The high cost of nursery childcare and early education in England: getting the worst of all possible worlds

The Observer reports today a worrying double-whammy: fees for parents using nurseries in England are incredibly high, yet nurseries (and childminders) are struggling to stay in business: "A quarter of British nurseries made a loss last year and the average salary of childminders was just £7,600, yet parents in the UK pay more for childcare than most of their European counterparts, according to a government report" [read more]. 


Further to this, I was told (informally) by a civil servant at the DFE a couple of years back that English sector is now one of the most subsidised in Europe. So how have we managed to get to this position, which feels truly like the worst of all possible worlds? 

The Observer gives a rather partial account, I think. For a start, you have to disentangle what early childhood services are actually for. Just childcare? Or childcare with early education, too? The recent National Audit Report which questioned whether the taxpayer has had good money from funding free nursery places for three and four year olds clearly assumes it should be early education as well as childcare. They conclude that value for money has been not been achieved because improvements in school test results at the end of Key Stage One have flat-lined [see my post in March about the NAO report]. In other words, for the NAO this is not just about childcare - it is about a positive benefit to children's development and education over the longer term.


We know fairly conclusively, that for childcare and early education to have positive outcomes for the child's learning, it will have to be pricey. In an early years setting, it will involve qualified teachers and qualified nursery nurses. We also know that poorer quality settings will provide no benefits for children under three, and only a poor level of benefit for older children. I think this has been demonstrated pretty conclusively by the EPPE Project and by the DFE-sponsored Evaluation of the Two Year Old Pilot. Interestingly, Neil O'Brien from the thinktank Policy Exchange concludes, in a recent article in the Telegraph, that successful examples of early years education and childcare from around the world look very different to the English approach:  "they were more expensive, more education-focused, better targeted on the poorest, and they employed more highly qualified teachers" [read more].


So, given the general reluctance of right-wing thinktank directors to propose higher levels of state funding when writing for the Telegraph, it looks like one argument has been conclusively won: quality in the early years, and the associated long-term benefits, will not come cheap.  What a shame that the Observer's piece is so focused on the economics of childcare that it doesn't even consider the question of what will (or will not) benefit children.


But in terms of both the limited view offered by the Observer, or the wider perspective I would advocate, the English approach has been a total failure. That approach, championed by the Labour government throughout its three terms in office, and mostly continued by the coalition government, is characterised by a reluctance to fund state-delivered services. Maintained nursery schools (and indeed maintained day nurseries) have been reducing in number every year since 1997. Instead, both the old and the new regime prefer that childcare and early education should be provided by a mix of private, community and voluntary groups, subsidised by central government directly (through the nursery education grant) and indirectly (through the tax credit system). This has produced a complex, bureaucratic, expensive and highly ineffective system. It is impoverishing parents, who are spending a quarter of their income on childcare; it is expensive and complex for local councils to administer; a huge drain on the DFE budget; and despite all that, it's not even profitable for the private companies and self-employed childminders. What could be worse?


In case you were stuck on that last question, have a look at Tory MP Elizabeth Truss's suggestion that the whole field should be deregulated. If quality is an issue now, imagine how things would be if the main aim was to provide childcare at the lowest possible price? If you spend much time with babies and toddlers - can you imagine caring for more than three of them at the same time, on your own, and giving each child a reasonably positive experience? I do; and I can't.


Instead, we should be persuaded by Neil O'Brien - we need a system that benefits the children, with highly qualified staff and a proper focus on early education. Oddly enough, we have had that system for many years in England - state-funded, maintained nursery schools. The EPPE research clearly shows that these are the best places for young children to be, and that when Children's Centres were based around nursery schools, they too were highly effective. So here is the strangest fact of all: the number of maintained nursery schools has been falling every year since 1997, which is exactly when England started to spend more money on the early years. We have had everything in place: political will, funding, and research evidence. But we took the wrong turn.