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TRANSCRIPT
INTER-DEPARTMENTAL CHILDCARE REVIEW – NOVEMBER 2002
Delivering for children and families
HM Treasury
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ACKNOWLEDGEMENTS
Inter-departmental childcare review: Delivering for
children and families
Led by Catherine Ashton, Department for Education and Skills, supported
by Dawn Primarolo, HM Treasury, Patricia Hollis, Department for Work
and Pensions and Barbara Roche, Minister for Women at the
Cabinet Office*
Officials from the Department for Education and Skills, the Department
for Work and Pensions, HM Treasury, the Department of Trade and
Industry, the Women and Equality Unit, the Children and Young People’s
Unit, the Department of Health and the No 10 Policy Directorate were
involved in the review
The review was project managed by the Strategy Unit
* Now the Office of the Deputy Prime Minister
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CONTENTS
Foreword by the Prime Minister 2
1. Executive summary 4
2. Introduction 8
3. Meeting the needs of families: supporting employment
opportunity and tackling child poverty 14
4. Meeting the needs of children: enhancing child outcomes 29
5. A particular role for schools 40
6. Delivery and infrastructure: investment must be backed up by reform 47
7. Conclusion 60
Annexes
1. Background 63
2. Implementation Plan 65
Contents
1
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FOREWORD BY THE PRIME MINISTER
Since we launched the National Childcare Strategy and SureStart in 1998, we have created childcare places for nearly amillion children, nursery places for all 4 year olds, and over300 Sure Start programmes to help under 4s in deprivedareas. These excellent initiatives have already made a real impact on the lives of children, parents and local communities.
But there is still a lot more to do, and I welcome this reportwhich has provided powerful analysis and a strong case forusing these initiatives as a foundation for further investmentand reform. The conclusions of this report have alreadybeen reflected in the Spending Review, which unveiled a£1.5 billion combined budget for childcare, early years andSure Start by 2005/06, and a doubling of spending in realterms on childcare by 2005/06.
The report’s recommendations for investment matchedby reform have been reflected in new machinery ofgovernment arrangements, with the bringing together ofearly years, childcare and Sure Start policy and delivery intoone inter-departmental unit, with Baroness Ashton at itshead. Integration at the centre will pave the way for reformof local infrastructures.
New funding and a new infrastructure for childcare will helpus move towards fulfilling a vision in which every parent canaccess affordable, good quality provision. We will create atleast 250,000 more childcare places by 2006. And we willcreate new children’s centres in disadvantaged areas,building on existing Sure Start and early excellence centresto offer one stop services and good quality support tochildren, parents and childcare providers.
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The measures detailed in this report represent good newsfor children, giving them a better start in early educationand health so that they can achieve their potential, nomatter where they live. It is also good news for parents: a commitment to support the provision of good qualitychildcare, giving parents the chance to work. And finally,these reforms are good news for communities: qualityservices for children and families delivered in response tolocal need, a reduction in crime, higher productivity, astronger labour market and the building of civic society.
Tony BlairPrime Minister
Foreword by
the Prime
Minister
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The Government’s vision and strategyThe Government’s vision for childcare is onein which every parent can access affordable,good quality childcare. This will mean:
• developing a thriving supply ofchildcare to benefit all parents, throughtargeted assistance to a wide range ofproviders, many of whom could be basedwithin primary and secondary schools.Employers will be encouraged to provideinformation and support for childcare. TheGovernment will also support the creationof the childcare places needed to meet its2010 objectives of 70 per cent of loneparents in employment, and halving childpoverty;
• providing financial help to lower andmiddle income parents for whom thecost of childcare is a barrier to work.The childcare tax credit component of theWorking Families’ Tax Credit (WFTC) andDisabled Person’s Tax Credit (DPTC)provides working parents with generoussupport towards the costs of approvedchildcare. This assistance will continue – inan improved, more flexible form – as partof the Working Tax Credit from April 2003,and the Government is committed tokeeping the level of support under review;and
• transforming the way services aredelivered to ensure over time theGovernment better meets the needs ofchildren and their parents, particularly
for the most vulnerable, reflecting theearly lessons of Sure Start. TheGovernment’s longer-term aim is toestablish a children’s centre in every one of the 20 per cent most disadvantagedwards. These centres will bring togethergood quality childcare with early yearseducation, family support and healthservices. These centres will also act asservice hubs within the community forparents and providers of childcare servicesfor children of all ages.
In support of this vision, and reflecting the recommendations of this review, theGovernment will be more than doublinginvestment in childcare by 2005/06. This will form part of a combined budget for SureStart, early years and childcare that will riseto £1.5 billion by 2005/06. The substantialincrease in resources will be matched byreform of central and local deliveryinfrastructures to better meet the needs of children and their parents.
The way in which policy is made andservices are delivered will be transformed:to deliver more integrated services,responsibility for childcare, early years andSure Start is being brought together within a single inter-departmental unit. As well asjoining up existing services and merging therelevant units within central government, theGovernment also intends to simplify fundingarrangements, streamline targets andenhance local authorities’ role in supporting delivery.
1. EXECUTIVE SUMMARY
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Executive summary
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The strategy has beeninformed by the conclusionsof the inter-departmentalchildcare reviewMuch has been achieved through initiativessince 1997, particularly through the NationalChildcare Strategy (NCS) and Sure Start. Thereview found that it was important to buildon these successes with a new strategicapproach – to meet parents’ aspirations forgreater choice; to increase lone parent labourmarket participation; and to improveoutcomes for the most disadvantagedchildren.
The availability of good quality, affordablechildcare is key to achieving some importantGovernment objectives. Childcare canimprove educational outcomes for children.Childcare enables parents, particularlymothers, to go out to work, or increase theirhours in work, thereby lifting their familiesout of poverty. It also plays a key role inextending choice for women by enhancingtheir ability to compete in the labour marketon more equal terms, helping them toovercome the glass ceiling, and by ensuringthat they themselves may not face poverty inold age.
Childcare can also play an important role in meeting other top level objectives, forexample in improving health, boostingproductivity, improving public services,closing the gender pay gap and reducingcrime. The targets to achieve 70 per centemployment amongst lone parents by 2010and to eradicate child poverty by 2020 arethose that are most obviously related.Childcare is essential for these objectives to be met.
But there have been problems with theavailability of childcare. There are shortagesin most childcare markets. Shortages areparticularly acute in deprived areas, whereproviders struggle to be financially viable.
The evidence made a strong case foradditional investment backed up by reform:
• There are very significant payoffs fromgood quality early interventions fordisadvantaged children: not only do thebenefits cascade through the educationalsystem, but there are big gains in reducingcrime, in improving health and in reducingdemand on social services. There was astrong case for more good qualitychildcare to be built around Sure Start andneighbourhood nurseries, and for nurseryeducation to place more emphasis onhealth and family support. New children’scentres could provide childcare, early yearseducation, and family support and healthservices. While there would be a need forsome new centres, most would grow fromexisting provision.
• New investment in childcare is needed to support the Government’semployment and poverty targets: targetsto increase lone parent employment to 70 per cent by 2010, in particular, requirea substantial increase in childcare places.The market alone will not deliver this. New funding is therefore required topump-prime provision, including forchildminders, and to provide betterinformation for parents. More childcare inand around schools will help to addressthe patchwork of provision faced by manyparents of school-age children. And extrahelp in the most deprived areas will helpensure that provision is sustained.
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management, and more integratedfunding streams at a national and locallevel. The need for integration extended to the centre, where the review found thatthere was a rationale for bringingresponsibility for a range of initiatives together.
• Investment needs to be backed up byreform: to deliver more integratedservices, the review found that there was a strong case for bringing responsibilitytogether at the local authority level. Thiswould be backed up by a clearer brand,clearer outcome-based performance
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The challenges identifiedin the review
Government needs to supportthe growth of childcare places,particularly in disadvantaged areas,and to ensure that childcare will beavailable when parents want it. Newfunding is required to pump-primeprovision, to provide betterinformation for parents and toincrease the availability of childcarein schools.
New investment is particularlyrequired to support theGovernment’s lone parent and childpoverty targets.
The opportunity to use childcare to further educational and widerobjectives is being missed
• there is a clear rationale forgovernment intervention to investin providing integrated services indisadvantaged areas.
Delivering on the Government’s vision
New funding to develop a thriving supply ofchildcare by supporting the creation of at least250,000 places by 2005/06.
• time-limited support to help providersovercome the difficulties in accessing start-up capital;
• introduction of a sustainability grant in themost deprived areas;
• extension of childminder grants;
• an expansion of business support to childcareproviders;
• support for the training and development ofchildren’s centre leaders, managers and staff;
• better use of schools in providing childcare;
• encouraging more involvement of employers,and spreading best practice; and
• continued financial help to lower and middleincome parents for whom the cost ofchildcare is a barrier to work.
New funding to support the longer-term vision of establishing children’s centres for pre-schoolchildren in the 20 per cent most disadvantagedwards. All children’s centres will provide a coreoffering that includes good quality childcare, earlyyears education, health services, family support,parental outreach and a base for childminders. By March 2006, at least 650,000 children will becovered by children’s centre services.
Summary of conclusions
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Executive summary
7
This report is only applicable to England, andis structured as follows:
• Chapter 2 sets out the context for thereview, current Government initiatives andspending, and outlines the key remainingchallenges.
• Chapter 3 sets out the role of childcare inmeeting the needs of families, especially insupporting employment opportunity andtackling child poverty. It concludes bysetting out the building blocks forachieving the Government’s vision of achildcare market where every parent canaccess affordable, good quality childcare.
• Chapter 4 examines the role of differenttypes and qualities of childcare inenhancing child outcomes. It identifies the steps the Government will take totransform the way services are delivered tomeet its longer-term aim of establishing achildren’s centre in every one of the 20 per cent most deprived wards.
• Chapter 5 describes the important rolethat schools will play in meeting the vision,and the measures that will be taken topromote the availability of childcare in and around schools.
• Chapter 6 makes the case for reformingthe infrastructure and performancemanagement regime, and describes the steps that Government will take to co-ordinate responsibility for childcare,early years and Sure Start at a local andcentral level.
• Chapter 7 summarises the conclusionsfrom the review and the measures thatGovernment will take.
The report contains two annexes:
• Annex 1: Background on the project team,inter-Ministerial group and methodologyfor the review; and
• Annex 2: Implementation Plan.
Summary of conclusions – continued
Funding and delivery mechanismsneed to be reformed
• there are too many uncoordinatedprogrammes; and
• accountability is unclear
Responsibility for childcare, early years education and Sure Start will be integratedwithin a new inter-departmental unit, with atotal budget of £1.5 billion by 2005/06, toensure that government policy for children,particularly young children, is joined up.
Greater funding and responsibility for delivery of childcare services will be devolved to localauthorities, who are best placed to assess localneeds.
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2.1 The inter-departmentalchildcare review
The inter-departmental childcare review was set up to develop a vision for 2010 forchildcare in England, and to inform the 2002Spending Review. Reflecting the fact thatchildcare supports a wide range ofGovernment objectives, Ministers and officialsfrom the Department for Education andSkills, the Department for Work and Pensions,HM Treasury, the Department of Trade andIndustry, the Women and Equality Unit, theChildren and Young People’s Unit, theDepartment of Health, and the No 10 PolicyDirectorate were involved in the review.Further information on the project team and steering group is set out at Annex 1.
The review examined evidence on thechildcare market, the role of childcare inimproving outcomes and the payoffs fromchildcare investment. It also examined thescope for more effective and sustainabledelivery mechanisms. This process involvedan analysis of the role and payoffs of differenttypes of childcare, ranging from childcarewhich is not integrated with any form ofeducation (whether group-based or nongroup-based, and for all ages), through toearly childhood interventions, whichintegrate several disciplines, such as carecombined with education, parental supportand health services.
Given key Government targets to reducechild poverty and increase lone parentemployment, the review has aimed to targetresources on those groups most in need. As such, the review has not made specificrecommendations regarding nannies and au pairs.
2.2 Context
2.2.1 Demand for childcare is likely to increaseAlthough the number of children is projectedto fall by 0.6 million over the period 2000–2011, increasing employment rates, changesin the pattern of work and increases in thenumber of lone parents mean that demandfor childcare is likely to increase.
2.2.2 Shortages already existThere are shortages in most local childcaremarkets, and the 2001 Parents’ DemandSurvey found that some 29 per cent of loneparents and 22 per cent of two-parentfamilies reported not being able to findchildcare when they wanted it, equivalent to 24 per cent of households overall.1 Of thelone parents experiencing this, some 52 percent reported that it was for work-relatedreasons that they wanted childcare.Shortages are particularly acute in deprivedareas, where providers struggle to befinancially viable.
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1 Though it should be noted that even one day’s unmet demand would show up in the figures.
2. INTRODUCTION
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2.2.3 Childcare helps to meet a widerange of Government objectives
The availability of good quality, affordablechildcare is key to achieving some importantGovernment objectives. Childcare canimprove educational outcomes for childrenand their parents. Childcare enables parents,
particularly mothers, to go out to work, orincrease their hours in work, thereby liftingtheir families out of poverty. It also plays akey role in extending choice for women byenhancing their ability to compete in thelabour market on more equal terms, helpingthem to overcome the glass ceiling, and by Introduction
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201120001991196119311901
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Figure 2.1: Child numbers are in decline
Source: Office for National Statistics, population estimates
But changing female employment rates mean that demand is likely to increase
Figure 2.2: Trends in male and female labour market participation rates
Source: Social Trends, 2001 edition (no. 31), Office for National Statistics
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ensuring that they themselves may not facepoverty in old age.
Childcare can also play an important role in meeting other top level objectives, forexample in improving health, boostingproductivity, improving public services, closing the gender pay gap and reducing thelikelihood of children committing crime. Thetargets to achieve 70 per cent labour marketparticipation amongst lone parents by 2010and to eradicate child poverty by 2020 arethose that are most obviously related.Childcare is essential for these objectives to be met.
2.3 Provision and funding
2.3.1 The Government is alreadydoing a great dealBefore the launch of the National ChildcareStrategy (NCS) in 1998 there had been littlecentral government involvement in childcare.The NCS aims to deliver quality, affordableand accessible childcare in everyneighbourhood. The primary mechanism for delivering new places is through pump-priming funds to encourage childcarebusiness start-ups, especially in
disadvantaged areas. The NCS has played asignificant role. Since 1997 there has been anet increase of 547,000 children benefitingfrom new places. The Department forEducation and Skills (DfES) is on track toachieve its Service Delivery Agreement (SDA)to create 900,000 new childcare places in theprivate, public and voluntary sectors for 1.6million children by March 2004.
Between 2001/02 and 2003/04, Governmenthas allocated spending of £8.2 billion (£2.5 billion in 2001/02, £2.8 billion in2002/03, and £2.9 billion in 2003/04) on early years education, childcare and SureStart (excluding tax credit spending on childcare). The bulk of this, £5.9 billion(£1.8/2.0/2.1 billion), is destined to establish,sustain and improve universal, free, part-timeeducational provision for 3 and 4 year olds.
Of the other key areas of spending, the SureStart spend is £1.1 billion (£184/449/499million), reaching around 200,000 children.Spending on childcare, including £325 million from the New OpportunitiesFund (NOF), is £1.2 billion (£407/430/403million). An estimated £725 million will alsobe spent on childcare through tax creditsupport to low income families, with averagehelp standing at £39.22 per week per family.
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Standard Spending Assessment for early education £4.8 billion
European Social Fund£88.5 million
New Opportunities Fund£325 million
Early Years EducationBudget £1.098 billion
Learning and SkillsCouncil £270 million
Childcare Budget £561 millionSure Start £1.1 billion
Figure 2.3: Spending on Sure Start, early years education and childcare
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A further £165 million is spent in Englandon out of schools learning from NOF. Anadditional £194 million (£51/68/75 million)is spent on childcare for Higher Education(HE) and Further Education (FE) students.
Figure 2.3 (see page 10) shows theproportion of funds allocated to childcare,early years education and Sure Start over thethree-year period from 2001/02 to 2003/04(excluding spending through tax credits andmoney for FE and HE students’ childcare).
2.3.2 The main Governmentprogrammes
ChildcareSpending on childcare over the same timeperiod is £1.2 billion and includes:
• £561 million childcare grant for a range ofactivities including childminder start-upgrants and networks, pump-priming andtraining;
• £325 million from NOF for pump-primingout of school childcare places andneighbourhood nurseries;
• an estimated £270 million for trainingthrough the Learning and Skills Council(LSC); and
• £88 million from the European Social Fund (ESF) for a variety of programmesincluding the recruitment campaign.
A further £165 million NOF funding is spenton out of schools learning in England.
In each English local authority area EarlyYears Development and Childcare
Partnerships (EYDCPs) develop and deliverlocal strategic plans to create new childcareplaces and put in place universal early yearseducation. EYDCPs are convened by localauthorities, which also have duties to providepart-time early education places for 3 and 4year olds; information, advice and training tochildcare providers; and Children’sInformation Services, for example.
Sure StartSure Start works with parents-to-be,parents and children in disadvantagedneighbourhoods to improve social andemotional development, children’s ability tolearn, and health services; and to strengthenfamilies and communities. Sure Startprogrammes are run by local partnershipsand can deliver a range of services includingchildcare, training for work and help withbasic skills. The Sure Start spending allocationis £1.1 billion, currently reaching around200,000 children. The forecast is that SureStart will reach 400,000 children by 2004. So far, 522 programmes have beenannounced and over 300 have beenapproved and are delivering services.
Every Sure Start programme works from ashared set of key principles. They must:
• co-ordinate, streamline and add value toexisting services in the Sure Start area;
• involve parents, grandparents and othercarers in ways that build on their existingstrengths;
• avoid stigma by ensuring that all localfamilies are able to use Sure Start services;
Introduction
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• ensure lasting support by linking Sure Startto services for older children;
• be culturally appropriate and sensitive toparticular needs; and
• promote the participation of all localfamilies in the design and working of theprogramme.
Each Sure Start programme is different, asthey are designed to meet local needs, but allprogrammes are likely to include:
• better ante-natal support and advice toparents-to-be, including help to stopsmoking;
• visits to all new parents within two monthsof the birth to introduce them to SureStart services;
• improved quality of early learningexperiences for young children;
• improved quality of childcare;
• more childcare places and a greater varietyof provision;
• more accessible baby clinics and advice onhealth and child development; and
• support for parents including parentinggroups, advice on healthy eating andtraining for work.
The Children’s FundIn addition, the Children’s Fund is providing£380 million over three years (2001–2004) tofund preventative services over and abovethose provided through mainstream statutoryservices which prevent children and theirfamilies suffering from the consequences ofpoverty. The fund primarily targets 5–13 yearolds at risk of social exclusion and is currentlybeing rolled out to cover the whole ofEngland by April 2003. Forty first-wave areaswere selected from the areas with the highestchild poverty levels and received Children’s
Fund money from 2001. Local partnerships(not those responsible for planning childcare,see below, but likely to contain many of thesame people) are responsible for assessinghow to spend the money. The Fund can beused to support a wide range of services, the key criterion being that the servicesdeveloped help prevent children and theirfamilies suffering the consequences ofpoverty but should genuinely add newservices in each area. So far, servicesproposed by local partnerships cover a widerange of activities including creative artsprojects, family support, literacy programmesand health awareness.
2.3.3 Overarching strategy forchildren and young peopleThe Government is developing anoverarching strategy for all children andyoung people from conception to age 19. It will contain a high level vision and a set of principles to which all policies and servicesfor children and young people shouldadhere. It will articulate the outcomesGovernment wishes to see for children andyoung people, and will form a frameworkwithin which future policy making shouldtake place. The framework is intended tocover all aspects of children’s and youngpeople’s lives, so will be relevant todevelopments in the field of childcare.
2.3.4 The Government also providesfinancial support to parentsIn addition, the Working Families’ Tax Credit(WFTC) provides financial assistance forworking families on low to middle incomes.2
WFTC and the Disabled Person’s Tax Credit(DPTC) both include a childcare tax creditelement to help with childcare costs. This isworth up to 70 per cent of eligible childcare
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2 For couples it is not solely dual earner couples who get the childcare tax credit element of WFTC; around 10 per cent of couples inreceipt of the childcare element are single earner couples with an incapacitated partner.
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costs. Eligible costs are limited to £135 aweek for the care of one child or £200 fortwo or more children where both parents orthe lone parent is working 16 or more hoursper week.
As at February 2002, there were some160,200 people who received childcare helpas part of their WFTC, and the average extraWFTC paid, as a result of the childcare taxcredit, was £39.22. This implies anannualised expenditure of some £330million. Housing Benefit and Council TaxBenefit also contain childcare credit elements.
This assistance will continue – in animproved, more flexible form – as part ofWorking Tax Credit from April 2003, and theGovernment is committed to keeping thelevel of support under review.
From April 2003 the new integrated ChildTax Credit will bring together the support forchildren currently provided through theWorking Families’ and Disabled Person’s TaxCredits, the Children’s Tax Credit, IncomeSupport and Jobseeker’s Allowance. On itsintroduction, the Child Tax Credit, anduniversal Child Benefit, will guaranteesupport of:
• £26.50 a week for the first child for the 85 per cent of families with an income ofless than £50,000 a year; and
• £54.25 a week for the first child in familieswith an income of less than £13,000 a year.
In addition, the Government provides £194 million on childcare for HE and FEstudents. Financial support for childcare isalso provided to those on the New Deal forLone Parents programme.
2.4 But important challengesremainAlthough the Government has done a greatdeal, it is not getting the full value of thesubstantial investment it is making inchildcare and early years services for anumber of reasons.
• More needs to be done to addressareas of market failure: barriers toentry and sustainability and informationproblems mean that childcare is notavailable when – and where – parentsneed it. Pump-priming funding isdelivering new provision but in certainareas this is unlikely to be sustainable inthe longer term. Problems are mostpronounced in disadvantaged areas.
• The opportunity to use childcare to further educational and widerobjectives is being missed: thereis a clear rationale for governmentintervention, and the payoffs (especially for education and crime) from investing in providing integrated services indisadvantaged areas are significant.
• Current funding and deliverymechanisms are too complex:there are far too many uncoordinatedprogrammes relating to childcare whichhave their own funding streams, planningand bidding processes and targets.Accountability is unclear as EYDCPs haveno legal status or bank account. Inaddition, they do not have full control ofeither the means or the mechanisms todeliver the numerous targets set by centralgovernment.
• Branding is confusing to parents andproviders: the existence of similar butdifferently named and separately brandedinitiatives (Sure Start, Early ExcellenceCentres, Neighbourhood Nurseries) onlyserves to confuse the picture.
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3 The Government’s approach on child poverty is set out in the HM Treasury Pre Budget Report 2001, Tackling Child Poverty.
3. MEETING THE NEEDS OF FAMILIES: SUPPORTINGEMPLOYMENT OPPORTUNITY AND TACKLINGCHILD POVERTY
Summary
Key conclusions of the review
Work is the key long-term route out of poverty for those who can work.Policies to enhance opportunities to work will help close the gender paygap and boost productivity. A lack of available, affordable childcare is abarrier to work for many parents.3
Availability is problematic due to barriers to setting up new provision and problems around sustainability. Vigilance will be required to ensurethat neither difficulties in expanding the workforce, nor regulations, act as a brake on market growth. Affordability may also be problematic,particularly for low income households moving into work.
Employers should be encouraged to be more involved in helping theiremployees to access childcare. Parents also find it difficult to obtaininformation about childcare availability and its quality.
The 2002 Spending Review
The Spending Review provided funding to support the Government’svision of a childcare market where every parent can access affordable,good quality childcare.
The settlement provided targeted support to increase the availability ofchildcare by supporting the creation of over 250,000 childcare places, and provided additional support to childcare providers in the mostdisadvantaged wards. Support was also provided to promote awarenessamongst parents.
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Finding childcare can be a real problem.Some 29 per cent of lone parents and 22 per cent of two-parent families reportednot being able to find childcare when they wanted it, equivalent to 24 per cent of households overall. Of the lone parentsexperiencing this, some 52 per cent reportedthat it was for work-related reasons that theywanted childcare. A further 20 per centreported study reasons. The equivalentnumbers for two-parent families are 57 per cent and 14 per cent.6
A significant proportion of lone parents citeproblems with finding or affording childcareas reasons for not looking for a job offering16 hours’ work or more per week. As can beseen in Table 3.1, in 2001, 19 per cent oflone parents cite not being able to affordchildcare as a reason. 23 per cent cited thisfactor in 1999 and in 2000. Some 15 percent in 2001 cite childcare not beingavailable as a reason. In 1999, 16 per centcited childcare availability; in 2000 this was22 per cent.7
Meeting the
needs of
families: supporting
employment opportunity
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child poverty
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4 Defined as having incomes below 60 per cent of the median income.5 Data for 2000/01 from Households Below Average Income 1994/95 – 2000/01.6 Woodland, Miller and Tipping: Repeat Study of Parents’ Demand for Childcare, DfES, 2002, pp.103, 107.7 2000 and 2001 figures from unpublished DWP analysis using data from the Families and Children Survey (FACS). 1999 figures from
Marsh et al., DSS RR138, 2001, p.185. Findings need to be treated with caution as sample sizes are small.
Table 3.1: Reasons for not working 16+ hours per week: lone parents 2001
Note: Other reasons are cited in the research – selection only shown here; multiple responses allowed
Source: DWP analysis (unpublished); data from the Families and Children Survey 2001
3.1 Key conclusions of the review
3.1.1 Worklessness and poverty
Not being able to find affordable childcare isholding back parents who want to work,making it more difficult to achieve increases in lone parent employment and reductions inchild povertyWorklessness is one of the prime causes ofpoverty for families. 61 per cent of worklessfamilies are in poverty4 and 77 per cent ofchildren in workless lone parent families are inpoverty.5 It is estimated that around two-thirdsof families’ exits from poverty in any one yearare associated with getting a job or increasingearnings in the family. Childcare has a key role to play in enabling parents to work, inenabling parents in low income families toincrease their hours, and in meeting targets to achieve 70 per cent labour marketparticipation amongst lone parents by 2010.
Looking% for work Not looking for work 16+ hrs All
of 16+ hrs
Is there anything in Working Expects Expects Does Doesparticular that is <16 hrs to look to look not notstopping you looking over sometime know expectfor a job of 16+ next few in the when will to lookhours per week? months future next look in future
Don’t want to spendmore time away from 8 28 30 41 100 25 33children
Cannot afford childcare 11 22 14 22 0 10 19
No childcare available 13 9 16 17 0 3 15
Own illness/disability 3 9 19 11 49 49 14
Studying/training scheme 2 0 6 13 0 1 9
Better off not working 2 12 5 7 0 7 6
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These figures show that difficulties withchildcare can act as a barrier to work. It isclearly not the only barrier to work andsolving their childcare difficulties is nopanacea for workless households. However,ensuring that childcare is available andaffordable will be important in supportingthe movement of parents into work, and insupporting other policies aimed at helpingparents move into work.
Ensuring that parents can access affordable,good quality childcare will also play a majorrole in supporting parental choice to find theright balance between work and spendingtime with children. Available, affordablechildcare will help women in particular enter,remain in, and maximise their hours of work;in addition to assisting with employmentretention, available and affordable childcarecan also promote career advancement. Thiswill help to increase lone parent employmentrates, decrease child poverty, reduce thegender pay gap and boost productivity.
3.1.2 Access
Childcare is not always available for parentswho want to workParents should be free to choose the type of childcare which suits them best, be thatformal or informal care. Formal care includeschildminders, nurseries, out of school clubsand playgroups. Informal care is given byrelatives or friends. Informal care currentlyplays a major role in the childcare system,and is expected to continue doing so. Frominformation on childcare use in the last year,some 72 per cent of parents used informalchildcare at least once in 2000, while 50 percent used formal childcare (including 37 percent of parents who had used both). From
information on more regular use, 36 per centof parents had used informal care in the pastweek.8 Nannies and au pairs also form part ofthe overall supply of childcare.
Certain groups feel childcare shortages morekeenly than others. Shift workers maystruggle to find formal childcare for the hoursit is needed. Parents of children withdisabilities and special needs may havegreater difficulties in finding suitable care.Parents of large families may also faceparticular difficulties. Children withstatemented special needs were less likely tohave used childcare in 2000 – 76 per cent ofchildren with a defined special need hadused childcare, against 83 per cent ofchildren generally.9 This could reflect apreference amongst the parents of thesechildren to look after them themselves, or it may reflect a lack of provision for childrenwith special needs. Lone parents are morelikely to report difficulties in finding childcarewhen it is needed.
There exist significant geographical variationsin the level and diversity of formal childcareavailable. Variations between local authoritiesare marked: playgroup provision is the leastvariable category, yet even in this case the“best” LA was found to have eight times asmany places (per 1,000 children) as the“worst”.10 Variations exist between rural andurban areas. A greater number of places (per 1,000 children) is available in nurseries,out of school clubs and holiday schemes inurban areas, while a larger number ofchildminder and playgroup places areavailable in rural areas.11
A key variation in the provision of formalchildcare is that between deprived wards12
and other areas. Deprived wards have been
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8 Woodland, Miller and Tipping, Repeat Survey of Parents’ Demand for Childcare, DfES RR348, 2002, p.35.9 Woodland, Miller and Tipping, Repeat Survey of Parents’ Demand for Childcare, DfES RR348, 2002, p.49.10 Paull and Taylor, Mothers’ employment and childcare use in Britain, IFS, 2002, p.59.11 Paull and Taylor, Mothers’ employment and childcare use in Britain, IFS, 2002, p.53.12 Electoral wards in the bottom 20 per cent of the DTLR index of deprivation.
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found to have 6–8 places per 1,000children.13 Across all wards, the average was12–14 places.14 These numbers reflect thefact that providers find it more difficult tostart and maintain provision in deprived areas(see the section below on sustainabilityproblems). Yet deprived wards are preciselythe areas that are most important to reach inorder to meet key Government targets onlone parent employment and child poverty.
3.1.3 Affordability
Help with affordability is importantChildcare is inherently expensive to provide,making it difficult for many parents to afford.In particular, parents looking to move intolow paid work will find it difficult to affordformal childcare. Informal care fills the gapsfor many, but there is no evidence thatinformal care leads to the same outcomes forchildren or parents as formal care.
The introduction of the childcare tax credit,as part of the Working Families’ Tax Credit(WFTC), was an important step forward. Forlone parents in work for 16 hours or moreper week, or two-parent families where bothparents are in work, and where their incomelevel makes them eligible for help, thechildcare tax credit will cover 70 per cent of childcare costs, for eligible forms of care(registered and approved care).15 Costs arecovered up to a limit of £135 per week forone child or £200 for two or more children,making the maximum payout £140 per week(70 per cent of £200).
Lone parents on the New Deal for LoneParents can also be given help with childcarecosts when they undertake training, take uppart-time work or attend job interviews. Inaddition, the “Adviser Discretionary Fund”
can be used to help with up-front childcarecosts where they could be a barrier to a loneparent entering full-time employment.
Childcare tax credit has been well received,with the number of awards growingsignificantly since its introduction. ByFebruary 2002, just over 160,000 families inthe UK were benefiting from the childcaretax credit element of WFTC.16 The childcaretax credit plays a critical role in the childcarestrategy as a whole. By providing financialhelp to lower and middle income parents forwhom the cost of childcare could be a barrierto work, the tax credit helps to ensure thatwork pays – encouraging lone parents intowork and helping all parents to lift theirfamilies out of poverty through work. It alsoprovides valuable assistance to familiesoutside areas targeted for additionalGovernment help for childcare providers. In these other areas, the problems inestablishing childcare are less acute, but thetax credit is important in helping low incomehouseholds to afford the childcare places on offer.
The literature on employment choice(typically by mothers) and childcare costsshows the effectiveness of childcare subsidiesin encouraging women into work. Studies –usually based on economic simulations –have shown that significant reactions interms of moves into the labour market arelikely following the introduction of subsidiesto help parents (usually mothers) withchildcare costs.17 The set-up of the childcaretax credit is particularly effective, since itensures strong incentives for the secondearner in a family to move into work.
The childcare tax credit is also of help toproviders. By assisting parents in affording
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13 Children aged 0–14 (0–16 for children with special needs).14 Data from DfES analysis of 10 per cent of EYDCPs (unpublished, 2001).15 For couples, it is not solely dual earner couples who get the childcare tax credit element of Working Families’ Tax Credit; around
10 per cent of couples in receipt of the childcare element are single earner couples with an incapacitated partner.16 Inland Revenue, Working Families’ Tax Credit Quarterly Enquiry, February 2002.17 David Blau, Child care subsidy programmes, NBER working paper 7806, 2000, table 7.
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childcare, it helps providers to charge morerealistic, sustainable fees for the services theyprovide. Some providers treat the fact thatparents are in receipt of childcare tax creditas a reason for offering especially low fees,rather than as assistance in affording theusual fee level. In the medium term,however, childcare tax credit can beexpected to help providers in all areas –but particularly in low income areas, to remain sustainable.
The new structure of tax credits, announcedin the Budget, makes a number of importantchanges, and the new tax credits will providehelp with childcare costs further up theincome distribution. These changes shouldhelp more people to access help for childcarethrough the new Working Tax Credit andmove into work on a long-run basis.
3.1.4 Provider issues
Childcare providers find it difficult to start upprovisionEven if providers recognise that there isdemand for childcare in a local area, theymay not be able to start up a nursery, out ofschool club or other childcare setting to offerplaces. This is due to a series of possibleobstacles to starting up provision (see Figure 3.1).
Research has identified the key obstacles tostarting up new provision, according todifferent types of provision. For day nurseries,the main obstacles appear to be convertingor adapting premises (cited by 65 per cent of respondents), the time it takes to fill upplaces (62 per cent) and buying childcarepremises (56 per cent). For out of schoolclubs, buying equipment was the mainbarrier (62 per cent), followed by convertingor adapting premises (55 per cent) and thetime it takes to fill up places (43 per cent).Both types of provider also mentioneddifficulties in getting loans as a barrier (44 per cent for day nurseries, 42 per centfor out of school clubs).18 And for out ofschool clubs, recent growth has rested almostentirely on the availability of funding fromthe New Opportunities Fund.
For group-based provision, then, there areclear concerns over capital – both the needfor capital in terms of buying premises andequipment, and converting space, and interms of access to capital. These concernsmay constitute important barriers to startingup childcare provision.
For childminders, the key concerns were thetime it takes to fill up places (mentioned by55 per cent), the time it takes to register withthe local authority (52 per cent) and buying
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18 Callender C., The Barriers to Childcare Provision, DfEE RR231, 2000, pp.60–72.
Difficulties in getting loans
Getting planning permission
Finding suitable premises
Lack of support for small businesses
Buying childcare premises
Time it takes to fill up places
Converting or adapting premises 62%
55%
43%
42%
37%
36%
36%
65%
62%
56%
52%
46%
46%
44% Buying childcare premises
Lack of support for small businesses
Finding suitable premises
Difficulties in getting loans
Time it takes to fill up places
Converting or adapting premises
Buying equipment
Day nurseries Out of school clubs
Figure 3.1: Obstacles to starting up new provision
Source: Callender, The Barriers to Childcare Provision, DfEE RR231, 2000.
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equipment (49 per cent). The research dates from before the switch to Office forStandards in Education (OFSTED) registrationand inspection, thus the reference to localauthorities. However, this highlights howimportant it will be to achieve an appropriatebalance on regulation to ensure children areprotected without holding back growth inthe sector.
For all types of provision, the “time it takes to fill up provision” featured in the top threeobstacles to start-up. This reflects thefinancial difficulties childcare providers arelikely to face in the early years of operation. It takes time to market services and becomeknown to local parents, and so it takes timeto fill places. Parents are also loath to changetheir childcare provider once a child hassettled, meaning that new providers will taketime to develop a customer base.
These difficulties mean that nurseries and out of school clubs may need to borrow tocover losses in the first one or two years ofoperation. Repayments for this borrowing willaffect later financial results.
Childcare availability is hampered – particularlyin low income areas – due to sustainabilityproblems for childcare providersHowever, the financial difficulties faced donot stop after the first couple of years ofoperation. Childcare is inherently expensiveto provide, and many of the costs faced arefixed costs. This means providers find itdifficult to react quickly to changes incircumstances. In turn, this means that smallchanges in conditions can lead to significantchanges in financial performance.
A key driver of financial performance isoccupancy. Just a few children not taking uptheir places can change a break-even position
into a significant loss. The cost base ofproviders tends to be largely fixed with staffcosts representing over 60 per cent of thetotal, meaning that providers cannot quicklyadjust to occupancy changes. This wouldmean that a relatively small change inoccupancy, for example from 90 per cent to85 per cent (just two or three children),could turn a nursery into a loss-makingbusiness.
Many providers take a threefold approach tosolving these problems:
• charging high fees to cover potentialdownturns;
• differentiating the fee structure, charginghigher fees to some parents and lower feesto others to try to maximise occupancyand revenue; and
• securing long-term commitments fromcustomers, through contracts withemployers or by asking parents to makepayments up front.
This approach is difficult in poorer areas,where the fee structure as a whole tends tobe set at a lower level (see Figure 3.2). Andwith some parents moving in and out ofwork, it is not possible to ask for significantpayments up front, making the providermore vulnerable to future occupancychanges. Providers looking to set up in lessaffluent areas face greater difficulties thanthose elsewhere – helping to explain thefewer places available in deprived areas.
Providers in deprived areas face three areas of difficulty:
• accessing capital to buy premises indeprived areas (a particular problem sincelenders tend to be concerned over resalevalue);
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• difficulty in covering losses in the first yearsof operation through an expectation ofprofit in later years as fees will need to bekept low; and
• ensuring ongoing sustainability,particularly if occupancy fluctuates. In turn, this last point affects access to capital.
The use of schools for childcare settingscould help reduce barriers to starting upprovision – including improving sustainability.This is discussed in more detail in Chapter 5.
Current regulations look unlikely to be holdingback growth in places, but Government mustkeep a close watch on their impactThe current registration and inspectionregime (the National Standards for Childcare)has been in place since September 2001.It replaced a system where local authoritiesset their own requirements for registrationand inspection, leading to great variations instandards across the country, thereby limitingworkforce movement and depressing market
growth. The Department for Education andSkills (DfES) is committed to reviewing theNational Standards with OFSTED next yearand will examine the extent to which theregulations may deter market growth. Giventhat regulation can have a significant effecton the market, it is important that the impactof regulation on providers continues to bemonitored regularly. Wherever possible, anyadditional burdens on providers must be avoided.
In terms of provider economics, one aspectof regulation that drives a significant elementof the costs is the staff/child ratios. In termsof business (rather than child-centred)regulations, providers tend to see thedisparity in business rates between childcaresettings and schools as the most problematicelement, along with local planningguidelines. However, whilst there is merit inaddressing these factors, these do not appearto be major barriers to growth. Moreimportant is to address sustainability issuesand issues around access to capital.
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Deprived ward averageNational average
ChildmindersOut of school careSessional daycareFull daycare
106.3997.43
26.11 21.73
39.9235.47
96.9588.67
Figure 3.2: Fees tend to be lower in deprived areas (average weekly fee, £)
Source: DfES analysis of 85 EYDCP audit returns
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3.1.5 The childcare workforce
Action will be needed to ensure that thechildcare workforce does not act as a brakeTo support a full choice of different provision,issues around the childcare workforce willneed to be addressed, including the declinein childminder numbers, both throughcurrent initiatives and from new approaches.From 2001 to 2006, it is estimated that anannual growth rate of around 8 per cent isrequired. On a general level, this looksachievable as it is in line with workforcegrowth over the last few years. But, ascompetition for the same set of workers lookslikely to intensify, particularly across publicservices, this will remain a real challenge.
There is evidence that the workforce couldact as a constraint on the growth of thechildcare sector. Half the nurseries and out ofschool clubs interviewed as part of researchon the workforce reported problems in fillingstaff vacancies in 2000/01. Some 23 per centof nurseries and 16 per cent of out of schoolclubs had vacancies in spring 2001.19
A survey of nursery workers found that two-thirds of nurseries had faced recruitingdifficulties in 2001, with particular difficultiesin the North West, Midlands, London and theSouth East.20
Evidence suggests that, at present, theproblem is focused on getting enoughworkers into the sector, rather thandifficulties in getting qualified workers. Whereproblems were reported, childcare employerswere almost twice as likely to mention ageneral lack of applicants as opposed toshortages of qualifications or experience.21
Significant growth has been experienced inthe childcare workforce in recent years.Between the 1998 and 2001 childcareworkforce surveys, some 6.6 per cent annualgrowth was recorded overall (see Table 3.2).
The main area of workforce growth has been in nurseries and out of school clubs.Childminder numbers have continued adecline begun in 1996. This trend is ofparticular concern, given that childmindersrepresent a particularly flexible form ofprovision. Childminding may also prove an important route into other parts of thechildcare workforce.
DfES has run a successful recruitmentcampaign. However, continuing action willbe needed to ensure that the workforce canbe expanded as required. Public sectoremployers will be looking to recruit largenumbers of individuals – as nurses, teachers,
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19 Childcare Workforce Surveys 2001: Overview, DfES, April 2002, p.20.20 Income Data Services survey, published March 2002. Quoted in Children’s Nurseries: UK Market Sector Report 2002, Laing &
Buission, 2002, p.54.21 Childcare Workforce Surveys 2001: Overview, DfES, April 2002, p.20.
1998 2001 CAGR* 1998–2001
Nurseries 43,080 94,924 +29.8%
Playgroups 76,880 79,800 +1.3%
Out of school 13,080 28,126 +29.1%
Childminders 93,300 72,300 –81.%
Total 226,340 274,520 +6.6%
* Compound annual growth rate – a measure of growth per year
Source: Childcare Workforce Surveys 2001: Overview, DfES, 2002, p.12
Table 3.2: Numbers of childcare employees
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health care assistants and social carers. Someof these workers are likely to come from asimilar pool to people who might join thechildcare sector. Childcare wages are lowrelative to other occupations – includingdomestic cleaners and checkout operators. As the labour market tightens, recruiting asufficient number of workers may becomemore difficult.
The new home childcarer scheme willaddress some of the gaps in current provisionby registering carers to take care of childrenin their parents’ homes. This shouldparticularly help shift workers and parents ofchildren with disabilities. It will, however, beimportant to ensure the criteria foracceptance as a home childcarer are not setat an unnecessarily high level.
One important potential source of workers is the informal sector. Informal carers play a major role in providing care, and inaddressing key gaps in formal childcare, and could be encouraged to becomechildminders or home childcarers.
In addition, as with all the caring professions,it will be desirable to encourage more meninto what is currently a female-dominatedsector.
The “climbing frame” of qualifications forworking with children should continue to bedeveloped, to allow for both vertical andlateral career progression by all childcareworkers including childminders. The aim is toencourage workers to progress within thesector, rather than looking outside the sector,as well as improving the quality of theworkforce overall. The new FoundationDegree for senior practitioners is animportant step forward. Children’s centreswill also have a key role to play as traininggrounds for senior childworkers, in allowing
changes across traditional occupationalboundaries (for example, early education,playwork, social care), and in providing thepotential for upward progression. Additionalflexibility will be allowed by schemes for theAccreditation of Prior Learning (APL) and themapping of other EU countries’ qualificationsagainst their UK equivalents.
3.1.6 Employers
Employers could do more to help with childcare,and there is a strong business case for them todo soThe National Childcare Strategy highlightedthe fact that employers “have a vital role toplay in delivering the strategy”.22 Efforts toincrease their involvement have so far metwith limited success.
Just 12 per cent of employers provideinformation to their employees about localchildcare provision; 2 per cent provideworkplace crèches and 1 per cent subsidisenursery places. Public sector employees aremore likely to receive help with childcarethan employees in the private sector. Fifty-three per cent of public administrationestablishments and 48 per cent of otherpublic sector organisations provided someform of childcare facility. By contrast, 26 percent of employers in the sample providedworkplace counselling and stressmanagement advice and 24 per cent ofemployees in the survey said their employerallowed flexi-time working. Over 90 per centof employers agreed that “people work bestwhen they can balance their work with otheraspects of their lives”.23 Indeed, a recentDaycare Trust/ BUPA survey found that “thevast majority of [large] employers are nowdelivering flexible working arrangements,and most feel likely to develop flexibleworking further in the future”.24
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22 Meeting the Childcare Challenge, DfEE, 1998.23 The Work-Life Balance 2000 Baseline Research, Institute for Employment Research, DfEE, November 2000.24 The Big Employers Childcare Survey, conducted for the Daycare Trust and BUPA by MORI, May 2002. Sample of 104 employers, each
with more than 750 employees working in the UK.
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Childcare assistance is one of a range ofmeasures employers can adopt to help theiremployees balance work with the otherdemands on their lives and to attract newrecruits. Most of the evidence for thebusiness case for work-life balance policiessuch as childcare assistance arises fromindividual case studies. However, in theirreview of the literature, Shirley Dex and FionaSchiebel found “a sizeable body of studies,taking different approaches, but all findingthere were considerable business benefitsfrom adopting [work-life balance] policies”.They concluded “it is certainly worthorganisations of all sizes taking a serious lookat the business case for [work-life balance]policies and calculating the costs and benefitsin their own case.”25 Barring the provision ofinformation, which is of low or no cost to theemployer, employers are most likely toprovide any childcare assistance to theiremployees where they can see a clearbusiness case for doing so.
The Daycare Trust/BUPA survey26 found that aproportion of large employers (750 or moreemployees) now offer workplace nurseries(30 per cent) or out of school care (35 percent); however, these are still the minority.The survey also found that most of the 104
large employers are aware of problems theyface due to childcare problems among staff,including inability to work late hours whenrequired (70 per cent) and absenteeism (66 per cent).
But the business case is also influenced by thetax positionAny costs of childcare support that anemployer makes available for employees aretax deductible for the employer as they areconsidered part of the cost of employingstaff. Employers only bear a NationalInsurance Contributions (NICs) liability wherethey pay cash allowances to employees or dosomething which has the same effect, forexample settling an employee’s childcare billfor them where the employee has contracteddirectly with a childcare provider.
Employees face a tax liability if employersprovide financial help with childcare unlessthey are using places in a workplace nurserythat meets the criteria (see Box 3.1). Theworkplace nursery exemption was introducedin 1990 and exempts employees from tax(normally payable on benefits in kind28).Subject to the Upper Earnings Limit,employees face a NICs liability where theyreceive cash allowances from their employer,
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Box 3.1: Workplace nursery scheme
The exemption for workplace nurseries27 was brought in as an administrative easementbecause it was proving difficult to calculate the benefit to employees of places at workplacenurseries. In recognition that some employers preferred to engage third parties with moreexperience in childcare provision, allowances were made to cover such arrangements solong as the employer retained a sufficient level of financial involvement and managerialresponsibility. Valuation is not difficult when childcare is being purchased externally, as allcosts are wrapped up into one sum charged by the third party childcare provider. So,employees incur a tax liability when the schemes are provided externally, or where theworkplace nursery does not fulfil the requirements of the tax exemption.
25 Shirley Dex and Fiona Scheibl, “Business Performance and Family Friendly Policies”, Journal of General Management, vol.24 No.4Summer 1999, p.34.
26 The Big Employers Childcare Survey, conducted for the Daycare Trust and BUPA by MORI, May 2002.27 As defined in Section 155A Income and Corporation Taxes Act 1988.28 Employees earning under £8,500 p.a. (unless they are directors) face no tax on benefits in kind.
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or contract directly with a childcare provider.Where the employer contracts with thechildcare provider, the employee faces noNICs liability.
The workplace nursery exemption was drivenby operational difficulties in valuation andintended to remove a barrier to introducingworkplace nurseries. It was not designed as atax incentive to encourage employers todevelop workplace nurseries. Employers mayfind that the nature of the currentexemptions makes it hard, in some cases, to make the business case for childcareprovision. The requirement for a degree ofmanagerial involvement in workplacenurseries to qualify for the exemption candeter some small businesses.
Employees will have to pay tax on employer-provided childcare financial support apartfrom where qualifying workplace nurseriesare provided. This means that employers maynot want to support or provide wrap aroundcare, childminder networks or holiday playschemes, for example, even though thesemay suit some of their employees’ needsbetter than workplace nurseries.
Where employers provide childcare vouchers,these are exempt from NICs (for bothemployers and employees) unlike all othernon-cash vouchers, which are treated as“quasi” cash payments. Some employers saychildcare vouchers are difficult to administerand unpopular with employees and childcare providers.
3.1.7 Information
It is difficult for parents to find childcare andjudge its qualityParents do not have enough informationabout the quality and availability of childcare,and a lack of information hinders the
development of the market. Despiteinvestment in providing information aboutchildcare through local Children’sInformation Services (CIS) covering everylocal authority area and national vehicles(kiosks, the Childcare Link website andtelephone helpline29), the evidence shows:
• almost half of all parents are not satisfiedwith the information available aboutchildcare;
• parents know little about childcare orwhere to find information on it. Accordingto research30 46 per cent of all parents useno information and 38 per cent rely onword of mouth;
• only 3 per cent of parents use their localCIS and the quality and accuracy of theseservices vary – about a fifth are poor;
• in 2002, only 1 per cent of parents hadused the Childcare Link website to accessinformation. DfES statistics show thatabout 94,000 people used the site inDecember 2001 and that usage isincreasing each month; and
• data transfer problems between OFSTEDand local services have affected the qualityof information provided locally andthrough national outlets.
In addition, research carried out for DfES toinform a communications strategy shows thatthe complexity of the National ChildcareStrategy, and the number of similar butdifferently named and branded initiatives(Sure Start, Early Excellence Centres,Neighbourhood Nurseries), overcomplicatethe message the Government wants parentsto hear.
There is currently no clear, objectiveinformation available to parents to help themto judge the quality of different childcare
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29 The Childcare Link website is funded by the Department for Education and Skills, the Scottish Executive, and the National Assemblyfor Wales. The website address is www.childcarelink.gov.uk and the Childcare Link freephone number is 08000 960296.
30 Woodland, Miller and Tipping, Repeat Study of Parents’ Demand for Childcare, DfES, 2002, p.167.
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providers. Difficulties in finding informationabout childcare and assessing quality ofprovision, and the lack of a recognisablechildcare brand, are likely to suppressdemand for different types and qualities of childcare and may drive high qualityproviders out of the market.
Working with partners including theDepartment for Work and Pensions (DWP),Office for Standards in Education (OFSTED)and the Daycare Trust, DfES has preparedproposals to improve the extent and qualityof information available to parents and alsoto streamline the flow of managementinformation between Early YearsDevelopment and Childcare Partnerships(EYDCPs) and DfES. The proposedenhancements to the existing service willaddress a number of the findings from theevidence in improving information forparents, providers and Government. DfESand DWP should ensure that the level andtype of service provided meets the particularneeds of lone parents. OFSTED has alsodrawn up protocols for exchanginginformation with CISs and the nationalinformation channels.
3.1.8 Informal care
Understanding the role of informal care Informal care plays a major role in thechildcare system. In particular, it is critical infilling gaps left currently by formal care andsome parents will always have a preferencefor using informal care.
There is currently evidence to show:
• the extent to which informal care is used:36 per cent of parents used informal carein the past week, and 72 per cent hadused informal provision in the past year;31
• that informal care plays an important rolein plugging the gaps left by formalchildcare;
• parental preference for informal care; and
• that lone parents tend not to trust formalcare.
However, the evidence base lacks materialon:
• the outcomes of informal care for the childand for parents using it;
• the extent to which the cost of informalcare is a barrier to parental employment;and
• whether paying informal carers would leadto an overall growth in available childcare.
Such evidence, in the context of an overallassessment of the performance of childcarepolicies, would inform discussion aboutwhether or not the Government shouldintervene in the informal market and, if so,how. This might include further evidencefrom the childcare voucher scheme inNottinghamshire, which has been runningsince 1992, and the support for family-basedcare provided within the New Deal inNorthern Ireland.
3.2 The 2002 Spending ReviewThe new vision directly addresses theproblems exposed by the evidence, especiallyin creating and sustaining new places tomeet Government targets, including inrelation to lone parent employment and childpoverty.
3.2.1 Providers and placesOverall, the 2002 Spending Reviewsettlement will directly support the creation
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31 Woodland et al., Repeat Study of Parents’ Demand for Childcare, DfES, 2002, p.35.
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of at least 250,000 childcare places; onceturnover of places is taken into account, thiswill mean the creation of 160,000 net places.Taking account of progress to date, thisshould ensure by March 2006 the creation ofenough childcare places to help over 2 million children (1.25 million takingturnover into account). This will exceed thenumber of places that are estimated to berequired to meet key Government targets.
Provider supportThe settlement will make available time-limited support to help providers overcomethe difficulties in accessing start-up capitaland covering revenue costs during the start-up period. In this way, provision has beenmade available to ensure that 250,000childcare places are created by 2006 in orderto progress towards the Government’slonger-term vision of every parent being ableto access affordable, good quality childcare.
Funding has also been made available for theintroduction of a sustainability grant toensure that childcare providers in the mostdeprived areas do not fail as a result oftemporary fluctuations in occupancy. Wherepayments are made to sustain provision,empty places will be offered, via the childcareco-ordinators being set up in every JobcentrePlus, on a short-term basis and free of chargeto those who are seeking to move or whohave recently moved into work under theNew Deal. For example, such places could beused to enable people to attend interviews,or to provide emergency cover in cases ofchildcare breakdown for those who haverecently started work.
It will also be important for Government to explore ways of increasing awarenessamongst childcare providers of theDepartment of Trade and Industry’s (DTI’s)Small Firms Loans Guarantee Scheme and
other mainstream business support services.The Small Business Service, in particular, willhave a vital role to play in promoting thechildcare market, through support such asthe Small Firms Loan Guarantee Scheme andthe Phoenix Fund.
Childminders also have a crucial role to play.Childminder grants will be extended, andchildren’s centres and schools will take on a greater role in building networks withlocal childminders.
Funding is also being made available for anexpansion of business support to childcareproviders. This includes resources to ensureproviders are given greater support throughthe process of identifying and applying for funding.
WorkforceThe settlement included provision to supportthe training and development of children’scentre leaders, managers and staff. Children’scentres will have an important wider role toplay as training grounds for senior child-workers, in allowing changes acrosstraditional occupational boundaries (forexample, early education, playgroup, socialcare), and in providing the potential forupward progression. Recruitment campaignswill be continued, with some elementsfocusing on under-represented groups, such as men and ethnic minorities.
Making the best use of schoolsThere are already plans to expand the use ofschools. The role that schools can play inincreasing the availability of childcare and inacting as a hub for childcare services will beintegrated into the development of extendedservices within schools. The Education Actwill remove barriers to the provision ofchildcare and other services in schoolpremises. It will be important that the
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removal of such barriers makes a realdifference to the ability of schools to offermore childcare. The role of schools isdiscussed in depth in Chapter 5.
Involving employersGovernment will continue to promote thebusiness case for various forms of childcareassistance and to spread best practice in thefollowing ways:
• The Women and Equality Unit (WEU),DWP, Jobcentre Plus and DTI will continueto encourage employers to help theiremployees with childcare through DTI’sWork-Life Balance Campaign.
• Working with DTI and DfES, the InlandRevenue (IR) will ensure the existing taxrules on employer support for childcareand advice about salary sacrifice schemesare both consistently interpreted andwidely understood by tax inspectors,nursery providers and employers, forexample through DTI’s Work-Life Balance Campaign.
• DTI, DfES and IR will work with Employersfor Childcare to produce templates foremployers to calculate the business casefor their own involvement, including theclearest possible explanation of the currenttax and NICs reliefs.
• IR will continue to monitor theeffectiveness of current tax exemptions.
• The number of employers who provideinformation on childcare to theiremployees will be increased. This could beachieved by continuing work by DTI andDfES to publicise the free availability of theChildcare Link website for use onemployers’ intranets and to explain thebusiness case for childcare support toemployers and local organisations involved
in improving business performance, forexample Business Links.
Managing the regulatory aspectsThe review of regulations in 2003 will be used to assess whether regulation issuppressing growth in the sector. TheGovernment will keep a close watch on theimpact of regulation on providers and willavoid wherever possible any additionalburdens in the future.
3.2.2 Maximising parental choiceThe measures to stimulate growth in thechildcare market will help ensure thatchildcare is available and accessible for parents.
The Government is also committed toproviding financial help to lower and middleincome parents for whom the cost ofchildcare is a barrier to work. The childcaretax credit component of WFTC and theDisabled Person’s Tax Credit (DPTC) providesworking parents with generous supporttowards the costs of approved childcare. Thisassistance will continue – in an improved,more flexible form – as part of the WorkingTax Credit from April 2003, and theGovernment is committed to keeping thelevel of support under review.
It is also important that childcare informationfor parents is enhanced. Funding has beenmade available to support the expansion andenhancement of local Children’s InformationServices and the national Childcare Linkservice, and for a national advertisingcampaign to promote awareness amongstparents and the development of a clearer brand.
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Summary of conclusions
The 2002 Spending Review settlement has been built on the work andrecommendations of the inter-departmental childcare review.
The Government’s vision is of a childcare market where every parent canaccess affordable, good quality childcare. In line with this, the settlementhas provided targeted support for a number of measures to address thoseareas of market failure identified in the inter-departmental childcarereview, including support for the creation of over 250,000 childcare placesby March 2006.
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4. MEETING THE NEEDS OF CHILDREN: ENHANCING CHILDOUTCOMES
Summary
Key conclusions of the review
For pre-school children:
• The evidence supports investment in good quality, integrated childcarefor pre-school children in low income families.
• There is a double dividend for Government of intervention supportingboth child development and employment objectives.
• The evidence also suggests that there are long-term educationalattainment outcomes, which persist throughout the child’s schoolcareer.
• There are also other benefits: reduction in crime rates, improved healthoutcomes and attitudinal outcomes (including resilience and aptitudefor learning).
For older children:
• There is evidence that out of school care and study support havepositive effects, particularly for disadvantaged children.
• Research from the USA shows that social gains of an extended use ofschools approach may include positive attitudes to learning, improvedbehaviour, better school attendance, reduced truancy and better futureemployment.
• Finally, holiday schemes can reduce crime levels.
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4.1 Conclusions from thereview
The review undertook a comprehensive andsystematic review of the available evidence on the complete range of early years andchildcare provision. This literature review was complemented by interviews with keyacademics and practitioners.
4.1.1 The evidence on pre-schoolchildren
There is evidence that certain forms of childcarecan improve educational attainmentThere is strong evidence that certain types ofearly years education and childcare can playan important role in raising cognitive andsocial/behavioural outcomes and therebyincrease the ability to learn.
The best available UK evidence, the EffectiveProvision of Pre-School Education study(EPPE), has found that certain types of pre-school provision32 between 3 and 5 years
result in higher attainment at the start ofprimary school. This result applies to allchildren, irrespective of socio-economicbackground.
Cognitive indicators measured when a childenters school often predict how well thechild will do as they progress through school.It should be noted, however, that few studiesof the effects of childcare programmes haverun for long enough to provide directevidence of increased educational attainmentbeyond the age of 11. In the researchsurveyed, three US programmes (Perry Pre-School, Caroline Abecedarian, and ChicagoChild-Parent Centres) have found increasededucational outcomes persisting beyond theage of 11, while some research on the USHead Start programme has found that, wherelater experiences are particularly challenging,improvements can disappear by that age.33
Improved educational attainment is alsosupported by US findings that interventionscan reduce incidences of grade repetition(where children have to repeat a year due to
32 The provision for which this proved to be the case were LEA nursery schools, nursery classes and “combined centres”, 80 per cent ofwhich are Early Excellence Centres, and all of which offer more or less integrated services (i.e. the approach integrates education,care, family support and health). The combined centres result in the best outcomes.
33 The psychologist Michael Rutter notes that, although early childhood interventions can foster “resilience” in children by encouragingpositive coping mechanisms, they do not “inoculate” children against later adversity: lasting effects are dependent on the earlyexperiences laying the ground for later good experiences.
In addition to these specific conclusions, the evidence supports thecontinued breakdown of the barriers between education and care foryoung children. The vision for an expanded role for schools in providingchildcare is discussed in Chapter 5.
The 2002 Spending Review
The Spending Review provided funding to support the longer-term visionof establishing children’s centres for pre-school children in every one ofthe 20 per cent most disadvantaged wards. This will be achieved througha steady roll-out of children’s centres, based on a tightly defined core offerand building out of existing provision. By March 2006, at least 650,000children will be covered by children‘s centre services.
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poor performance), and result in higher ratesof completing high school education.
Evidence also shows that good quality earlyinterventions can reduce the likelihood thatchildren will require special educationalintervention: three US longitudinal studieshave found reduced levels of specialeducational statementing for participatingchildren.
There is consistent evidence that quality ofprovision, and particularly well-trained staff, is critical to improvements for disadvantagedchildren. There is also evidence that poorquality provision can be damaging to this group.
Certain forms of childcare can improve outcomesother than educational attainmentIt is important to emphasise that certain typesof early years education and childcare can alsobe central to improving outcomes other thaneducational attainment. These includebehavioural and attitudinal factors, incidenceof criminal behaviour, reductions in healthinequalities, and reduced demand on socialservices in the future.
Early evaluations of the Early Excellence Centreprogramme have found evidence of improvedbehaviour in participating children, while two US programmes have found thatimprovements have persisted over five years so far.
Behavioural and attitudinal factors have been argued to be more likely to last thaneducational uplifts. These factors (for example,resilience, task orientation, aptitude forlearning and self-esteem) may have significanteffects on later life chances (not least byincreasing the likelihood that the child stayslonger in mainstream education).
Some forms of childcare provision can have asignificant effect in preventing crimeA US study34 concluded that “Governmentcould greatly reduce crime and violence byassuring families access to school readinesschildcare programmes”. The study quotedthat, in the Perry Pre-School programme, thecontrol group (which did not participate inthe programme) were five times more likelyto become “chronic lawbreakers” inadulthood. Steven Barnett has estimated thatthe Perry Pre-school programme produced anet present value of over $70,000 perparticipant in savings from reduced crimealone. In addition, the Syracuse UniversityFamily Development programme concludedthat failing to provide babies and toddlerswith good quality, integrated provisionresulted in the multiplication of the risk thatthey would become delinquents as teenagersby ten times. A third study showed a control group to be 70 per cent more likely to be arrested for a violent crime by the age of 18.35
It is worth noting that, as the total cost ofcrime to England and Wales in 1999/2000 isestimated at around £60 billion, even amodest percentage reduction would have alarge impact.
Some forms of childcare provision cancontribute to reducing health inequalitiesA significant association has beendemonstrated between educationalattainment at age 15–16 with both coronaryheart disease and infant mortality. Given theconnection between school readiness andeducational attainment at 15–16, effects ofgood quality, integrated childcare provisioncould also contribute to reducing health inequalities.36
34 Newman, Brazelton, Zigler et al., America’s Child Care Crisis: A Crime Prevention Strategy, January 2000.35 Chicago Child Parent Centres, quoted in America’s Child Care Crisis, ibid.36 Inquiry Report, Independent Inquiry into Inequalities in Health, 1998 (Chairman: Sir Donald Acheson) identified education as a key
influence for reducing inequalities in health.
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Parental outreach as part of an integratedearly years approach in deprived areas willalso have an impact on health inequalities byhaving a positive effect on such aspects ofhealth as dietary patterns, which areestablished in early childhood.
Other outcomesUS evidence has also demonstratedsignificantly reduced demand on socialservices from programme participants, bothfrom the children’s parents and the childrenthemselves as they grew up.
It is clear that childcare contributes to thetackling of child poverty by enabling theirparents to go out to work and lift their familyout of poverty. These issues are covered inChapter 3.37 Beyond employment effects,increased access to good quality, integratedchildcare may also help to break inter-generational cycles of poverty. As notedabove, disaggregating the effects on povertyof simply increasing income from the effectson poverty of good quality, integratedchildcare is extremely difficult, and it isrecommended that further research shouldbe carried out on this issue to inform futurepolicy-making.
In addition, in areas where there appears to be little interaction between those fromwhite communities and those from ethniccommunities, childcare provision can help to bring children from different backgrounds together – thus buildingcommunity cohesion.
Benefits are disproportionate to deprivedchildren and those from ethnic minoritiesThere is also evidence that there may bedifferential impacts of good quality provisionaccording to socio-economic status. EPPEfinds that at school entry, the impact of thefamily’s socio-economic status, low birth
weight, and the home learning environmenton the child’s readiness to learn hasdecreased since entry to pre-school. Inaddition, due to generally higher parentalengagement with their children’s educationaldevelopment, it is almost certainly the casethat non-deprived children would have madesignificantly greater gains than deprivedchildren in the absence of provision for eithergroup. In addition, there is evidence thatcentres with a mix of children from better off and deprived backgrounds improves the outcomes of those from deprived backgrounds.
Good quality early intervention can also helpto prepare children with a poor grasp ofEnglish for schooling. With better languageskills on entering school, children are likely tohave higher levels of attainment over theirschooling years.
For non-cognitive gains, there is muchanecdotal evidence that social andbehavioural gains are greater for deprivedchildren, although social and behaviouralpredictors are weaker than cognitive ones.Finally, there is evidence that deprivedchildren are much more sensitive to thenegative effects of poor quality provision.EPPE also finds that gains of good qualitypre-school disproportionately benefit childrenfrom ethnic minority backgrounds.38
Finally, it should be noted that the negativeeffect of bad quality childcare can be far-reaching. Substandard care can placechildren at risk for harm, potentially withlong-lasting consequences.
In order to realise these outcomes, the type and characteristics of the intervention are very importantIntegration. An integrated approach is onewhich ensures the joining up of services anddisciplines such as education and care, family
37 See also HM Treasury Pre Budget Report 2001, Tackling Child Poverty.38 This does not hold true for those of White European origin, (e.g. Bosnian, Albanian).
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39 Receptive language ability was measured using the “Peabody Picture Vocabulary Test-Revised” (PPVT-R; Dunn and Dunn, 1981).Thinking and attention skills were rated using the “Classroom Behaviour Inventory” (CBI; Schaefer, Edgerton, & Aaronson, 1978).
40 Sylva and Colman, Pre-School intervention to prevent behaviour problems and school failure, 1998.
support and health. Early evidence from EPPEsuggests that integration is a key factor indetermining good outcomes. Aside fromEPPE, there is little evidence available on theimpact of non-integrated forms of childcare(with little educational content or not part ofa more complex package of family support –thus including informal care).
Quality. In a variety of studies it has beenshown that, on a range of indicators, goodquality childcare leads to better educationaloutcomes. Figure 4.1 shows results from theUS Cost, Quality, and Outcomes Study,showing that good quality, early yearseducation and childcare had a greater impacton language skills.
Clearly, quality is a multi-dimensionalconcept, and a wide variety of factorsinteract to determine the quality of carereceived (many of which relate to aspectsother than education). However, evidencefrom the EPPE study shows that certainaspects of quality are particularly importantfor good outcomes. Some of these aspectsneed not be expensive to provide. Theseinclude:
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Source: Costs, Quality and Outcomes Study, 1999
Figure 4.1: Good quality early years education and childcare has a greater impact onlanguage skills39
a) Teaching style and type of curriculumAn approach which emphasises child-centredactive learning has been shown by EPPE tobe strongly associated with the developmentof positive learning outcomes. Sylva and Colman report that adherence to acurriculum based around such an approachhelps limit behavioural/school problems.40
EPPE identifies the following practices asamong those most important:
i) the provision of teacher-led, curriculum-focused, group work;
ii) providing tasks and an environment thatare appropriately challenging forchildren, constantly adjusting adultinterventions to meet their current needsand abilities, and open-endedquestioning;
iii) involving parents to make a link betweenthe learning experiences of children athome and at pre-school;
iv) working at a level appropriate to thechild’s stage of development, and theuse of systematic observation andrecord-keeping; and
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v) giving the children feedback they willunderstand.
b) Combinations of staff which include somequalified teachersThe importance of teaching style clearly hasimplications for the level of qualifications ofthose working with children between theages of 3 and 5. However, it should be notedthat it is not necessary for all staff interactingwith children to be qualified teachers; only aproportion. EPPE findings show a strongrelationship between the childcare/educationqualifications of the centre manager and thequality of provision in settings, in particularto the quality of teaching style andcurriculum in literacy, maths and science. A final point on qualifications is that it isparticularly important that there is capacity inthe centre to identify special needs at anearly stage.
c) Good managementThe importance of centre management is aconnected concept: centre managers provideleadership and set the culture and orientationof the organisation. EPPE has identified theimportance of good management (see alsoprevious paragraph). Managing integratedfacilities and staff from multiple disciplinesand agency backgrounds is a complex jobwhich requires a high calibre individual. As Bartram and Pascal comment, “Theserelatively small settings have [rapidly]expanded and diversified to have more incommon with small high schools, some withstaff of 70 or more”.41
d) Effective engagement of parents in theirchildren’s developmentIn particular, the centrality of parental skillsand home environment to good outcomesmeans that active engagement with parentscan be crucial.42 Good parenting practices aresome of the most important protective
factors in promoting optimum earlychildhood development. The importance ofthe relationship between babies and theircaregivers, and the fact that specificstimulation, such as talking and play, arecritical at this stage for the development oflanguage and cognitive skills shows thatengagement with parents from birth onwardscould be essential.
Box 4.1: National Standards forunder eights day care andchildminding
Recognising the role of good quality,early years provision to child outcomes,the Government announced in 1999that, in England, day care providers andchildminders caring for children underthe age of 8 years old would beregulated by OFSTED, bringing togetherthe regulation of childcare and early yearseducation.
The National Standards represent abaseline of quality below which noprovider may fall. They are also intendedto underpin a continuous improvementin quality in all settings. The 14 NationalStandards each describe a particularquality outcome, and are accompaniedby sets of supporting criteria givinginformation about how that outcome isto be achieved. Aspects of provisioncovered by the Standards include:physical environment, equipment andsafety, health, behaviour, child protectionand working in partnership with parentsand carers.
For more information on the NationalStandards, see www.ofsted.gov.uk
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41 Bartram and Pascal, Early Excellence Centre Pilot Programme, Phase 2 Annual Evaluation Report, October 2001.42 EPPE shows that the home learning environment has a greater effect on children’s cognitive development than parental social class;
i.e. “it’s not who you are, it’s what you do”. EPPE finds that those pre-school centres which have the greatest effect on children’sprogress had higher levels of parental involvement.
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Dosage. The amount of time the childspends in education and childcare is also an important determinant of outcomes.Evidence from EPPE suggests that, betweenthe ages of 3 and 5, exposure to educationprovision over extended periods of time,rather than short or inconsistent exposure,leads to better outcomes. Another way ofputting this is that EPPE has shown that moremonths of attendance during the 3 to 5 yearold period is related to better attainment at 5. There is no difference in outcomes forchildren who attend full or half-time. EPPEalso finds that the optimal time for startingearly years education is between 2 and 3:there appears to be no added advantage tostarting pre-school prior to the age of 2. Thisis not to say that the first years of a child’s lifeare not crucial for later outcomes; theyclearly are. An infant develops the capabilityof controlling its own emotions before its firstbirthday, and a sense of secure attachmentbetween the baby and its primary caregiversis critical for good outcomes. However, thereis insufficient evidence to conclude that thisprocess is actively aided by group-based carefor babies.
The value of early interventions can be high,where the approach is integratedResearch has shown that the value of earlyinterventions can be very high, where theapproach integrates education, care, familysupport and health.
4.1.2 The evidence on older childrenFor older children, while it is clear that thebenefits from the good quality, integratedapproach outlined above would continue toapply, there is insufficient evidence thatbenefits would outweigh the investment of anintegrated, centre-based approach. However,there is evidence that out of school activitiesand care and study support have positiveeffects, particularly for disadvantaged children.
As discussed in Chapter 5, childcare for school-age children is also very important for parents,particularly mothers, and can assist in thejourney back to work.
Out of school childcare has an important role toplay in children’s learning and development US research has found links between school-age children’s non-parental after-school careexperience and the children’s later behaviouraland academic adjustment. These associationsheld even after earlier levels of adjustmentwere taken into account. More deprivedchildren in day care at age 5 had fewersubsequent behaviour problems and higherlevels of social competence than moredeprived children not in day care. Highamounts (defined as more than four hours perweek) of time where children have to look afterthemselves outside school between the ages of5 and 7 appeared to place them at risk foradjustment difficulties at the age of 11. Thisrisk was heightened for children alreadydisplaying high levels of problem behaviourprior to looking after themselves outside schooland for children not participating inextracurricular activities.43
This evidence suggests that out of schoolchildcare has an important role to play inchildren’s learning and development.
Study support can increase educationalattainmentResearch has found evidence that pupils whoparticipate in study support attached toschools do better than would have beenexpected from baseline measures in academicattainment, attitudes to school and attendanceat school. Study support appears to beespecially effective for students from ethnicminorities. When considering policy on thisissue, it is important to note that the researchemphasised that pupils will only use studysupport services if they are voluntary in nature.44
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43 Pettit, G.S. Laird, R.D. et al., Patterns of After-School Care In Middle Childhood: Risk Factors and Developmental Outcomes, 1997.44 Impact of Study Support, 2002, Department for Education and Skills.
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Evidence shows that extended services inschools could contribute to a wide range ofoutcomesResearch from the US shows that social gainsof an extended use of schools approach mayinclude positive attitudes to learning, improvedbehaviour, better school attendance, reducedtruancy and better future employment. The USFull Service schools programme also suggests
that the extended schools approach mayreduce likelihood of criminal or antisocialbehaviour in school-age children, build morepositive attitudes to citizenship responsibilitiesand have a positive impact on health andfitness for school-age children.
Box 4.2: Childcare for children with special educational needs (SEN)and disabilities
Just as with children without special educational needs or disabilities, affordable andaccessible childcare is important to enable these children to fulfil their potential and meettheir needs. It is also crucial in enabling their parents to access employment and trainingand to help reduce child poverty. Families which include a child with a disability are morelikely to live in poverty, while the carers of these children are seven times less likely toaccess the workforce. However, there are numerous current problems with the provision ofchildcare for children with disabilities/SEN:
• The number of children with a disability and/or SEN is increasing.
• With some exceptions, there is little history of joined-up working in this area.
• Parents generally face a lack of provision or significantly higher costs.
• Information provision to parents is inadequate.
Following the Chancellor’s Budget statement, from April 2003 it will be possible for parentsemploying domiciliary carers in their homes, through approved agencies, to claim thechildcare tax credit. While this will help parents of children with a disability who use homechildcarers, more work needs to be carried out on addressing these issues.
This review has recommended that work is taken forward on this issue, to include allinvolved Government departments, local authority representation and the voluntary sector,led by the inter-departmental unit at the Department for Education and Skills (DfES). Such work might look at:
• a review of current provision, consideration of actual need/demand and how this mayevolve over the next few years, and therefore what the gap is;
• a systematic review of evidence on effective interventions and outcomes;
• a review of best practice; and
• policy recommendations, costings and a value for money analysis.
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Holiday schemes can reduce crime levelsIn England and Wales, 145 “Summer Splash”schemes were run throughout the schoolholiday period of summer 2001 for 13–17 yearolds in some of the most disadvantaged areas.The evaluation from these activity schemesshowed that crimes associated with youthoffending fell faster or increased less in“Splash” areas than in comparable high crimeareas: motor crime reduced by 11 per centcompared with an increase in high crime areasof 39 per cent; juvenile nuisance reduced byalmost 17 per cent; and drug offences reducedby 25 per cent.
4.1.3 Conclusions from the review of evidenceThe conclusion of the review of evidence was that the weight of evidence supports arationale for investment in good quality,integrated childcare for disadvantaged pre-school children. For such provision there is a double dividend to Government whereintervention supports both child outcomeand employment objectives.
In recognition of the fact that, while theweight of evidence clearly supports thesepolicy recommendations, the results of somestudies are mixed or not statisticallysignificant, it is recommended that a robustmonitoring and evaluation process is put inplace and that the evidence is reviewed in2006, again in 2010, and indeed that thechildren should be followed as they gothrough their school career and into adulthood.
4.2 The 2002 Spending ReviewThe 2002 Spending Review supported theneed to transform the childcare sector, sothat quality services are delivered in a moreintegrated way – better focused on the needs
of children and their parents, and in a waythat mainstreams the early lessons of Sure Start.
Pre-school childrenThe Spending Review provided funds tosupport the longer-term vision of establishingchildren’s centres for pre-school children inthe 20 per cent most disadvantaged wards.
While the precise size of and servicesprovided by each centre should be based on local need, all centres will provide a coreoffering that includes good quality childcarecombined with early years education, somehealth services, family support, parentaloutreach and a base for childminders.
It is important to be clear that the centreswill not just be about providing childcareplaces, but will also be about offeringintegrated services to families regardless ofwhether their children attend the centre forchildcare. This outreach role is crucial.Centres will also provide support for childrenand parents with special needs, includinghelp getting access to specialised services.
There will be a number of new centres, butthe majority will be developed from existingprovision: adding core Sure Start services toNeighbourhood Nurseries, attachingchildcare and early years education toexisting Sure Starts, and redesignatingexisting initiatives including relevant EarlyExcellence Centres and co-located SureStart/Neighbourhood Nurseries. In this way,government investment already made inthese programmes can be maximised.Ultimately, the objective is for existinginitiatives to be mainstreamed within a newand rebranded strategy for children.
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Older childrenWhile benefits from certain types of provisioncontinue to apply for older children, there isinsufficient evidence to say that the benefitswould outweigh the costs of such anapproach for older children. But theevidence that out of school activities and care
and study support have positive effects,particularly for disadvantaged children, andresearch from the US, shows that social gainsof an extended use of schools approach mayinclude: positive attitudes to learning,improved behaviour, better schoolattendance, reduced truancy and better
Box 4.3: Children’s centres core offer
Children’s centres will offer the following core services:
• good quality, early education combined with full day care provision;
• parental outreach;
• family support services;
• child and family health services, including ante-natal services;
• support for children and parents with special needs, including help getting access tospecialised services; and
• acting as a service hub within the community for parents and providers of childcareservices for children of all ages; offering a base for childminder networks and a link tolocal Neighbourhood Nurseries, out of school clubs, extended schools and the localChildren’s Information Service.
As the centre develops further, it will prove a flexible base upon which additional servicescan be added to the core offer. These should be developed following consultation with thecommunity, ensuring that the centre reflects the needs of its host community.
Examples of such additional services include:
• adult/family literacy programmes;
• adult vocational training;
• mobile crèches/playbuses;
• community cafés;
• Internet access points; and
• specific back-to-work programmes.
Ultimately, children’s centres will provide the focal point for rationalising a wide range ofexisting community-based initiatives, building vital links between education, employment,health and social services. For example, close co-ordination with Jobcentre Plus would helpjoin up the return to work with the childcare required.
Centres will also play a significant role in developing the childcare career ladder, providingchallenging managerial opportunities for experienced professionals to move into, andtaking a key role in training for the childcare workforce more generally.
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future employment prospects. The role ofextended schools is covered in Chapter 5,while the Spending Review conclusions onsupport for out of school clubs andchildminders are covered in Chapter 3.
Childcare for older children is also importantfor parents, and in particular mothers inhelping them to return to work. The issuesaround access to the right type of childcareand affordability are discussed in Chapter 3.
The theme of integration is important,especially where family support and healthservices can be provided or signpostedalongside childcare. Chapter 6 describes theimportance of integration of services inimproving the delivery of childcare services,and helping programmes and policies topractically interact and deliver for childrenand parents.
Summary of conclusions
The 2002 Spending Review settlement has been built on the work andrecommendations of the inter-departmental childcare review.
The Government’s vision is to transform the way services are delivered to ensure that, over time, the Government better meets the needs ofchildren and their parents, particularly for the most vulnerable, reflectingthe early lessons of Sure Start. The Government’s longer-term aim is to establish a children’s centre in every one of the 20 per cent mostdisadvantaged wards. This will be achieved through a steady roll-out ofchildren’s centres, based on a tightly defined core offer and building outof existing provision. By March 2006, at least 650,000 children will becovered by children’s centre services.
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5. A PARTICULAR ROLE FOR SCHOOLS
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Summary
Key conclusions of the review
The development of childcare in, or around, schools will help meetgovernment objectives to increase childcare places and provide widersupport for disadvantaged children. Schools could also provide anessential part of the childcare solution for many parents of school-agechildren. And where no children’s centre exists, extended schools couldtake on the role of childcare hubs in the community on a smaller scale.
Provision within schools, though not necessarily provided by the school,will also help to maximise the cost effectiveness of new investment tocreate places, by making better use of existing infrastructure and resourceswhilst also meeting the need for a mixed economy of provision. It will helpto promote the benefits of integrating care and education and enableprovision of childcare that will meet parents’ needs and preferences. It willalso provide opportunities to improve access to childcare for teachers.
There are a number of key issues which will be crucial to the success ofchildcare in schools:
• the levelling of the playing field – to ensure that all sectors haveaccess to schools;
• the role of the school as a hub in the community to provideinformation and co-ordination even if space is not available forchildcare on site; and
• the need for local support to ensure rapid roll-out and co-ordination.
These measures would be expected to have a major impact on theavailability of childcare in schools. To ensure that the measures do havethis impact, it would be sensible to review the provision of childcare in schools.
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5.1 The current positionSchools have the potential to play a majorrole in the delivery of childcare. With apresence in every community, schools oftenhave the capacity to provide childcare onsite, increasing the availability of childcare fordisadvantaged children and families, andpromoting out of school activities and studysupport. More childcare provided in andaround schools will play a major role inmeeting parental preferences and needs andso support the transition into work. Evenwhere schools do not have the physical spaceto accommodate childcare, they can still play a crucial role as a hub – providinginformation and acting as a signpost forparents and providers.
Schools have a particularly important role toplay in areas where there is a shortage ofhigh quality accommodation such asdisadvantaged communities and rural areas.These are also areas which are most affectedby market failure in the childcare system. Ajoint report by the Countryside Agency andNational Children’s Home (NCH) showedthat co-location of services is particularlyimportant in rural areas, with researchshowing that creative ways of deliveringservices in rural areas can make a majordifference to rural people.
5.1.1 The current role of schools in thedelivery of childcareSchools have traditionally played a significantrole in the development and delivery ofchildcare, although they have not been ableto act as childcare providers. Many childcare,out of school learning and family supportservices are already based in schools. Thereare approximately 25,000 primary andsecondary schools in England. 97 per cent45
of schools currently have out of schoollearning activities on site. 50 per cent of outof school childcare clubs are currently basedin schools, accounting for 65 per cent ofafter school clubs and 41 per cent of holidayplay schemes. 75 per cent of Early ExcellenceCentres have grown from schools (57 percent have grown from nursery schools) andup to half of Neighbourhood Nurseries areexpected to be in schools.
However, there is also some evidence thatsome sectors do not gain equal access toschool premises. According to the NationalDay Nurseries Association, only 5 per cent ofday nurseries are based in schools. It will beimportant to ensure that all sectors have accessto schools in the development of childcare aspart of an extended schools programme. Thiswill be essential to the development of a viablechildcare market and will need to be built into all aspects of guidance, support anddevelopment with schools.
45 Out of School Hours Learning Activities: Surveys of Schools, Pupils and Parents. MORI/BMRB, 2000.
The 2002 Spending Review
Significant extra resources were allocated to support the development ofplaces in out of school clubs. Most of these are likely to be based in oraround schools, or other community facilities. Further provision was alsomade available to provide support for those schools that wish, directly orindirectly, to offer childcare.
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5.1.2 Current developments to extendthe use of schoolsThe Government gave a commitment in theWhite Paper Schools: achieving success todevelop an “extended” schools approach,and it is critically important that thedevelopment of childcare provision in andaround schools is considered as part of thatagenda. The extended schools approachentails schools and their partners establishinga range of services and facilities on schoolpremises for the benefit of pupils, theirfamilies and the wider community. Serviceswill include health and social care, childcare,and family and community learning. This willbe an important step in improving access toservices and helping schools to improve keyareas such as achievement, attendance andbehaviour. The move is based on the beliefthat children’s needs are best met by theprovision of easily accessible and integratedservices, that they learn better if their familyis involved in their learning and that schoolsare important learning and social resourcesfor the whole community.
The extended school model draws upon anumber of examples of community use ofschools including the New York CommunitySchools and US Full Service Schools. NewCommunity Schools are also currently beingpiloted in Scotland. Evaluations show anumber of significant improvements inschool achievement, improved attendanceand behaviour, and increased motivation to learn.
The extended schools approach will be a keyway of mainstreaming services, includingSure Start and Children’s Fund activities. Theco-location and integration of preventativeservices around schools has been supportedby a number of cross-cutting reviews,including the children at risk and healthinequalities cross-cutting reviews.
The cross-cutting review of the public sectorlabour market also highlighted theimportance of teacher recruitment andretention. This objective is supported by theprovision of childcare in, or around, schools.
5.1.3 A resource for the community –the capacity to provide childcare inschoolsThe ability of schools to provide childcare on site will depend to a large extent on thephysical space available within schools.Childcare and family support are two of thekey services which could be provided onschool premises, but the decision on theamount of space available for childcare willrest ultimately with the governing body. Inany case, existing capacity should be used tomaximum effect. But additional scope maybe available due to falling birth rates acrossEngland. There has been a 14 per centdecline in births since 1990, which isprojected to continue for at least the next 10 years. The trend in births has led to fewerpupils in maintained nursery and primaryschools, although the maintained secondaryschool population is still rising and isexpected to peak at 2004. Projections show amost pronounced decline in child populationin the North (over 12 per cent decline in theNorth-east) and Midlands with a slowerdecline in the South. London goes againstthe trend with a projected increase inpopulation of 0–2 per cent over the period.Figures show that there is a an overall currentexcess capacity of 10 per cent in primaryschools and 7 per cent of secondary schoolsin England which will increase in most areasas child populations fall.
Whilst there is some certainty that the overallcapacity within schools will increase over thecoming years, the capacity within individualschools will vary widely. This year sees the
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introduction of a new Net CapacityAssessment system, which assesses all spacewithin schools. Community use and speciallyresourced facilities will be exempt from thecapacity calculations for the first time. Thiswill offer some safeguards to existingcommunity facilities in schools.
5.2 Key conclusions of thereview
5.2.1 Childcare within schools couldstrengthen the ability to meet keyobjectives
Supporting provider economics andsustainabilityBetter use of the schools infrastructure forchildcare provision will help to improveprovider economics and sustainability. Thereare three areas which will help providers:
• Savings will be made on capital cost,limiting the level of borrowing required.Specifically, the acquisition of premises canbe avoided and much of the space onschool sites should be ready for use forchildcare – some conversion costs mayremain, but they are likely to beminimised. Equipment may be sharedbetween the school and childcare, makingfurther savings.
• Problems actually finding appropriate spaceare mitigated.
• It will help to address concerns raised byproviders about the time it takes to fillplaces. Operating from a school site mayoffer a head start in marketing, allowing afaster ramp-up of provision. Parents mayhave greater trust in a provider operatingat the school, while the provider cancommunicate and publicise services to acaptive audience of school parents.
Many parents with children of differentages report of the struggle they havedelivering and collecting children fromdifferent childcare sites. The school offersan opportunity to create co-ordinatedservices that are co-located.
Some minor caveats remain, however, andthese need to be addressed to maximise therole that schools can play. There needs to beconsistent, reliable space available at theschool site. The space must be available at areasonable rent and extra elements, such asstorage space, can be important.
Integrating early years and childcare School-based childcare offers significantopportunities to integrate childcare andeducation – for early years and school-agechildcare. As the number of 3 and 4 year oldswith access to a nursery education place inschools increases, there are likely to beparticular opportunities to develop wrap-around childcare, although the physicalcapacity of the school to provide spaceremains a potential problem.
In addition to the key role that schools canplay in providing a base for an expansion of out of school clubs, there may also beopportunities to co-ordinate and integratechildcare and study support out of school.Anecdotally, many working parents say thattheir children are currently not able to attendstudy support, as it is not compatible withtheir childcare arrangements. Co-ordinatedactivities of this kind have the potential tolink closely with the school to support andfurther children’s educational attainment.
75 per cent of Early Excellence Centres arebased in, or built around, schools. 57 percent have grown from nursery schools,demonstrating the importance of the earlyeducation base to the development of wider
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childcare services for 3 and 4 year olds.Integrated early education and childcare willalso be at the core of children’s centres.
Building qualityChildcare in schools will be regulated byOFSTED to National Day Care Standards.There are also opportunities to develop amore coherent, broad-based workforce forearly years and childcare, combining withwider school activities. Evidence suggests thatthe part-time nature of many childcare jobs –especially childcare for school-age children –is a barrier to recruitment. Situating serviceswithin schools may offer the opportunity forportfolios of jobs to be developed across theschool, combining school support andchildcare worker posts. This is an area ofactivity that would particularly benefit frombeing tested as part of demonstration andpathfinder projects.
The evaluation of Early Excellence Centresshows that one of the key factors in thesuccess of the programme is the level ofmanagement skills and experience of thecentre manager. The school has anestablished management structure on whichto build which will include the managementof physical resources and staff. This will be animportant resource for childcare projects inschools – particularly for children’s centres.
The school also has important resources,which can support the quality of childcaresuch as computers, sports facilities and art rooms.
Providing childcare support for teachersThere is an important opportunity to providechildcare support for teachers and schoolstaff in schools to meet Governmentobjectives to strengthen the delivery ofpublic services.
5.2.2 Removing barriers to the use of schoolsWhilst there is a strong case for maximisingthe potential of the school as a base forchildcare, it is also important to be aware ofthe potential limitations and barriers.
Reforming legislation and issuing guidance to schoolsThe Education Act will remove legal barriersto schools becoming direct providers ofchildcare. The Act includes provision enabling(but not requiring) school governing bodiesto provide facilities or services for the benefitof their pupils, their families and the widercommunity. Other provisions allow governorsto incur expenditure, make charges, enterinto contracts and employ staff to deliverthese objectives. Schools continue to need tomake safeguards to protect the school’sdelegated budget and are also required toconsult the Local Education Authority (LEA)and to have regard to LEA and Governmentadvice.
The introduction of these changes is expectedto have a significant impact on the numbersof schools willing to become direct providersof childcare. However, it is important not tocreate an unfair market where schools have amonopoly or where the new role for theschool will displace existing provision. Toaddress these potential effects, it is importantthat guidance for schools includes therequirement to consult with key localstakeholders, including parents and childcareproviders, before developing any extendedcommunity service. The guidance should alsomake it explicit that entry to early years andchildcare is not linked with entry to the school.
Encouraging and enabling schools to developchildcareSome schools will be cautious aboutproviding childcare in their school. DfES is
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planning demonstration programmes,promotional events, and information andbranding on the extended use of schools.These will all play an important role inensuring that schools and parents are awareof new opportunities and are directed to thesupport that they need to make it happen.
However, experience shows that directsupport for schools to develop childcare willbe needed. Schools are well placed to drawon their experience of employing staff,managing significant budgets and in devisingand delivering complex teachingprogrammes. However, management anddevelopment capacity within schools islimited. DfES is planning to offer directoperational support from Early Yearsdevelopment and Childcare Partnerships todevelop childcare in schools.
5.2.3 The operational model Schools will embrace an extendedprogramme to differing degrees according totheir own circumstances. However, the corechildcare offer for a fully extended school islikely to include nursery and pre-schoolprovision, breakfast, after school and holidayprovision for 4–14 year olds, and childmindernetworks, as appropriate to the needs of local families.
Direct childcare services may also link toparenting programmes; information andadvice; adult training; health and specialistsupport; training and co-ordination forchildcare workers; joint use of resources;study support; and play and youth provision.
The school can act as a hub within thecommunity – co-ordinating and supportingcommunity-based provision, which can alsolink into the specialist support andinformation outlined above.
FundingSchools will need to be able to access pump-priming funding to develop early years andchildcare and new children’s centres. Thisfunding is being recommended as part of thewider childcare package. Schools will alsobenefit from access to wider funds – theNursery Education Grant (which many willalready be in receipt of) to support earlyyears education for 3 and 4 year olds, andwider funding for early years and childcarefrom Neighbourhood Renewal, Sure Start,study support and the Children’s Fund. A keyrole of proposed EYDCP school support staffwould be to help providers to access fundingto support the development of services.
5.3 The 2002 Spending ReviewThe 2002 Spending Review backed up theconclusions of the inter-departmentalchildcare review that schools should providea key part of the childcare solution for manyparents of school-age children.
In this way spending has been allocated foran expansion of out of school clubs, many ofwhich would be located in and aroundschools or other community facilities. Thesecould contribute around 100,000 of thegross childcare places supported through theSpending Review. Schools would not alwaysprovide these services directly; in most casesthe expectation would be that schools wouldcontract with the private, voluntary ormaintained sectors.
In addition, childcare provision within schoolswould also benefit from the investment beingmade in the Spending Review to addressdifficulties for providers in starting upprovision, and in sustaining provision in theface of fluctuating occupancy levels.
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While children’s centres will act as the hubwithin the community for childcare,extended schools would have an importantrole to play, especially where no children’scentre exists.
Provision was also made in the settlement toprovide support to those schools that wishdirectly or indirectly to offer childcare.
Summary of conclusions
The 2002 Spending Review will enable schools to provide an essential partof the childcare solution for many parents of school-age children.
The removal of barriers to the development of childcare in schoolsthrough the Education Act, support for the development of extendedschools – and help for childcare providers – through the 2002 SpendingReview, and the introduction of guidance and support to establish newchildcare facilities will all have a major impact on the availability ofchildcare in schools.
Through these measures, significant progress will be made in meeting the childcare needs of parents and children whilst enabling providers to establish and sustain viable childcare businesses.
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6. DELIVERY AND INFRASTRUCTURE: INVESTMENTMUST BE BACKED UP BY REFORM
Summary
Current arrangements for childcare have been characterised by:
• confusion at a local level over responsibility and accountability;
• separate funding and monitoring arrangements for a large number ofdifferent, but similar initiatives; and
• burdensome planning and monitoring arrangements covering anumber of overlapping yet separate targets.
Key conclusions of the review
• Government should bring related initiatives and their fundingtogether at a national level to improve joining-up locally.
• Responsibility should be given to local authority (LA) chief executivesand LAs allowed to consult local partners through Early YearsDevelopment and Childcare Partnerships (EYDCPs) or, ultimately,other means which suit them.
• Targets should be aligned to the overall vision, and be meaningfullocally as well as centrally.
• There should be a clear framework of rewards and sanctions inrelation to LA performance on childcare.
The 2002 Spending Review
• The Government has brought together the responsibility for childcare,early years and Sure Start within a single inter-departmental unit andplans to simplify funding arrangements.
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6.1 Evidence on the existingsituationThe Spending Review has emphasised thatnew investment needs to be backed up byreform. The review’s findings oninfrastructure concluded that it was vital to make sure that the infrastructure wasreformed both at a local and a central level if Government was to deliver its vision.
6.1.1 The architectureThe Department for Education and Skills(DfES) has the lead responsibility for childcarewithin Government and it works throughlocal partners to deliver childcare on the ground.
• Local education authorities (LEAs) haveduties to:
– prepare, submit and publish plans onchildcare and early years;
– convene and work with Early YearsDevelopment and ChildcarePartnerships (EYDCPs); and
– provide information and advice forchildcare providers.
• Local authority Social ServicesDepartments (SSDs) have duties undersection 17 of the Children Act to providechildcare for children in need. SSDs set
their own priorities for children in need,against locally-agreed definitions.
• EYDCPs were established in 1998 to deliverthe National Childcare Strategy (NCS).They were an extension of the Early YearsDevelopment Partnerships established in1997 to deliver free part-time nurseryeducation. EYDCPs are described as havingstatutory functions, but do not have anypowers to enter into contracts or directlymanage resources.46 It is LEAs that haveultimate responsibility for EYDCPs; who areaccountable for handling the money andemploying EYDCP staff; who let contracts,pay bills and complete paperwork forDfES. LEAs must also importantly ensurethat the interests of a wide range ofgroups are represented on the EYDCP.
The Education Act 2002 gives LEAs duties tocarry out an annual review of childcare intheir area and to establish and maintain aChildren’s Information Service, though inpractice LAs are already carrying out thesetasks and the Act merely regularises thecurrent position.
There are strengths and weaknesses EYDCPs represent and draw together adiverse range of providers covering earlyyears and childcare, and to a lesser extentbusiness, employment and regenerationinterests. Before EYDCPs were established,childminders, the voluntary sector and
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46 Early Years Development and Childcare Partnership Planning Guidance 2001–2002 Background Notes, DfEE.
• LAs will be given a clearer responsibility for strategic planning andmeeting delivery targets at the district level, with a requirement onthem to consult with appropriate bodies.
• A clear performance management framework will be put in place inline with the Local Government White Paper.
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47 Partnerships – What Works, DfES Guidance, 2002.
private sector had no locus in local planningor decision making.
EYDCPs have no legal status and cannot holdfunds or let contracts. The message from thecentre that EYDCPs are the local deliveryagents has caused some confusion aboutwhat EYDCPs are expected to deliver andwhat they actually can do within the law.EYDCPs have often required intensive supportfrom DfES as well as local authorities (LAs).The Chief Executive of Leicestershire Councilhas commented that “Partnership is a finenotion but does not always stand up toscrutiny when accountabilities andresponsibilities become blurred”.
DfES has found EYDCPs to be most effectivewhen their work is:
• “mainstreamed within the wider LAagenda in strategic planning andimplementation”;
• “[when] local elected Members areinvolved as advocates when childcare andearly education matters are discussed,including approval of plans”; and
• “[when EYDCPs’] work is mainstreamedand taken into account when [the LAallocates] funding via the StandardSpending Assessment (SSA).”47
DfES evidence also shows that where EYDCPsare working well it is because of clearleadership on the behalf of the LA.
6.1.2 Joined-up services There is strong evidence suggesting that highquality, integrated early years education (seeChapter 4) and childcare can increase schoolreadiness for pre-school children, and thatthese effects are disproportionate for childrenin low income households.
There is a need to change the way in whichpolicy is made and services are delivered atboth the central and local level to enable amore joined-up approach, and theGovernment reforms have been designed toaddress this. At the centre there are anumber of Government Departments thathave an interest in childcare policy: DfES,Department for Work and Pensions (DWP),Department of Trade and Industry (DTI),Inland Revenue (IR), Department for Culture,Media and Sport (DCMS), Department ofHealth (DH), Home Office (HO), Women andEquality Unit (WEU), Office of the DeputyPrime Minister (ODPM – previouslyDepartment for Transport, Local Governmentand the Regions). This has also meant thatthe relative priority of targets has not alwaysbeen clear in the past.
Complex programmes are difficult to co-ordinate on the groundThere has been a lot of responsibility on localplayers to co-ordinate the numerous policiesand programmes related to children andfamilies and their separate funding,timescales and monitoring arrangements. LAshave worked hard to join things up at thelocal level. Often the same people representthe same interests on different partnerships,for example EYDCPs, Sure Start Partnerships,Crime and Disorder Partnerships, YouthJustice Boards, Connexions, BehaviourSupport Partnerships, RegenerationPartnerships and Children’s FundPartnerships. This places a special burden onvoluntary sector partners whose organisationsmay be too small to allow the amount ofpartnership participation required. It alsomeans there can be duplication of effort – forexample, although each will be distinct thereis likely to be some overlap between whatdifferent Sure Start Partnerships will require. As the burden grows on LA staff it discouragesthem from applying for new programmes.
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The role of EYDCPsAnalysis has shown that the establishment ofEYDCPs has not always made a significantdifference in driving forward the joiningtogether of services or encouraged thoseparts of the local statutory services with aninterest in children – LEAs, SSDs and NHSTrusts – to work together co-operatively.
Traditional approaches, where local agenciesact competitively rather than collaboratively,do not help children and their families,particularly those who are already at thegreatest risk or who face the most challenges,such as children at risk and children withdisabilities. It can also put providers in adifficult position.
Much can be learnt from the Sure Startapproach where services around health,education, and improving the community areintegrated. Sure Start programmes bringtogether a range of services including homesupport, support for families, primary andcommunity health care, and support forchildren and parents with special needs inone place, so making it easier to access services.
EYDCPs have been most successful where LAshave been actively involved, and there hasbeen a more holistic approach to childcareservices, with a joining-up between LEAs,SSDs, and related programmes such as SureStart and the Children’s Fund.
There has also been a growing appreciationof the importance of the relationshipbetween EYDCPs and Jobcentre Plus offices in identifying and resolving childcare issues.The 2002 Budget announced that from April2003 there will be a dedicated childcare co-ordinator in every Jobcentre Plus district.Childcare co-ordinators will work with LAsand Jobcentre Plus advisers to improve accessto information about local childcareprovision, and ensure that the needs ofunemployed parents are taken account of in planning new childcare provision.
6.1.3 Performance management Every three years, in accordance with DfESguidance, EYDCPs/LAs prepare StrategicPlans. These should set out the EYDCP’s/LA’svision of where they expect to be in threeyears’ time based on annual local audits of
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Box 6.1: Coverage of the targets
EYDCPs/LAs are expected to plan towards targets covering:
• the provision of universal, free early education places;
• the content and quality of early education provision;
• creating childcare places related to various age groups or to parental need;
• improving the sustainability of childcare places;
• promoting Working Families’ Tax Credit;
• local recruitment to the childcare workforce; and
• childcare quality.
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provision and needs, and against the targetsset or directed by DfES (see Box 6.1).
EYDCPs/LAs also prepare detailedImplementation Plans annually. These include a review of progress over theprevious 12 months; provide business plansand objectives for the coming year, includingdetails of resources; and show how theprogress made and planned contributes tothe Strategic Plan. Both Strategic andImplementation Plans have to be agreed bythe Council and then with DfES. The planshave invariably been approved by DfESthough some have required extra workbefore approval was given. LAs have also hadto prepare a childcare progress report eachquarter for presentation to and discussion bythe EYDCP before submission to DfES whohave required the reports to be submittedwith claims for Childcare Grant. Theseplanning and reporting requirements areburdensome for local and centralgovernment partners. For instance, duringthe planning period, which runs fromSeptember to February, some Partnershipmanagers can spend over 50 per cent of theirtime pulling together the plan, and inSunderland a member of staff works full-timemonitoring 20 different budgets.48
There have been no formal inspectionarrangements for assessing LA/EYDCPperformance on childcareDfES has made informal assessments ofEYDCP performance and offered additionalsupport to those who are struggling, butthere has been no formal inspectionmechanism. OFSTED inspects childcare andeducation settings. It also inspects LEAs butthe extent to which it assesses EYDCPperformance will depend firstly on whetherthe EYDCP is co-ordinated by the LEA (somecome within the responsibility of SSDs) andsecondly on its inspection priorities.
Management through targetsEYDCPs/LAs have had little discretion todecide how to deliver against targets. Anumber of the targets set by Government are expected to reflect or improve on therelevant national target and are notnegotiable downward: for example, thetarget to ensure that a minimum of 80 percent of all out of school childcare placessponsored from New Opportunities Fundmoney remain viable and available five yearsafter being established. Others are negotiablebut lower targets can result in reducedfunding, and higher targets often onlyreceive higher amounts of funding if otherPartnerships reduce their targets, for examplethe target to have set up a minimum of120,000 places with childminders acrossEngland by 2004. Some targets have proveddifficult. For example, there have beendefinitional difficulties in relation to thetarget to increase wraparound facilities (amanifesto commitment), which have affectedobjective measurement. Others have no focuson outcomes or outputs and are concernedwith common sense process, such as target 26 – “to ensure Partnerships keepmembership, working practices and progressunder review, so that they are successful in thedelivery and evaluation of their Strategic Plansand key objectives”.
For targets to have the best effect on serviceoutcomes they must be owned andunderstood by those delivering the service. Itmust also be clear how actions to deliver thetargets contribute to the overall objectivesand vision. At the moment too many EYDCPsdo not understand how the targets relate totheir work, and Partnership managers arespending too much of their time explainingthe targets and making themunderstandable.
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48 Joining-up to Improve Public Services – Report by the Comptroller and Auditor General HC 383 Session 2001–2002:7 December 2001.
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The performance management process hasbeen burdensomeThe current planning and performancemanagement processes that EYDCPs, LAs andDfES undertake have been time consumingand burdensome and have added little valueto the work of the Partnership or itscustomers. Most Partnerships view the wholeprocess as a means to an end, enabling themto get funding and deliver their services.
6.1.4 Funding
Funding programmes have been complexFunding has not been well aligned. TheEYDCPs’ role in delivering the NationalChildcare Strategy has not been reflected intheir control over funding. This is particularlythe case for start-up funding which iscurrently available through the NewOpportunities Fund. Funding for early yearsand childcare is spread across a wide rangeof programmes to create a complex fundingmap. Each has its own application andplanning process. The key sources of fundingfor providers are:
• Early Education Grant – currently providesfor universal early education provision for3 year olds (which is planned in duecourse to move into the SSA) as well asspecific funding for Early ExcellenceCentres; and money for training, forexample.
• Childcare Grant – provides direct fundingfor childcare to EYDCPs. This grant isallocated by DfES to LAs partly on an equalshares basis and partly depending on the0–14 population taking account of relativedeprivation. This fund mainly coversstaffing to support EYDCPs, but alsoincludes some funding for Children’sInformation Services, training, childminderstart-up grants and some funding forpump-priming.
• New Opportunities Fund – provides pump-priming funding from the national lotteryfor out of school hours places (includingholiday schemes, before/after school clubs,education projects) with a particular focusin deprived areas.
• Standard Spending Assessment (SSA) –provides for early years education for 4 year olds, some residual registrationresponsibilities, and information services(though in some cases LAs have beenunwilling to allocate SSA funds tochildcare).
• Funding for childcare training is availablethrough the Learning and Skills Council.
• Funding for Sure Start is allocated by theSure Start Unit to local Sure Startpartnerships.
In addition to these, there is the funding forrelated programmes for children and families,including the Children’s Fund and StudySupport. Parents also receive supportthrough the childcare tax credit element of WFTC.
The numerous programmes for children’sservices have added to the complexity ofdelivering childcare. The main problems have been:
• for providers: uncertainty and difficulties insecuring funding (i.e. different timetablesand targets), and the amount of time ittakes to deal with them;
• for EYDCPs/LAs: a heavy burden in termsof time spent accessing the variousprogrammes and funds;
• for parents: the apparent lack of an overallvision, compounded by multiple brands,reduces their trust in childcare; and
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• for Government: difficulty in tracking theimpact of overall spending on differentinitiatives and ensuring that it is used inthe most sensible way.
6.2 Conclusions from theevidenceNew investment in childcare must thereforebe backed up by reform. Reform needs toensure that initiatives are joined up with clearaccountability and a smarter performancemanagement regime.
6.2.1 The architecture
A clear LA role The childcare vision as a whole cannot bedelivered narrowly through one arm of theLA such as the LEA, but needs to takeaccount of cross-cutting local interests inhealth, social services, planning andregeneration as well as encompassingemployment and local labour marketinterests. The vision involves a mixedeconomy of childcare and therefore localchildcare decisions need to be taken on thebasis of meaningful consultation with therange of providers: including the private andvoluntary sectors as well as school governingbodies and employers. This was the originalintention behind EYDCPs back in 1998 whenthey were established, and in some 30 LAareas the approach is working well. But theanalysis suggests that for this to be effectivein all areas there needs to be tidying up ofthe structural flaws: responsibility needs to beacknowledged as resting with the LA, andthe overall accountability of the LA needs tobe clarified. It is only when LAs are playing acentral role and childcare is mainstreamed aspart of the wider agenda that childcare andchildren’s services can reflect the full range ofobjectives to which they contribute.
In particular this will ensure that education,health, social services and planning interestsare brought together to determine localchildcare plans. This will reinforce the strongmessage about the importance of childcareto national and local agendas.
In helping to further emphasise the profileand overcome the problems of organisationsnot always working together, the reviewconcluded that the LA could play animportant role in bringing the key playerstogether. For example, this could be done byputting the responsibility for driving thestrategy at local level with the ChiefExecutive’s Department. The existingconsultative approach to planning anddeveloping childcare and early educationplaces should be retained and, over time,successful LAs should be given freedom tochoose the mechanisms for doing this (in linewith the Local Government White Paper).They might choose to retain the EYDCP as aconsultative body where it works well, butequally might not. It could be appropriate touse alternative partnership forums as long asthe necessary range of childcare and earlyyears interest groups, including the Jobcentre Plus and local business groups,were consulted.
There is also a role for Regional DevelopmentAgencies (RDAs). RDAs have a key role ineconomic regeneration in their areas.Ensuring that there is provision of sustainablechildcare may often be a key element of this.LAs and RDAs should liaise to make sure thatjoined-up childcare services and regenerationefforts work together.
Clarity in the role of the LA should facilitatethe joining together of services andprogrammes at the local level. Delivery of the Government’s vision will also require LAsover time to extend their remit to take
Delivery and
infrastructure: investment
must be
backed up
by reform
53
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6.2.2 Joining up initiatives and funding
The centre should bring initiatives together aspart of a single vision for children and familiesThe centre has an important role to play insupporting what happens on the ground by
helping to increase the joining-up of policiesat the central level. The new inter-departmental unit will need to consider howto present to local partners a joined-up visionof what the various policies and programmeswhich affect children and families are
responsibility for delivering Sure Startprogrammes currently managed from thecentre, particularly where such services arebeing integrated with childcare and earlyyears education on the ground.
If responsibility for childcare was to be placedwith Chief Executive’s Departments it wouldalso allow for flexibility in terms of LAstructures and would fit well in areas whereLAs have decided to bring together educationand children’s social services functions.
Reform of the central infrastructure must followas a logical consequenceConfusion on the ground has been linked to co-ordination at the centre. The PublicServices Productivity Panel report on
Partnerships49 found that the centralGovernment structure was relevant toPartnerships’ performance: “Many of thepartnerships in our study felt that the way thecentre behaved [in terms of setting objectivesand targets, providing funding, sponsoring andmonitoring] inhibited partnership working onthe ground”.
In particular, the review concluded thatresponsibility for Sure Start and for early yearseducation and childcare need to be broughttogether at the centre, with a clear Ministeriallead in a new inter-departmental unit. Thiswill help to join up policies and objectives inthese areas, including those related to childpoverty and welfare to work through theDepartment for Work and Pensions.
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49 Working Together, Effective Partnership Working on the Ground, Public Services Productivity Panel, 2002.
Conclusions
Greater responsibility for the delivery of services should be devolved to LAs. In particular,the review concluded that it will be important to:
• promote and develop the role of the LA in early years and childcare development,perhaps with the Chief Executive’s Department driving the strategy forward;
• allow LAs to identify the best mechanism for delivering childcare services;
• maintain and strengthen the consultative approach to planning and developingchildcare and early years places;
• ensure that planning for childcare and early years places takes account of local interestsand other relevant initiatives; and
• give LAs the lead role in supporting delivery of joined-up services including Sure Start.
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intended to achieve, and how the policiesand programmes can practically interact.
These problems are not just related tochildcare services. The cross-cutting reviewon children at risk50 has identified a need forimproved working between agencies and amove towards the joining-up of services.
Bringing together the various initiatives atthe centre and at local level, starting withSure Start, childcare and early educationallows for greater integration of fundingstreams. Although it will not be possible tointegrate some funding streams, it will beimportant to present this as part of thebroader funding strategy, perhaps by using asingle brand.
By giving LAs a greater role andaccountability in the delivery of the NationalChildcare Strategy, it would follow thatfunding for early years and childcare shouldcontinue to be routed through LAs.
To support the vision there will be anincreased budget for the new inter-departmental unit. This will also mean thatSure Start funding is added to the childcareand early years funds. Funding will also besimplified through mainstreaming. Forexample, the pump-priming andsustainability funding that currently comesthrough the New Opportunities Fund toEYDCPs will in future be funded through theinter-departmental unit’s budget. Over time
there would be potential to direct funding forchildcare and related programmes through,for example, the SSA for high performing LAsand a move away from ring-fenced funding.In addition, in line with the performancemanagement framework, LAs who candemonstrate that they are delivering goodoutcomes should be rewarded with greaterflexibility over funding and this will besomething for the new inter-departmentalunit to consider early on.
Funding can be integrated in stagesFunding should be integrated increasingly atcentral and local levels. Key steps include:
• integrating pump-priming andsustainability funding within DfES’sChildcare Grant;
• perpetuating the distribution of ring-fenced funding for childcare and earlyyears education to LAs until such a time asLA performance is such to justify removingring fencing;
and in the longer term:
• considering the possible integration ofother sources of funding to the newintegrated funding stream; and
• integration of childcare funding fromcentral government into LAs’ SSA fundingor a suitable alternative pot where LAsperform well.
Delivery and
infrastructure: investment
must be
backed up
by reform
55
50 2002 Spending Review White Paper Opportunity and Security for Allhttp://www.hm-treasury.gov.uk/Spending_Review/spend_sr02/report/spend_sr02_repindex.cfm?
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6.2.3 Performance managementA new performance measurement systemshould focus on what is required to deliverthe 2010 vision – and monitoring theprogress of new policies in helping achievethis. It is also important to ensure that thereis clear ownership of the targets, andflexibility to allow those at the local level toset measures relevant to local need. Thereneed to be rewards and incentives toencourage good practice, but also clarityabout the consequences of failure.
The Prime Minister’s four principles of publicsector reform should underpin the reforms toperformance management of local planningand delivery of childcare:
• high national standards and fullaccountability;
• devolution to the front line to encouragediversity and local creativity;
• flexibility of employment so that staff arebetter able to deliver modern publicservices; and
• promotion of alternative providers andgreater choice.
The new performance managementframework will ensure that there is a linkfrom the overall vision down to the outputsand objectives. Each objective is linked to atarget. Data to show progress against thetargets can be gathered by Government orLAs. Progress against the targets will bemeasured through outputs/ performanceindicators. An example of an indicator mightbe the number of integrated childcare placesfor those aged 0–4. The aim would be todefine all measures in line with SMART(specific, measurable, achievable, realisticand timed) principles, and to incentiviseperformance.
Performance monitoring will play a key rolein working towards the 2010 vision andreviewing progress in the 2006 SpendingReview. As new policies bed down it will beimportant to have detailed performancemonitoring, which can be reduced as policiesbecome established. As part of this it will alsobe important to ensure that performanceinformation is of a high standard and not tooburdensome on those who are collecting it.The inter-departmental unit will need toreview and rationalise the information
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Conclusions
• Present funding should come under one brand.
• The various initiatives at the centre and local level should be brought together startingwith Sure Start, early education and childcare.
• Funding should be simplified through mainstreaming, for example integrating pump-priming and sustainability funding in the Childcare Grant.
• There should be a move towards integrated funding for early years and childcare with lessring-fenced or targeted funding over time. LAs that can demonstrate that they are meetingnational childcare targets and delivering successful programmes should be allowed greaterfreedom over the distribution of funding for childcare. As LAs improve their performanceon childcare, they should be rewarded with greater freedom over funding.
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collected now to ensure that delivery of thePSA targets can be properly monitored. Datashould not be collected unless it serves aclear purpose. In addition, the unit shouldfeed back performance information to LAsallowing them to compare their performancewith performance in other areas.
Inspection will be important in ensuring thatLAs are effective in planning and facilitatingthe delivery of early years and childcareservices for communities. The LocalGovernment White Paper51 sets out a newmodel for gauging the performance of LAsusing inspection and other performance data:the Comprehensive Performance Assessment(CPA). Under the CPA those LAs that areassessed as performing well will be rewardedby a substantial reduction in inspectionactivity, and possible funding flexibilityrewards also. However, for those where thereis little or no prospect of improvement earlyintervention measures will be taken, and
where there are serious failings tougheractions will be taken such as:
• the transfer of functions to other providers(perhaps another LA, a not for profitcompany or trust or the private sector)with the council retaining statutoryresponsibility for strategic decisions; and
• franchising management (giving strongercouncils a role in running weaker ones,and including success related rewards/bonuses).
The model being developed by the AuditCommission for the CPA includes a childcareperformance indicator. This means that theLA’s performance in terms of childcare will bepart of a new overall judgement. The CPA willbe reviewed annually, allowing for a review ofthe childcare performance indicator as thechildcare vision is rolled out, and helping tobring more consistency to the inspection ofthe LA’s role in enabling childcare services.
Delivery and
infrastructure: investment
must be
backed up
by reform
57
51 Strong Local Leadership – Quality Public Services, DTLR, 2001.
Conclusions
• Measure progress against targets in the childcare PSA through output/performanceindicators based on information collected by either the Government or LAs.
• Review progress towards the 2010 vision in the 2006 Spending Review.
• Review and rationalise the information about childcare that is collected now. Feed backperformance information to LAs, allowing them to compare their own performance withperformance in other areas.
• Make rewards and incentives a key part of performance monitoring to encourage goodpractice and the right behaviours. Reward those that perform well by giving themgreater flexibility in the way that they use their funding and set targets.
6.3 The 2002 Spending ReviewAnnouncements in the 2002 SpendingReview supported the conclusions of thereview to transform the way in which servicesare delivered.
6.3.1 Reforming the infrastructure
Joined-up servicesIn the Spending Review the Governmentannounced its intention to give LAs a clearerresponsibility for strategic planning and
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meeting delivery targets at the district level,based on the LA’s assessment of local need.The role of local partners will be crucial andthere will be a requirement for LAs to consultwith appropriate bodies, for example PrimaryCare Trusts and Local Strategic Partnerships,and importantly encouraging informal, localparental participation.
At the centre, responsibility for childcare,early years and Sure Start will be broughttogether within a single inter-departmentalunit, with a new budget rising to £1.5 billionby 2005/06. The unit will lead the phasedjoining-up of Sure Start, childcare and earlyyears education providing new opportunitiesfor effective delivery and re-branding.
Simplifying the fundingAs part of the Government’s announcementto join up existing services, it intends tosimplify funding. The Sure Start, early yearsand childcare budgets will be broughttogether as a ring-fenced budget for theinter-departmental unit.
Clear performance managementThe settlement provides for a clearperformance management framework to helpenhance the delivery of services. This will bedeveloped in line with the Local GovernmentWhite Paper. The Government also intends tostreamline targets.
The performance management frameworkwill focus on the overall objective:
“To increase the availability of childcare forall children, and work with parents to be,parents and children to promote thephysical, intellectual and socialdevelopment of babies and young children– particularly those who are disadvantaged
– so that they can flourish at home and atschool, enabling their parents to work andcontributing to the ending of child poverty.”
The objectives are underpinned by a nationalSure Start, childcare and early years PublicService Agreement (PSA), which waspublished in the 2002 PSA White Paper andis the responsibility of the inter-departmentalunit. This shows the objectives theGovernment has for childcare in terms ofemployment, poverty, education, health andcrime and how progress can bedemonstrated through measurable outcometargets. The PSA also revises the targets forSure Start programmes and children’s centres.
The objectives for fully operational areas are:
• an increase in the proportion of youngchildren aged 0–5 with normal levels ofpersonal, social and emotionaldevelopment for their age;
• a 6 percentage point reduction in theproportion of mothers who continue tosmoke during pregnancy;
• an increase in the proportion of childrenhaving normal levels of communication,language and literacy at the end of theFoundation Stage and an increase in theproportion of young children withsatisfactory speech and languagedevelopment at age 2 years; and
• a 12 per cent reduction in the proportionof young children living in householdswhere no one is working.
6.3.2 Achieving the 2010 visionTo deliver the vision there will a number ofchanges. LAs will have a greater role in earlyyears and childcare development. Co-ordination and joining-up of services and
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funding will be encouraged, building on theco-ordination under way between Sure Startand childcare. Integrated funding will help tosupport integrated planning and delivery.
There will also be re-branding through a newnational communication and informationstrategy. Progress towards the vision will bereviewed in the 2006 Spending Review.
Delivery and
infrastructure: investment
must be
backed up
by reform
59
Summary of conclusions
The key conclusions, which have been supported by the outcomes of the2002 Spending Review, are:
• to enhance the role of LAs in supporting the delivery of services;
• that Government should bring related initiatives and their fundingtogether at a national level to improve joining-up locally;
• that targets should be aligned to the overall vision, and be meaningfullocally as well as centrally; and,
• that there should be a clear framework of rewards and sanctions inrelation to LA performance on childcare.
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7. CONCLUSION
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7.1 Key conclusions from the reviewChildcare supports a range of objectives.Childcare, alongside other labour marketpolicies, enables parents to go out to workand lift their families out of poverty.Childcare can improve outcomes for children.It also plays a key role in meeting other keyobjectives, for example in improvingeducational attainment, reducing crime,improving health, boosting productivity, andclosing the gender pay gap.
Despite the significant role that the NationalChildcare Strategy has played in creatingnew places, the childcare sector has not beendelivering childcare that is available andaccessible for all parents. There are shortagesin most local childcare markets, and littlechildcare is provided in schools.
The evidence collected during the inter-departmental review made a strong case forinvestment in childcare:
• There are very significant payoffs fromgood quality early interventions fordisadvantaged children: not only do thebenefits cascade throughout theeducational system, but there are big gainsin reducing crime, in improving health,and in reducing demand on social services.
• New investment is needed to supportthe Government’s employment andpoverty targets: targets to increase loneparent labour market participation to 70 per cent by 2010, in particular,
require a substantial increase in childcareplaces by 2010. The market alone will notdeliver this.
7.2 The vision: the 2002Spending ReviewThe Government’s vision for children is onein which every parent can access affordable,good quality provision. The 2002 SpendingReview – which will double funding forchildcare by 2005/06 – was underpinned bythe conclusions from this review, and hasprovided resources to build on the successesof the National Childcare Strategy and SureStart by:
• developing a thriving supply ofchildcare: by supporting the creation of atleast 250,000 childcare places by 2005/06to advance the Government’s lone parentemployment and child poverty objectives,through targeted assistance to providers inareas of market failure. This exceeds thenumber of places that were estimated tobe required to meet key Governmenttargets. New funding will support thegrowth of full day care and out of schoolclubs, and will provide help for additionalchildminders. Funding has also beenprovided to help sustain provision in themost disadvantaged areas;
• providing financial help to lower andmiddle income parents for whom thecost of childcare is a barrier to work:parents can currently receive generoussupport towards the costs of approved
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Conclusion
61
childcare. This assistance will continue – inan improved, more flexible form – as partof the Working Tax Credit from April 2003.The Government is committed to keepingthe level of support under review; and
• transforming the way in which servicesare delivered to better meet the needsof children and parents, particularly themost vulnerable: by supporting thecreation and operation of children’scentres in disadvantaged areas. Building,where possible, on existing childcare andSure Start provision, these will sit at theheart of the community offering integratedservices and support to parents, children,and childcare providers. The Government’slonger-term aim is to establish a children’scentre in every one of the 20 per centmost disadvantaged wards.
To deliver better integrated services inpartnership with the private, voluntary andcommunity sectors, responsibilities will bebrought together at the local authority level,backed up by better performancemanagement, with a focus on outcomes, andmore integration of key funding streams.
At the centre, the Spending Reviewannounced an important first step to developmore integration by establishing a new inter-departmental unit, with a total budget of£1.5 billion by 2005/06, to ensure thatGovernment policy for children, particularlyyoung children, is joined up. This will ensurethat a focus is maintained across the widerange of Government objectives to whichchildcare contributes.
It will be important to review progress in allthese areas before 2010. The proposal is forthat milestone to be built into the 2006Spending Review process, enabling a detailedexamination of the delivery of the key
components of the vision and their effect increating new childcare places and indirecting help to those who need it most.
7.3 A vibrant future forchildren and familiesThis review has emphasised the importanceof childcare to Government objectives ofextending employment opportunities andtackling child poverty, as well as otherobjectives such as boosting productivity andclosing the gender pay gap. It has alsohighlighted significant benefits to children(particularly very young children and thosefrom disadvantaged backgrounds) whengood quality childcare is delivered alongsideearly years education, family support andhealth services.
The Government’s vision, building on theconclusions of this review, is to ensure thatthe Government supports a childcare marketwhere every parent can access affordable,good quality childcare. In this way parentalchoice is at the centre of the vision. TheGovernment’s longer-term aim is to establisha children’s centre in every one of the 20 percent most disadvantaged wards.
The 2002 Spending Review has responded tothose conclusions and has allocatedsignificant new funding to create and sustainmore childcare places and to support thecreation and operation of children’s centresin the most deprived areas. The spendingreview has also ensured that such investmentis backed up by reform, both in terms ofdevolving funding and responsibility fordelivery to local authorities, and also byestablishing a new inter-departmental unit tojoin up thinking.
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Annex 1:
Background
63
ANNEX 1: BACKGROUND
A1.1 Inter-departmentalchildcare reviewThe inter-departmental childcare review wasannounced in October 2001 to considerchildcare as part of the 2002 SpendingReview. It has been led by Baroness Ashtonfrom the Department for Education and Skills,supported by Dawn Primarolo, PaymasterGeneral, HM Treasury with Baroness Hollisfrom the Department for Work and Pensionsand Barbara Roche, Minister for Women atthe Cabinet Office.52 They were supported byofficials from the Department for Educationand Skills, the Department for Work andPensions, HM Treasury, the Department ofTrade and Industry, the Women and EqualityUnit, the Children and Young People’s Unit,the Department of Health and the No 10Policy Directorate, together with the StrategyUnit53 at the Cabinet Office who have projectmanaged the review.
The main objectives for the review were:
• to assess the future demand and need forchildcare, given trends in labour forceparticipation, and how this compares withcurrent and projected trends in supply;
• to assess the effectiveness of different typesand qualities of childcare in terms ofimpacts on child development, educationalattainment and labour market outcomes inlater life; and
• to develop a 10-year vision and strategyfor childcare in the light of theseassessments, including recommendationsfor improving the effectiveness of delivery
mechanisms and bringing greatercoherence to existing initiatives (thisinvolved examining different deliverymodels, funding mechanisms andregulatory approaches).
The project started in November 2001 andfed into the 2002 Spending Review process,which rolls forward existing spending plansand sets budget and outcome targets fordepartments up to 2005/06.
The outcomes from the inter-departmentalreview were announced in the Chancellor’sSpending Review statement on 15 July 200254
and the White Paper Opportunity and Securityfor All.55
A1.2 The teamThe Strategy Unit project team responsiblefor preparing this report comprised staffdrawn from Government, the private sectorand the voluntary sector:
• Charlie Massey (Team Leader) – StrategyUnit, seconded from the Department forWork and Pensions;
• Jane-Frances Kelly – Strategy Unit,previously from Boston Consulting Group;
• Mary Pooley – seconded from theDepartment for Education and Skills;
• Anne Longfield – seconded from Kids’Club Network;
• Nick Percy – Strategy Unit, previously fromMcKinsey & Co;
52 Now the Office of the Deputy Prime Minister.53 Formerly the Performance and Innovation Unit.54 http://www.hm-treasury.gov.uk/Spending_Review/spend_sr02/spend_sr02_statement.cfm?55 Opportunity and security for all: Investing in an enterprising, fairer Britain. New Public Spending Plans 2003–2006, CM 5570, July 2002.
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• Shane Tomlinson – Strategy Unit;
• Nick Donovan – Strategy Unit;
• Jane Halestrap – Strategy Unit; and
• Mia Rosenblatt – Strategy Unit.
Additional assistance was provided by PhilLing, Mark Hayward, John Ambrose andMatthew Jaffa from the Strategy Unit.
Thanks also to Alan Duncan and Howard Reedat the Institute of Fiscal Studies, Lucy Lloyd atthe Daycare Trust, Teresa Smith at theUniversity of Oxford, Jo Blanden and SteveMachin of the London School of Economicsand Political Science, Jim Robertson at KentCounty Council and Tom O’Shea.
The team also acknowledges with thanks theassistance of all who offered advice andcontributed in meetings.
A1.3 Methodology for thereviewThe review team, with key governmentdepartments, carried out a number ofdifferent strands of work and analyses as partof the review.
In defining a rationale for governmentintervention, the review examined:
• current government policies andobjectives that impact on childcare;
• the principles underpinning currentpolicies;
• market failures, including the nature andimportance of them; and
• the body of evidence on the payoffs forchildren from investment in childcare andthe early years.
To complete this work, an important aim wasto develop a clear understanding of the
childcare market. The review team achievedthis by completing:
• a quantification of the size/range of thepotential gap between supply anddemand;
• analysis of how different governmentinterventions might impact on any marketfailures identified;
• analysis of labour market participationdecisions, and the role of demand-sidepolicies; and
• provider economic modelling andsustainability analysis.
It was also important to develop a clearunderstanding of the effectiveness ofdifferent types and qualities of childcare interms of impacts on child development,educational attainment and labour marketoutcomes in later life. One way in which thereview approached this subject was throughundertaking a systematic literature review ofthe evidence on the payoffs of different typesand qualities of childcare.
To contribute to each of these main strandsof work, the review also carried out someinternational benchmarking work.
To design a longer-term vision for childcare,the review team worked with departments to develop potential scenarios and evaluatethem against the range of relevantgovernment objectives.
It was also important to look at the nature ofthe current childcare infrastructure and thereform that would be needed to deliver thevision. Building on earlier policy mappingand auditing work, the team analysedpotential models of accountability andfunding, identified key reforms, and designeda potential framework for developing newsuccess measures and targets.
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ANNEX 2: IMPLEMENTATION PLAN
Annex 2:
Implementation plan
65
Key to acronymsCBI Confederation of British
Industry
CPA Comprehensive PerformanceAssessment
CYPU Children and Young People’sUnit
DfES Department for Education andSkills
DoH Department of Health
DTI Department of Trade andIndustry
DWP Department for Work andPensions
EYDCP Early Years Development andChildcare Partnership
HA Health Authority
HMT HM Treasury
HO Home Office
IR Inland Revenue
LA Local Authority
LGA Local Government Association
LSC Learning and Skills Council
LSP Local Strategic Partnership
ODPM Office of the Deputy PrimeMinister
OGC Office of Government Commerce
PCT Primary Care Trust
PMDU Prime Minister’s Delivery Unit
SBS Small Business Service
SOLACE Society of Local Authority Chief Executives
SR Spending Review
TUC Trade Union Congress
WEU Women and Equality Unit
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Co
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.
•M
onito
r th
e im
pac
t of
chi
ldca
reco
sts
on p
aren
ts’ e
mp
loym
ent
deci
sion
s.
•A
chie
ve s
uffic
ient
wor
kfor
cegr
owth
to
sup
por
t th
e gr
owth
in p
lace
s.
•D
evel
op s
ubsi
dy s
truc
ture
s fo
r ou
t of
sch
ool c
lubs
,ch
ildm
inde
rs a
nd n
urse
ries.
•M
anag
e th
e tr
ansi
tion
from
exis
ting
pro
gram
mes
.
•M
onito
r th
e de
velo
pm
ent
ofne
w p
lace
s an
d to
tal n
umbe
r of
pla
ces.
•En
sure
suf
ficie
nt s
upp
ort
isp
rovi
ded
to e
ncou
rage
the
esta
blis
hmen
t of
pro
visi
on in
the
mos
t de
priv
ed a
reas
.
•D
evel
op a
“sa
fety
net
” fu
ndin
gm
echa
nism
(a
sust
aina
bilit
ygr
ant)
to
help
goo
d ch
ildca
rep
rovi
sion
sur
vive
, an
d en
sure
itis
tra
nsp
aren
t an
d w
ell-
unde
rsto
od.
•C
ontin
ue t
o bu
ild p
aren
ts’
unde
rsta
ndin
g an
d us
e of
child
care
tax
cre
dit.
•C
ontin
ue t
o m
onito
r ta
x cr
edit
take
-up
rat
es a
nd e
ffect
iven
ess.
•Re
view
bar
riers
to
wor
k fo
rm
iddl
e in
com
e p
aren
ts,
incl
udin
g av
aila
bilit
y an
daf
ford
abili
ty o
f ch
ildca
re.
•D
evel
op a
str
ateg
y to
ens
ure
recr
uitm
ent,
and
ret
entio
n, o
fch
ildca
re w
orke
rs.
•En
sure
tha
t ch
ildre
n’s
cent
res
and
exte
nded
sch
ools
act
as
base
s fo
r ch
ildm
inde
r ne
twor
ksan
d w
ider
wor
ker
recr
uitm
ent.
New
inte
r-de
par
tmen
tal u
nit.
IR/H
MT,
with
new
inte
r-de
par
tmen
tal
unit
and
DTI
.
As
abov
e.
WEU
and
new
inte
r-de
par
tmen
tal u
nit.
New
inte
r-de
par
tmen
tal u
nit.
Cen
tral
: D
fES,
HM
T,D
WP.
Loca
l: EY
DC
Ps,
LAs,
pro
vide
rs a
nd p
aren
ts.
HM
T/IR
, D
WP,
DfE
S,D
TI,
WEU
.
Cen
tral
: D
fES,
DW
P,H
MT,
DTI
.
Loca
l: EY
DC
Ps,
LAs,
LSC
s.
At
leas
t 25
0,00
0 ne
wch
ildca
re p
lace
s to
be
esta
blis
hed
by M
arch
2006
(w
ith a
net
gai
nof
at
leas
t 16
0,00
0p
lace
s).
Con
tinuo
us r
evie
w o
fim
pac
t of
chi
ldca
reco
sts
on e
mp
loym
ent
and
pro
vide
rec
onom
ics.
Dev
elop
str
ateg
y in
tand
em w
ith e
xist
ing
activ
ities
in t
his
field
.En
sure
str
ateg
y is
inp
lace
in t
ime
for
incr
ease
in s
tart
-up
inve
stm
ent.
00847_pp65_70 30/10/02 3:52 pm Page 66
Annex 2:
Implementation plan
67
Co
ncl
usio
nO
utp
uts
Act
ivit
ies
Lead
res
po
nsi
bili
tyK
ey s
take
ho
lder
sTi
met
able
Emp
loye
rs t
o be
enc
oura
ged
top
lay
a gr
eate
r ro
le.
Roll
out
child
ren’
s ce
ntre
s to
eve
ryon
e of
the
20
per
cen
t m
ost
dep
rived
war
ds.
•M
ore
emp
loye
rs u
nder
stan
dho
w h
elp
ing
with
chi
ldca
reco
uld
be g
ood
for
thei
rbu
sine
ss.
•M
ore
emp
loye
es h
ave
help
with
info
rmat
ion
abou
t or
cos
ts o
fch
ildca
re.
•M
ore
child
care
pla
ces
are
sup
por
ted
by e
mp
loye
rs.
•Em
plo
yers
pla
y a
grea
ter
role
inlo
cal d
ecis
ions
abo
ut c
hild
care
pro
visi
on.
•N
ew b
uild
chi
ldre
n’s
cent
res,
exp
ande
d N
eigh
bour
hood
Nur
serie
s, a
nd e
xpan
ded
Sure
Star
ts.
To e
nsur
e th
at b
y M
arch
2006
at
leas
t 65
0,00
0 ch
ildre
nw
ill b
e co
vere
d by
chi
ldre
n’s
cent
re s
ervi
ces.
•Th
e W
ork-
Life
Bal
ance
Cam
pai
gn w
ill r
aise
aw
aren
ess
of t
he b
usin
ess
case
for
child
care
.
•IR
to
cont
inue
to
mon
itor
the
effe
ctiv
enes
s of
cur
rent
tax
exem
ptio
ns.
•M
ore
pub
licity
to
emp
loye
rs
on h
ow t
hey
can
help
the
irem
plo
yees
get
info
rmat
ion
abou
t ch
ildca
re.
•D
evel
op f
inan
cial
mod
el:
clar
ifyfe
e m
odel
for
pla
ces
and
fund
ing
mod
el.
•St
affin
g an
d m
anag
emen
t:id
entif
y co
nstr
aint
s/ba
rrie
rs
to r
ecru
itmen
t an
d de
vise
inte
rven
tions
whe
re n
eces
sary
.
•Id
entif
y tim
etab
le,
criti
cal p
ath
and
mile
ston
es f
or r
oll-o
ut o
fp
rogr
amm
e.
•C
larif
y ar
rang
emen
ts f
orin
tegr
atin
g se
rvic
es a
roun
dex
istin
g p
rovi
sion
.
•En
sure
tha
t ch
ildre
n’s
cent
res
targ
et s
ervi
ces
on c
hild
ren
inne
ed,
but
also
ext
end
toch
ildre
n fr
om a
wid
e ra
nge
ofba
ckgr
ound
s.
•D
evel
op a
nd im
ple
men
tap
pro
pria
te m
onito
ring
and
eval
uatio
n sy
stem
s, e
nsur
ing
com
pat
abili
ty w
ith e
xist
ing
pro
gram
mes
.
•D
evel
op b
rand
ing
reco
mm
enda
tions
and
com
mun
icat
ion
stra
tegy
.
DTI
, W
EU,
IR,
new
inte
r-de
par
tmen
tal
unit.
New
inte
r-de
par
tmen
tal u
nit.
DfE
S, D
WP,
DTI
, IR
,H
MT.
CBI
, TU
C,
SBS.
Emp
loye
rs,
emp
loye
es.
Cen
tral
: D
oH,
DW
P,D
fES.
Loca
l: Su
re S
tart
par
tner
ship
s, E
YDC
Ps,
LAs.
Wor
k-Li
fe B
alan
ceC
amp
aign
– on
goin
g:p
rogr
ess
to b
em
easu
red
thro
ugh
rep
eat
Wor
k-Li
feBa
lanc
e su
rvey
s.
Cov
erag
e to
rea
ch a
tle
ast
650,
000
child
ren
by M
arch
200
6.
00847_pp65_70 30/10/02 3:52 pm Page 67
Deli
veri
ng fo
r ch
ildr
en an
d fa
mili
es
68
Co
ncl
usio
nO
utp
uts
Act
ivit
ies
Lead
res
po
nsi
bili
tyK
ey s
take
ho
lder
sTi
met
able
Resp
onsi
bilit
y fo
r ch
ildca
re g
iven
to
loca
l aut
horit
ies.
Gov
ernm
ent
to im
pro
vein
tegr
atio
n of
initi
ativ
es a
ndfu
ndin
g.
Imp
lem
ent
a ne
w p
erfo
rman
cem
anag
emen
t fr
amew
ork.
A c
lear
fra
mew
ork
of r
ewar
ds
and
sanc
tions
in r
elat
ion
to L
Ap
erfo
rman
ce o
n ch
ildca
re.
Revi
ew p
rogr
ess
tow
ards
the
vis
ion
at 2
006
Spen
ding
Rev
iew
.
•C
lear
acc
ount
abili
ty a
t th
e lo
cal
leve
l.
•H
ighe
r lo
cal p
rofil
e fo
rch
ildca
re.
•A
new
inte
r-de
par
tmen
tal u
nit
brin
ging
tog
ethe
r Su
re S
tart
,Ea
rly Y
ears
and
Chi
ldca
re.
•In
crea
sing
ly in
tegr
ated
fun
ding
stre
ams.
•In
crea
sed
busi
ness
sup
por
t fo
rp
rovi
ders
.
•C
lear
hie
rarc
hy o
f m
eani
ngfu
lta
rget
s.
•Im
pro
ved
info
rmat
ion
man
agem
ent.
•Sy
stem
of
rew
ards
and
sanc
tions
.
•St
ockt
ake
of p
rogr
ess
to d
ate.
•A
gree
the
ap
pro
pria
tem
echa
nism
s, s
ucce
ss c
riter
iaan
d tim
esca
les
for
givi
ngre
spon
sibi
lity
to L
As.
•W
ork
clos
ely
with
LA
s to
con
sult
with
loca
l par
tner
s ab
out
the
new
arr
ange
men
ts.
•D
efin
e tim
etab
le f
or s
imp
lifyi
ngfu
ndin
g st
ream
s.
•M
anag
e th
e in
tegr
atio
n of
fund
ing,
and
ens
ure
that
key
stak
ehol
ders
are
cle
ar a
bout
the
chan
ges.
•En
sure
pro
vide
rs a
re g
iven
grea
ter
sup
por
t th
roug
h th
ep
roce
ss o
f id
entif
ying
and
app
lyin
g fo
r fu
ndin
g.
•D
efin
e th
e ra
nge
and
hier
arch
yof
cen
tral
gov
ernm
ent
targ
ets.
•Re
view
the
tar
getr
y/p
erfo
rman
ce in
form
atio
nre
qui
rem
ents
to
mee
t th
e ne
eds
of t
he n
ew r
egim
e.
•C
onsi
der
pla
ns f
or p
ublis
hing
per
form
ance
info
rmat
ion.
•D
esig
n a
syst
em in
line
with
the
CPA
, w
orki
ng c
lose
ly w
ith O
GC
and
the
Aud
it C
omm
issi
on t
ode
velo
p t
he f
ram
ewor
k.
•C
onsu
lt on
gui
danc
e on
how
the
new
fra
mew
ork
will
oper
ate.
•Re
view
pro
gres
s ag
ains
t ta
rget
s,an
d re
vise
pla
ns t
o re
flect
outc
ome
from
the
sto
ckta
ke.
New
inte
r-de
par
tmen
tal u
nit.
New
inte
r-de
par
tmen
tal u
nit.
New
inte
r-de
par
tmen
tal u
nit.
New
inte
r-de
par
tmen
tal u
nit.
New
inte
r-de
par
tmen
tal u
nit.
Cen
tral
: D
fES,
DW
P,H
O,
OD
PM,
HM
T.
Nat
iona
l: LG
A,
SOLA
CE.
Loca
l: LA
s, E
YDC
Ps,
HA
s, S
ure
Star
tPa
rtne
rshi
ps,
PC
Ts,
LSPs
, bu
sine
ss,
volu
ntar
y se
ctor
.
Cen
tral
: A
ll ce
ntra
lde
pts
esp
ecia
lly –
DfE
S, C
YPU
, D
WP,
DH
,D
TI,
OD
PM,
HM
T.
Loca
l: LA
s, E
YDC
Ps,
LSPs
, PC
Ts,
pro
vide
rs,
par
ents
.
Cen
tral
: A
ll ce
ntra
lde
pts
esp
ecia
lly –
DfE
S, D
WP,
DH
, D
TI,
HM
T, O
GC
, O
DPM
,PM
DU
.
Loca
l: LA
s, E
YDC
Ps.
Cen
tral
: A
ll ce
ntra
lde
pts
sp
ecia
lly –
DfE
S,D
WP,
DH
, D
TI,
HM
T,O
DPM
.
Loca
l: LA
s.
Cen
tral
: D
fES,
DW
P,D
H,
HM
T.
Tim
etab
le t
o be
defin
ed f
ollo
win
gdi
scus
sion
with
key
stak
ehol
ders
.
Tim
etab
le t
o be
defin
ed f
ollo
win
gdi
scus
sion
with
key
stak
ehol
ders
.
Cen
tral
gov
ernm
ent
targ
ets
to b
e de
fined
and
pub
lishe
d in
autu
mn
2002
.
Tim
etab
le t
o be
defin
ed f
ollo
win
gdi
scus
sion
with
key
stak
ehol
ders
.
By F
ebru
ary
2006
.
00847_pp65_70 30/10/02 3:52 pm Page 68