More children to be eligible for funded two-year-old places

The introduction of universal credit, which replaces the current benefit system, means that the Government needs to set similar eligibility criteria for families receiving it, to ensure ‘the early years offer continues to be targeted at those children who can most benefit from it’.

The DfE is seeking views from early years organisations, providers and parents, on the eligibility criteria for the free entitlement for two-year-olds, following the introduction of universal credit.

The consultation proposes setting a net earnings threshold of £15,400, not including any extra income through benefits. It estimates that a typical family earning around £15,400 a year have a total household income of between £24,000 and £32,000 once benefits are taken into account.

The DfE estimates that by applying this eligibility criteria around 8,000 more children would take up the two-year-old places once universal credit is fully rolled out, compared to the number currently receiving it.

The Government intends that this earnings threshold for the two-year-old entitlement comes into effect from 1 April 2018.

Minister for children and families Robert Goodwill said, ‘Expanding access to high-quality early education is essential if we are to give every child the best start in life, which is why we are investing a record amount in childcare – £6 billion by 2020.

‘Our proposals not only ensure that no two-year-old who is already benefiting from the free 15-hour offer loses it, but will give thousands more the chance to benefit, supporting their early development.

‘This is an important issue and it is important that we get this right. We want to hear from families, early years professionals and other experts throughout this consultation so we can identify those children who need our support most.’

The DfE said that as of January 2017 around 160,000 two-year-olds were taking up the offer. Under the proposals, all children who are taking it up already will continue to access it.

A consultation is already underway on proposed changes to the threshold for eligibility for free school meals and the early years pupil premium.

Sector organisations welcomed the news that more disadvantaged children would have access to places, but stressed that the inadequate funding for 30-hour childcare was put nurseries’ sustainability, and the availability of two-year-old places at risk.

Neil Leitch, chief executive of the Pre-school Learning Alliance, said, ‘We have always argued that all children, and especially those from more disadvantaged backgrounds, should have access to quality early year provision, and so a policy change that would result in more two-year-olds being eligible for the funded entitlement - even a relatively small increase of 8,000 - is a positive move in principle.

‘That said, if the Government is going to offer additional two-year-old places, it needs to make sure that those places will actually be available.

‘With the introduction of the 30-hours scheme, there is a real danger that childcare providers struggling to balance the books will opt to reduce the number of two-year-old funded places in order to deliver the extended three- and four-year-old offer. Indeed, a recent Alliance survey found that more than four in 10 providers who planned to deliver the 30 hours were likely to have to reduce the number of places offered to children of other ages as a result of the policy.

‘As such, and especially with this change set to be introduced in the busy summer term, it is vital that the Government funds both schemes adequately to ensure that early years providers have sufficient capacity, staff and resources to deliver places to the growing number of children who need them.’

The National Day Nurseries Association said it would be encouraging its members to respond to the consultation.

Chief executive Purnima Tanuku said, ‘Expanding the two-year-old offer to give more children the best start in life is the right thing to do, especially in the light of the Joseph Rowntree Foundation report launched yesterday.

‘Teachers are already seeing that children who have benefited from the two-year-old 15 hours of funded childcare are starting school ready to learn. A play-based approach to high quality early education is the best way to reduce the widening inequality gap.’

‘Although we welcome this additional investment in childcare, the Government must not forget that the 30 hours scheme for three and four-year-olds is struggling on inadequate funding. As business costs rise and hourly rates stagnant or reduce, nurseries are having to question whether they can continue to offer funded hours at all.

‘Without sustainable early years businesses, none of these schemes will be able to flourish.

NDNA will be responding to this consultation and will encourage our members to do so.’

• Respond to the Government consultation on eligibility for the free early years entitlement for two-year-olds under Universal Credit here

The closing date for responses is 15 January.