EXCLUSIVE In Focus: 30 hours: the hidden cost

Monday, November 12, 2018

What price are the most vulnerable children paying for the Government’s flagship childcare policy? Our FOI investigation reveals that nearly a fifth of councils have cut nursery places in the past year or are currently doing so.

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  • 27 bespoke schemes targeted at disadvantaged children aged birth to five have been/are being cut
  • Of these, 12 are schemes for three- to four-year-olds and 15 are broader schemes for birth to fives
  • 11 of 12 councils cutting three- to four-year-olds schemes and 12 of 15 councils cutting other schemes blame EYNFF, 30 hours or wider budget cuts
  • 16 councils have targeted schemes that aren’t being cut
  • 111 councils have no discretionary schemes.

Thousands of the most disadvantaged children in society are losing out on early education because of the 30 hours policy, a Nursery World investigation reveals.

Discretionary, targeted local authority schemes aimed at boosting life chances for some of the most deprived children in the country are being cut because councils can’t afford them under new funding rules associated with the Government’s flagship ‘30 free hours’ policy. In many cases, these places are being taken up by better-off children, as the 30 hours is only available for parents who work.

Our investigation reveals that councils are being forced to cut bespoke provision for children in receipt of early help or social services interventions, parents on the lowest incomes or children with SEND.

Critics have warned the findings go against the Government’s social mobility and literacy agenda by potentially widening the gap between the rich and poor. Dr Sara Bonetti, associate director of early years at the Education Policy Institute, which has found that disadvantaged five-year-olds are already more than four months behind their more affluent peers, says: ‘We know that high-quality early education is key to closing the gap – yet this newly uncovered data provides additional evidence that the Government’s flagship 30-hour entitlement policy may be working against those from disadvantaged backgrounds.’

An FOI request, which garnered responses from 149 councils, reveals 27 schemes have been cut. All of these offered additional childcare for disadvantaged children aged birth to five. This includes 12 schemes targeted at three- to four-year-olds offering an estimated 15,000 places (see table, overleaf), all of which have been scrapped or reduced in scope since 2017. The reasons given are to meet funding rules associated with the Early Years National Funding Formula (EYNFF), which came in in April 2017 (see box), the 30 funded childcare hours for three- and four-year-olds, which launched in September 2017, and wider budget cuts.

Brent Council, which offered 1,200 full-time nursery places for children meeting free school meals criteria, said, ‘This current scheme [ended] fully in July 2018. The scheme [ended]as there is no provision under the EYNFF for schemes such as this to continue.’ A universal offer for four-year-olds in Islington was cut in 2017 following a 10 per cent reduction in early years funding through the Dedicated Schools Grant (see box).

In Hackney, two schemes based on meeting individual needs and providing subsidised childcare for low-income families of pre-school-aged children were cut to 5 per cent of all originally eligible children in September. This was done to finance the new inclusion fund required under EYNFF rules.

Nottinghamshire axed a scheme giving disabled children aged birth to 24 months access to childcare for the same reason. In Swindon, a childcare scheme for two-year-olds for families in exceptional circumstances, e.g. terminal illness, the travelling community, and domestic abuse victims who wouldn’t qualify for funded childcare, was cut in 2016 because of the need to meet EYNFF criteria.

Schemes with a broader age range are also being cut (see table overleaf for schemes aimed at birth to fives). In Birmingham, 1,814 12-week childcare placements for children aged birth to five with a variety of behavioural or well-being issues are to be completely axed because of budget cuts.

Kitty Stewart, of the London School of Economics and author of the Sutton Trust’s Closing Gaps Earlyreport, says, ‘The picture uncovered by the Nursery World investigation is really worrying. Many of the councils on the list have high concentrations of children living in low-income households. Discretionary provision of longer nursery hours for targeted groups in these areas was a key way in which local authorities attempted to improve children’s life chances. It is a bizarre shift that a council like Islington is no longer able to offer a full-day place to all four-year-olds but only those whose parents are working, and that Hackney and Brent can no longer prioritise children with SEND or those from very low-income households.’

COUNCILS THAT HAVE CUT SCHEMES FOR DISADVANTAGED CHILDREN: CLICK HERE FOR TABLES

SEND

Councils are required to create an inclusion fund under the EYNFF for three- and four-year-olds with emerging SEN who are taking up any number of hours of free entitlement. In some cases, the money from discretionary schemes has not disappeared, but is being redirected through funding rates or the inclusion fund under the EYNFF (which states that 95 per cent of central Government funding must be allocated to settings in a bid to improve hourly funding rates for providers). Wandsworth, for example, says the funds it used for education for children with social services involvement ‘will not be available as it is one of the services reviewed to meet [the] statutory pass through of 95 per cent’.

While settings campaigned for councils to keep less money centrally, thus increasing their hourly rates, Dr Stewart highlights how smaller centralised pots could act as ‘an unwelcome constraint on the ability of local authorities to make the decisions they think are best in the interests of all children in the borough, and is squeezing out some excellent practice’. She says, ‘The requirement to have a small “inclusion fund” will be nowhere near adequate to make up for the lost schemes, which Nursery World’s data shows were benefiting thousands of children across the country.’

Wiltshire Council, which has a scheme for under-threes that is not facing cuts, says settings will need more staff and resources if they are to cater for these children: ‘For some settings, it will be a challenge to be able to include all children whose parents would like their children to attend for 30 hours when the child has a high level of need.’

Eligible for 30 hours?

Some disadvantaged children targeted by these schemes will continue to be eligible for free provision under the 30 hours scheme, but this seems to be the minority. In Tower Hamlets, where 49 per cent of children live below the poverty line, the council estimates that just a quarter of the 4,000 three- to four-year-olds in the borough would be eligible.

Mayor John Biggs has said it is a ‘shame that the Government isn’t extending this support to parents who are actively looking for work too’. Hackney estimates 35 per cent of originally eligible children will be so for 30 hours.

To claim the 30 hours, parents must earn the equivalent of national minimum wage for an average of 16 hours per week. Those who are out of work or in training only qualify for the universal 15. Conversely, each parent in a household can earn up to £99,999 and be eligible.

30 hours – what do councils think?

As part of our investigation, which ran from December 2017 to July 2018, we asked councils to comment on how they thought the 30 hours would impact disadvantaged children. Out of 45 who commented, five councils stated the 30 hours could widen the attainment gap.

City of York Council, which piloted the 30 hours, said ‘City of York is clear that the 30 hours policy is aimed at increasing employment rather than a focus on improving outcomes for young children and it could widen the attainment gap for those families who do not meet the eligibility criteria and will only be entitled to the universal 15 hours. It will be a priority for the local authority to address this challenge and we will take learning from other innovators such as those whose thematic focus is to explore work incentives and parental engagement.’

Sandwell Metropolitan Borough Council said, ‘We are concerned that in a local authority with a high percentage of disadvantaged children, we will find it increasingly difficult to close the attainment gap at the end of the EYFS.’

Barnsley said, ‘The 30 hours is difficult to access for parents who are on zero-hour contracts. Therefore, the scheme obviously benefits the parents with higher incomes.’

The council spokesman added, ‘The 30-hour offer is potentially more attractive [to providers] than the 15-hour offer. We have noted an increase in local providers who are now limiting their offer to a five-hour or full-day session. However, if you are a disadvantaged family who doesn’t work then a five-hour offer from 8am to 1pm may not be suitable if the family has other children to drop off at school at 9am. This could result in the family missing out on up to three hours of their early education entitlement – thereby widening the gap even further.’

A total of 11 councils thought it could have an impact on places for disadvantaged two-year-olds or said they were monitoring this to see if it did.

Croydon said, ‘We believe that the increase in funded places will inevitably reduce the number of places available in the sector and our concern is that provision and capacity for funded twos in particular will decrease. The higher staff ratio and reduced rate for twos make them a less attractive prospect than a three-year-old but equally there may be a reduction in the number of 15-hour three-year-old places which could impact the disadvantaged children, as by definition their parents are not working.’

Westminster said, ‘We are already seeing a reduction in the two-year-olds provision as settings are withdrawing from the offer due to insufficient funding from the Government.’

Redcar Cleveland Borough Council said, ‘As the Ofsted ratios enable private providers to take more three- and four-year-olds than two-year-olds, we are a little concerned that the free places for our most disadvantaged two-year-olds may be converted by them to 30-hour three- and four-year-old places for working families, as they would be more lucrative. However, we have not noticed this shift yet and continue to have a healthy take-up of two-year-old places.’

Eight councils said they were monitoring the impact on disadvantaged children but none had yet been felt.

Richmond and Kingston Councils said, ‘We have not had any displaced two-year-olds entitled to two-year-old funding; all those seeking a place with a childcare provider within Richmond and Kingston have been allocated one.’

Ten councils made overall positive comments about 30 hours and its impact on parents.

Rutland County Council said, ‘It is thought that the 30 hours will have a very positive impact on increasing the amount of disposable income for our families that we categorise to be in “working poverty”.’

Despite the cuts to its programmes, Birmingham City Council said, ‘We view the 30-hour offer as a potential opportunity for parents of disadvantaged children as the offer supports parents getting back into work or increasing existing hours at work.’

Waltham Forest said the policy was ‘making childcare affordable’, would result in an ‘increase in children being ready for school’ and was an ‘opportunity to narrow the gap of attainment’.

Southend-on-Sea Borough Council said, ‘We have one in four children living in poverty and see this policy as a way for parents of three- to four-year-olds wishing to return to work to help break this cycle.’

Hartlepool Borough Council said it felt the 30 hours would help make settings ‘more sustainable’.

And Barnsley added, ‘On a positive note, the 30 hours may encourage more disadvantaged parents to return to work, although if a parent secures a job on 12 January, they will have to wait until after Easter to access the additional funded hours. This is something that needs addressing by Government as it remains a barrier to returning to work.’

Barking and Dagenham, along with Reading and Peterborough, didn’t feel the scheme would have any impact on disadvantaged children: ‘We do not foresee the policy having an impact on the most disadvantaged children as this offer is for working parents,’ said a spokesperson for the London borough.

A Department for Education spokesperson said, ‘Thousands of families have benefited from this Government’s high-quality early education programmes – every three- and four-year-old is entitled to 15 hours of free childcare, and that doubles for children of working parents.

‘Alongside this we are providing additional support at an earlier stage for the most disadvantaged families – helping [children] develop social skills and preparing them for school.’

He added, ‘Through our Early Years National Funding Formula we have increased the total national average hourly funding rate to local authorities for three- and four-year-olds from £4.56 to nearly £5, and increased funding for every local authority to provide support for two-year-olds.’

The wider context

Childcare Minister Nadhim Zahawi told the Education Select Committee in March he will look at the effects of the 30 hours policy on disadvantaged children. So what is the evidence so far?

The DfE points to its most recent 30 hours evaluation to illustrate that families are benefiting: over a quarter of mothers said they had increased their hours, and more than one in ten (15 per cent) stated they would not be working without the extended hours. ‘These effects were stronger for lower-income families,’ a spokesman said. It is also investing £72m in the early years under its social mobility agenda, including £50m for more quality school-based provision for disadvantaged children.

Yet various organisations have voiced concerns that the 30 hours runs contrary to this, redistributing resources away from low-income families who often don’t qualify for the scheme. A London Councils survey of London boroughs found 11 (out of 26 respondents) had provided ten to 35 additional hours on top of the universal entitlement for a targeted group of children. As a result of the introduction of the 30 hours and the budgetary pressures on councils, only one of these 11 will be able to continue offering this provision in the long term, and two are not sure. Most councils thought just a quarter of children previously receiving this provision would be eligible for 30 hours.

Early Education told the Treasury Select Committee, ‘Schools report seeing the gap widen, and being unable to support the most vulnerable families. Consideration should be given to whether the 30 hours entitlement should be open to more – or perhaps all –children, and if necessary whether fewer families at the upper end of the earnings threshold should qualify.’

The committee has since recommended the Government remove age restrictions for parents in training and include training courses that individuals or companies finance themselves within the eligibility criteria.

The DfE’s own data has found that parents claiming the 30 hours are likely to be relatively well-off. According to the first 30 hours evaluation, just 10 per cent of families taking up the offer were on annual incomes of below £15.6K. While all qualifying parents are better off from the policy, analysis by the Resolution Foundation for Nursery World found that the richest save the most. A minimum wage household with one parent on full- and one on part-time hours saves around £260 a year – compared with the £5,000 per year saving made by the families who spend most on childcare.

When it comes to two-year-olds, the DfE’s most recent 30 hours evaluation found an average decrease of 0.2 funded two-year-old places per provider delivering the extended hours. Separate DfE-commissioned research found the scheme would affect two-year-olds’ places, with councils typically ‘experiencing greater difficulties achieving sufficiency for two-year-olds than three- and four-year-olds’. This was attributed to the higher cost of providing care for this age group because of the need for lower staff-child ratios. And less than half of councils (47 per cent) said they were able to provide places for all eligible two-year-olds in their area, according to the Family and Childcare Trust (the figure for three- and four-year-olds was 64 per cent).

There is also evidence that SEND support is decreasing, especially 1:1 help, and inclusion pots are not enough to cover this. The DfE’s evaluation found a decrease in SEND support from councils, both in terms of funding and specialist staff (such as speech and language therapists) to support children. Providers believed the extended offer was adding to these pressures primarily because LAs had not increased SEND funding in line with the number of funded hours. In a sample of 12 councils, just 3 per cent of children using extended hours had SEN.

Ceeda data from October shows there are fewer nursery places per head in the most deprived areas. Meanwhile, the number of places in the richest areas has increased.

The DSG and the EYNFF

The Dedicated Schools Grant contains three core blocks of funding: a schools block, a ‘high needs’ block for children who need support with, usually, high levels of need, and an early years block. The early years block contains three- and four-year-old funding for both the universal 15 hours and the extra 15 hours – both of which are distributed via the EYNFF. It also contains the two-year-old free entitlement, distributed via a different formula, and other funds such as the Early Years Pupil Premium. Under EYNFF rules, 95 per cent of the three- and four-year-old funding must be passed through to providers in the form of hourly rates.

KEY FOR TABLES

EEE = Early Education Entitlement

FSM = free school meals

EHA = Early Help Assessment

CNP = Complex Needs Plan

CPP = Child Protection Plan

LACP = Local Authority Care Plan

CiN = Children in Need

SGO = Special Guardianship Order

TAC = Team around the Child

FT = Full-time

PT = Part-time

Note: tables show just schemes that have seen cuts. A few of these councils have other relevant schemes which are not listed here because they are not being cut, e.g. Islington, Westminster and Nottinghamshire.

A proportion of the children originally eligible for these schemes will be eligible for 30 hours; in Hackney this is an estimated 35 per cent.

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