pay.’

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