Over half of councils in London have seen, or expect, reductions in two-year-old places as a result of the 30 hours scheme for three- and four-year-olds or the associated Early Years National Funding Formula (EYNFF).
Councils report that it is becoming more cost effective for providers to cater for these older children, who are often less resource-intensive than their two-year-old counterparts, and come with laxer child:staff ratios, extra funding sources such as Early Years Pupil Premium and sometimes higher hourly rates.
Unlike the two-year-olds scheme, which is targeted at the 40 per cent most disadvantaged children of that age in England, the 30 hours is for three- and four-year-old children of working parents who can earn up to £199,999 between them before they become ineligible.
The findings, from a recent survey by London Councils, show that the number of two-year-old places has already decreased by 360 across six boroughs, while six further boroughs which have not been hit predict future reductions of up to 200 places each.
In addition, some providers have switched or are considering switching from two-year-old places to providing the additional 15 hours for three- and four-year-olds to ensure that those eligible for 30 hours didn’t move to another provider who offers the extra hours.
The findings also shed light on the pressures early years budgets are now facing. London Councils found that 13 out of 27 boroughs surveyed had to make savings in 2017-18 as a result of the introduction of the EYNFF, which sets the rates for nursery places for three- and four-year-olds.
This had the impact of reducing early years staff in the council, and reducing support, such as training, offered to PVIs. Back-office support for the implementation of 30 hours was also hit, despite councils reporting that the scheme brought about a substantial increase in enquiries and administration – the majority said this increased by between 50 and 75 per cent.
From this April, the amount councils can keep aside under EYNFF rules will reduce from 7 to 5 per cent, which means that significantly more boroughs – just over two thirds – will be forced to make savings. Some of these will be made on top of cuts from last year.
Neil Leitch, chief executive of the Pre-school Learning alliance, said, ‘The whole purpose of the two-year-old offer was to ensure that those children who would benefit most from quality early education and childcare have access to it, and yet we’re now in a situation where many providers – faced with a sustained lack of adequate funding, alongside increased capacity demands as a result of the 30 hours – have been forced to reduce the number of two-year-old places on offer.
‘The government has continually stressed the importance of improving social mobility and boosting the life chances of the most disadvantaged – and yet, its flagship childcare policy and continued refusal to admit that early years funding is woefully inadequate risks doing the complete opposite.’
Purnima Tanuku, chief executive of NDNA, said: 'A lack of planning and investment has resulted in both local authorities and early years providers struggling to deliver the 30 hours policy.
'[Two-year-olds] and their families are those most in need of ‘free’ childcare to give them the best start in life, so to deprive them of places would be totally unacceptable and undermines the whole vision of supporting families in need. Government must review the whole policy and engage with the sector to find solutions to address these problems.'
The DfE has been contacted for a response.