DfE under more pressure to increase funding as take-up of two-year-old places drops

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There are 6,000 fewer disadvantaged two-year-olds taking up their funded place compared to a year ago, reveals new data.

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The number of eligible two-year-olds taking up a funded places has fallen by 6,200 in 12 months

According to the latest statistics from the Department for Education on funded places, as of January there were 148,800 eligible twos taking up the 15 hours, down from 154,200 in January 2018, a drop of 6,200 children.

Meanwhile, the rate of take-up of three- and four-year-old places has remained stable, with 92 per cent of three-year-olds and 95 per cent of four-year-olds accessing their entitlement. The majority of funded places continue to be delivered by private and voluntary settings.

The DfE says the decline in the number of two-year-olds taking up a funded place from 72 per cent in 2018 to 68 per cent this year is partly due to a change in the calculation of those that are eligible, meaning fewer children are entitled to the 15 hours.

However, the statistics chime with several studies suggesting that the introduction of the 30 hours is impacting upon the take-up of the two-year-old offer.

In January, the Education Policy Institute warned of a possible trade-off between provision for disadvantaged twos and that for three- and four-year-olds.

Sector response

Responding to the figures, the National Day Nurseries Association (NDNA) and the Early Years Alliance said they were not surprised at the drop in the number of twos taking up their funded place.

Neil Leitch, chief executive of the Alliance, said, ‘Sadly this has been on the cards for some time because, as we have repeatedly warned ministers, underfunding has made it increasingly difficult for providers to deliver places for all children cost effectively.

‘The children entitled to these places are some of those who would benefit most from early education so any Government should be concerned about this.

‘Ministers now need to reflect on where their stubbornness on early years funding is leaving our most vulnerable children and look to increase funding levels as a matter of urgency.’

The NDNA’s head of policy and external relations Jonathan Broadberry added, ‘We know that there is a lot of work being done in the London area to improve access to these funded places, but this is painting a picture of more fundamental issues affecting take-up across the country.

‘NDNA’s annual survey report last year revealed that half of respondent nurseries said they could not cover their delivery costs on the funding rates they were given for two-year-old places. Giving disadvantaged two-year-olds early support is crucial for them to reach their full potential, so these issues must be addressed if we are to close the attainment gap.

‘The data in this latest Government report also underlines how important private, voluntary and independent (PVI) nurseries are in delivering the Government’s flagship childcare policy. It is essential they are listened to and given fair, realistic funding rates.’

Liz Bayram, chief executive of the Professional Association for Childcare and Early Years (PACEY), said, ‘While it is good that the majority of three- and four-year-olds are taking up some form of funded early education in a good or outstanding setting, the continued decline in the uptake of the two-year-old offer needs to be considered as a matter of urgency.

‘These children would most benefit from quality early education and more needs to be done to encourage families to take up their entitlement. The number of childminders now offering funded place is positive, but it hides a story of low funding rates, delayed payments and other "red tape’. Many childminders are offering places because they feel they have to or risk losing the families they support to other providers offering 30 hours.’

Ms Bayram urged the Government to use the spending review to address the shortfall.

However, James Hempsall, director of Hempsalls, said that the drop in take-up was understandable as there is less demand for two-year-old places.

He said, ‘Everyone involved in the two-year-old offer should remain proud of its achievements. We view this year’s reduction as an understandable change in what is a highly dynamic childcare market. The number of eligible two-year-olds has fallen, as income levels have increased in lower paid employment through increases in national minimum wage. 

'This has influenced the power of demand for two-year-old places, against a backdrop of a growing 30 hours supply which is highly popular with parents and has required providers to work very hard and adjust and carefully manage their delivery models over the past 12 months. Looking at these models again over the next year with a view to increasing demand and supply will be important.          

‘We think there is much more that can be done, now 30 hours has been implemented, to reach eligible two-year-olds through partnership working and parent champions. Which is why there is a raft of new DfE funded projects this year focusing on doing just that.

 ‘It is everyone’s job to reach and engage families so the 32 per cent not taking-up places currently, know about it and can choose to benefit from this valuable entitlement.’

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