Covid-19 has brought many new challenges, and brought old problems into focus. Our early years system is sick. If we don’t act, it will continue to stagger along like a patient discharged too early from hospital.
Let’s start with the money. Everyone is unhappy about funding in the early years.
Private nurseries get a government subsidy for “funded hours”, like the 15-hour entitlement for all children aged 3 and 4. Parents may get further subsidies for the hours they pay for, through the tax-free childcare and benefits system.
But small private nurseries are desperately short of money. They struggle to invest enough in training. Wages are falling below those in the retail sector, leading to an exodus of qualified staff. In the maintained sector, nursery schools are collapsing. Three-quarters have either an overall or an in-year budget deficit.
EYFS budget deficits despite increased funding
Yet the government spends increasingly huge amounts on the early years. The Institute for Fiscal Studies commented in 2019 that “spending on free childcare rose from almost nothing in the 1990s to £1.6 billion in 2009–10 (in 2019–20 prices). Since then, it’s increased by more than 130 per cent and now stands at £3.7 billion.”
Once you add in the spending on tax relief, benefits that meet the costs of childcare, and free places for disadvantaged two-year-olds, the figure rises to £5.4 billion. The most recent comparative data from the Organisation for Economic Cooperation and Development (OECD) puts the UK at roughly the EU average.
A very troubling analysis by Professor Eva Lloyd, published as an opinion piece by the Nuffield Foundation, argues that the "UK private childcare market is viewed commercially as offering excellent investment opportunities where serious profits can be made".
This raises the concern that large-scale providers may be extracting profits from taxpayer funding. Simultaneously, “high-quality, accessible and affordable services are increasingly out of reach for low- and middle-income families”.
The worst of all worlds
We have the worst of all worlds: high government expenditure, unaffordable services, and a sector on the edge of collapse. England’s world-famous maintained nursery schools may all be closed by next April, when their guaranteed funding ends, although ministers have promised a long-term solution.
As we emerge from the Covid-19 pandemic, we must think boldly and strategically about the early years. We have abundant research to tell us that investing in early education is one of the smartest ways to promote social mobility.
As Nobel Laureate James Heckman argues: “The highest rate of return in early childhood development comes from investing as early as possible, from birth through age 5, in disadvantaged families. Starting at age 3 or 4 is too little too late.”
As a headteacher, I would put it differently: I don’t see children as investments. I see it as our duty to treasure every child. I want our future world to be made up of caring, educated and responsible citizens, not just pound signs and lots of zeros. Whichever argument you prefer, now is the time to act decisively to build a stronger and fairer early years system.
Dr Julian Grenier is the headteacher of Sheringham Nursery School and Children's Centre. He co-leads the East London Research School