The low level of funding was the main reason given by providers who chose not to offer the extended hours.
The ‘Evaluation of Early Rollout of 30 hours Free Childcare’, published today by the Department for Education (DfE), was carried out by Frontier Economics, NatCen Social Research and the University of East London.
Published ahead of the national roll-out of the policy tomorrow (1 September), it is based upon a survey of 1,212 providers– more than 70 per cent of all providers in the four early roll-out areas (Dorset, North Yorkshire, Leicestershire and Tower Hamlets), and in-depth interviews/focus groups with 40 parents, 43 providers and 24 local authority staff. The four areas began piloting the 30 hours from April.
It follows and adds to an evaluation of the first eight early implementer areas published in July.
Unlike early implementation, conditions of the early roll-out were fairly similar to how they will be in the national roll-out. The four early roll-out areas were paid the same rate of funding that they will receive under the national roll-out. They were selected to reflect different delivery challenges and local contexts. Also, the time they began piloting the 30 hours, April, is when spare capacity in provision is at its lowest point across the year, whereas early implementation began at the most favourable time of year.
In one local authority in the early roll-out, parents had to apply for places via the Childcare Service, but the system was slightly different than the current one.
While the authors of the evaluation say that early roll-out provided a ‘stronger test’ than the early implementation, they claim there are still limitations on how far lessons can be drawn from the experiences of the four areas. One limitation is that evidence on sufficiency, take-up and impacts were collected in the first two months after the policy began when they say that major policies, like this one, typically take much more time to fully embed.
The latest evaluation shows that 71 per cent of registered providers delivered the extended hours and a further 6 per cent were offering the hours, but did not have any children taking up the places. A further one in ten were planning to offer the extended hours in the future, while 12 per cent of providers were not planning to.
Most of those delivering the extended hours were private, voluntary and independent providers. Just 9 per cent were childminders, who were more likely to be offering, but not delivering the places.
The main reason for those not offering the 30-hour places was the low level of funding. Other reasons related to specific issues with the policy - constraints of resources such as a shortage of staff or venue space, or a lack of demand.
Most of those delivering the extended entitlement were doing so because parents had requested a place (63 per cent) or to support the policy (61 per cent). Other reasons included being encouraged by their local authority to do so (51 per cent) and for the business opportunity it offered (34 per cent).
Providers not offering the extended hours, but planning to do so were either waiting due to a lack of immediate demand, for spaces to become available in September or needed more time to prepare their processes or adjust provision. A small proportion were waiting to see how the policy developed.
The evaluation also showed that for 32 per cent, the 30 hours had increased their costs, while 39 per cent said their profits had decreased.
Private providers were most likely to report an impact on costs. Both private and voluntary providers were most likely to report an impact on profits.
For 32 per cent, the 30 hours had increased their hourly delivery cost per child. This was mainly due to rises in hourly staff pay and adjustments to provision needed to deliver the policy.
The evaluation states that financial impacts may not have been fully captured because some providers may not have had enough time to fully understand the financial implications of delivering the 30 hours. Others were waiting until September to adjust their provision and financial model.
At the start of the summer term in April 2017, just under 10,000 children were receiving the extended hours across the four areas – the equivalent of 72 per cent of the total number estimated to be eligible by the Department for Education.
Most providers (61 per cent) said they offered parents a free choice in when they took the 30 hours, 32 per cent said there was flexibility but within some restrictions, 7 per cent specified the hours be used on certain days or times
A total of 17 per cent of providers introduced or increase charges due to the extended hours. This was mainly to ensure the financial viability of the setting. The most common charge was for meals.
Impact on other provision
The evaluation found no substantial adverse effects on other free entitlement and paid provision. However, as previously reported by Nursery World, one local authority – Tower Hamlets, said it would have to phase out an existing programme offering 10 additional free hours to disadvantaged three and four-year-olds because of the extended entitlement.
Parents taking up the extended entitlement reported that they were planning to increase their working hours from September and the additional help made it worthwhile to remain in full-time work. Others said it reduced the childcare burden on grandparents.
Responding to the findings of the evaluation, Education Secretary Justine Greening said, ‘High-quality childcare not only helps our children get the best start in life, it supports many parents who want or need to work.
‘For too long lots of families really struggled to manage the cost of childcare and that’s why we have delivered on our promise to provide 30 hours free – saving working families around £5,000 a year.
‘Alongside the support we are giving through Tax-Free Childcare and Universal Credit, it will make a real difference to families’ lives.’
Neil Leitch, chief executive of the Pre-school Learning Alliance, said, ‘The findings of this evaluation make for concerning, but unfortunately not surprising, reading.
‘Just like the early implementer pilot, childcare providers taking part in the early roll-out of the 30-hour offer reported higher costs and lower profits. Is it any surprise, then, that a significant proportion of providers in the four early rollout areas chose simply not to deliver the extended hours? The report itself confirms that nearly half of those providers that opted out did so because of insufficient funding.
‘And while the evaluation report confirms that, as expected, the scheme remains popular among parents, it's clear that in many cases, '30 hours free childcare' is anything but, with many parents taking part in early rollout having faced increased fees and charges, and restrictions on when places could be taken up.
‘The Government has the ability to make this a success, but its constant refusal to listen to any criticism about what is clearly an incredibly flawed policy, and to acknowledge that the scheme simply cannot succeed in the long term without a significant increase in funding, is doing just the opposite.
‘With the national rollout of the scheme imminent, it's time for Government to stop pretending all is fine and start making the changes needed to ensure that providers can support this policy without risking their sustainability and that parents can actually access the "free childcare" they were promised.’
Purnima Tanuku, chief executive of National Day Nurseries Association (NDNA), said, ‘The Government must acknowledge that there is a serious problem and that we are at a crisis point with 30 hours funded childcare.
‘It must be acknowledged that there is a funding shortfall to pay for this childcare, which is not free and never has been.
‘The report says that providers were willing to offer extended ‘free’ hours in pilot areas, but that is because many do not believe they have a choice within market forces. Parents would simply move their children to a setting which does offer this.
‘With regards to whether the pilot providers were offering '‘flexible and free’' hours, we strongly urge the Government to allow nurseries to deliver this scheme in a way which suits their own businesses. If this means charging parents for additional services or only offering it during certain hours in the week, that has to be a business decision in order to balance the books. If providers are not allowed this flexibility, then they risk seeing many more businesses closing their doors.
‘The evaluation report states that there was a tendency for higher costs and lower profits, which adds weight to the argument that nurseries need to be in charge of their own business decisions.
‘This policy needs to be reviewed urgently, not just in April 2018.
‘If there is no meaningful investment available, the Government needs to acknowledge that all childcare providers are different and charge accordingly. One size does not fit all. Parents must be allowed to choose where to send their child and use the Government money as a subsidy towards their place.’