30-hour free childcare pledge in jeopardy, say MPs

Committee says childminders could decide not to offer additional hours owing to concerns they would be left out of pocket

David Cameron plants flowers with children during a visit to a nursery in London in June last year. Photograph: Carl Court/PA

David Cameron’s promise of 30 hours of free childcare a week for nursery-age children is in jeopardy because too few early-years providers are willing to offer places, parliament’s spending watchdog has found.

Under an initiative outlined by the prime minister during the general election campaign, the current entitlement of 15 hours of free care for three- and four-year-olds is supposed to be doubled by next year.

But the public accounts committee said there was a real risk that childminders and nurseries would decide not to offer the extended hours because of concerns they would be left out of pocket.

“Evidence suggests this would most affect families from disadvantaged areas, which is doubly concerning given the already disappointing take-up of funded places for disadvantaged two-year-olds,” said the committee’s chair, Meg Hillier.

“The government must take responsibility for identifying the reasons for this, and take remedial action. This needs to be in tandem with tackling weaknesses in the current system, in particular obstructions to parents taking advantage of the help and services available.”

The cross-party group of MPs also said parents were receiving “unacceptable variations” in information, with some reporting that nurseries and childminders would only offer the entitlement on the condition that parents pay for additional hours.

The Conservatives made the 30-hour pledge in their manifesto last year and, last June, Cameron announced he would bring the plan forward in the childcare bill so that parents would see benefits as early as 2016.

The free childcare would be available to up to 600,000 families and worth around £5,000 a year, including the £2,500 value of existing free childcare offers.

Cameron said at the time: “We are pressing ahead with these reforms so that not a moment is lost in getting on with the task, going further than ever before to help with childcare costs, helping hardworking families and giving people the opportunity to get into work.”

The committee examined a National Audit Office report on the scheme and questioned witnesses including childcare providers.

The MPs’ report says: “Private and voluntary providers report that the amount they currently get paid for providing free childcare is not enough to cover their costs and they therefore rely on charging parents for additional hours or other sources of income to meet them.

“There is a risk that providers, who can choose whether or not to offer parents ‘free’ childcare, will choose not to offer the new entitlement of a further 15 hours because doing so would reduce their opportunity to charge parents for hours outside of the entitlement.”

The committee recommends that the Department for Education (DfE) use pilots of the scheme to test whether nurseries and childminders are able to meet the expected demand.

The report raises concerns that the DfE has no method for checking how local councils are managing childcare in their areas. Funding is given to authorities for free childcare based on the number of eligible children locally. Councils use their own formulas to allocate funding to nurseries and childminders, and can keep some to pay for central services.

The amount that providers receive varies by area, with some getting £2.28 an hour for a three- or four-year-old and others getting £7.15.

“The department does not know how local authorities use the centrally retained funding or what they do to manage their childcare markets to ensure there are enough places to meet demand,” the report says.

It adds: “There are unacceptable variations in the amount of information available to parents about access to free childcare.”

Nurseries are being encouraged to stay open for longer to offer funded places for three- and four-year-olds between 6am and 8pm. The maximum funded session length will remain at 10 hours.

Neil Leitch, chief executive of the Pre-school Learning Alliance, said: “The public accounts committee is absolutely right to warn that there may not be enough providers willing to deliver the 30-hour free childcare offer next year if government does not address the sector’s concerns. Independent research commissioned by the alliance has shown that, even with the increased average rates promised by government, there is still likely to be a significant shortfall in funding when the scheme rolls out in 2017.

“Add to this the fact that many providers simply do not have the capacity to deliver extra childcare places, and it is clear that without urgent action many parents who have been promised 30 hours of free childcare may not actually be able to access them next September.”

A Department for Education spokesman said: “We are committed to supporting hardworking families and nothing shows this better than our landmark 30-hour free childcare offer.

“We have seen huge demand from local areas to take part in delivering that offer a year early, so we know childcare providers and local authorities want to help hardworking families too - and take-up of our existing offer for families of three and four-year-olds and disadvantaged families with two-year-olds has continued to increase.

“We will continue to work closely with providers as we get ready to provide this offer across the country in September 2017, backed up by our record investment into the childcare sector.”