Overhaul childcare funding to ensure best quality service, says major new report

Following the example of Norway and Germany could raise the standard of education for poorer children


More than £5bn in public funding for childcare should come with "strings attached" to ensure that children and parents get the best quality service, a major report will say this week.

The Resolution Foundation calls for state subsidies for nurseries and childminders to be awarded on the basis of the qualifications of staff and the standards of care.

The Government currently funds childcare through subsidised hours, tax credits and childcare vouchers, at a flat rate without conditions, to the tune of more than £5.5bn a year. But previous research has shown that children in disadvantaged areas receive the poorest quality childcare, while nursery workers are on low wages and are less likely to be graduates. The think-tank's report says the no-strings-attached basis, with no correlation between funding and standards of care and education, has led to poor competition, which has driven down quality.

Instead, Britain should borrow from countries such as Norway, where private nurseries receive state money only if their staff are on similar wages to government-run institutions, and Germany, where there are three levels of childcare qualification which are indexed to pay, providing greater incentives to continue training. Similarly, in New Zealand, state subsidies are paid in different quality bands, with higher levels of funding going to nurseries with better qualified staff.

However, to ensure that the best places are not swamped by children from wealthier families, a new British system would have to help disadvantaged children. In France, for example, nurseries with greater social mixes receive more state subsidy. A Policy Exchange report last year found that middle-class families receive better quality childcare because wealthier parents can pick more successful nurseries, while poorer parents choose only the cheapest provider.

This week's Resolution Foundation report will suggest creating a greater link between disadvantage, quality and subsidy to boost the development of poorer children.

This could mean the recalibration of the early years pupil premium in order to fund more qualified staff in nurseries with larger numbers of disadvantaged children and who show the biggest difference in their development, rather than offering an additional per child supplement. The report also looks to the US, where states compete for federal funds to provide better quality childcare.

The think-tank says a hybrid of systems from these countries would drastically improve childcare in Britain. Research has shown that better care plays a vital part in a child's cognitive and social development.

The report concludes: "Public funding should come with 'strings attached', notably around improvements in staff qualifications, but the state will have to invest to ensure that the sector can raise its game for the benefit of children and families."

The coalition introduced 15 free hours of childcare a week for all three- and four-year-olds and the poorest two-year-olds. Labour says that if it wins power it will extend the subsidy to 25 free hours a week, paid for by extending the bank levy.

This government has pledged to fund up to £2,000 a year per child in tax-free care for around two million families from next year and to pay 85 per cent of childcare costs for 1.5 million families receiving universal credit from 2016.

But the Resolution Foundation report, written by Kitty Stewart of LSE and Ludovica Gambaro of the Institute of Education, makes clear that simply increasing funding for childcare will not mean improving early years education.

While 90 per cent of childcare provision comes from the private and voluntary sector, evidence suggests that state childcare provision, through school nurseries and Sure Start centres, is generally of higher quality, the think-tank says.

Dr Stewart said: "The UK's early years education is failing to reach the standards achieved in other countries, in spite of the large, and increasing, amount of public money spent in subsidising providers. That needs to change, but we don't have to tear up the existing system in order to improve it. We can overhaul the way we fund and regulate our childcare provision, drawing on the best evidence of what has worked in other countries and applying it to the UK's circumstances."

Vidhya Alakeson, deputy chief executive of the Resolution Foundation, said: "Even larger amounts of public money will be diverted into childcare in the coming years to support parents who want to work more. That's welcome, but this should also be a turning point where we review and revise how we deploy the extra money so that it's of maximum benefit."

ebookA delicious collection of 50 meaty main courses
Life and Style
ebookNow available in paperback
Arts and Entertainment
Billie Piper as Brona in Penny Dreadful
tvReview: It’s business as usual in Victorian London. Let’s hope that changes as we get further into the new series spoiler alert
Life and Style
A nurse tends to a recovering patient on a general ward at The Queen Elizabeth Hospital in Birmingham
Arts and Entertainment
No Offence
tvReview: No Offence has characters who are larger than life and yet somehow completely true to life at the same time spoiler alert
Chuck Norris pictured in 1996
Arts and Entertainment
Sarah Lucas, I SCREAM DADDIO, Installation View, British Pavilion 2015
artWhy Sarah Lucas is the perfect choice to represent British art at the Venice Biennale
A voter placing a ballot paper in the box at a polling station
Arts and Entertainment
The Queen (Kristin Scott Thomas) in The Audience
theatreReview: Stephen Daldry's direction is crisp in perfectly-timed revival
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?

ES Rentals

    Independent Dating

    By clicking 'Search' you
    are agreeing to our
    Terms of Use.

    iJobs Job Widget
    iJobs General

    SThree: Trainee Recruitment Consultant - Dublin

    £13676.46 - £16411.61 per annum + OTE: SThree: SThree Trainee Recruitment Cons...

    Ashdown Group: Marketing or Business Graduate Opportunity - Norwich - £22,000

    £18000 - £22000 per annum + training: Ashdown Group: Business and Marketing Gr...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + Commission: SThree: Are you great at building rela...

    Ashdown Group: Database Analyst - Birmingham - £22,000 plus benefits

    £20000 - £22000 per annum + excellent benefits: Ashdown Group: Application Sup...

    Day In a Page

    General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

    Miliband's unlikely journey from hapless geek to heart-throb

    He was meant to be Labour's biggest handicap - but has become almost an asset
    General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

    On the margins

    From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
    Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

    'This is the battle of young Egypt for the future of our country'

    Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
    Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

    Why patients must rely less on doctors

    Improving our own health is the 'blockbuster drug of the century'
    Sarah Lucas is the perfect artist to represent Britain at the Venice Biennale

    Flesh in Venice

    Sarah Lucas has filled the British pavilion at the Venice Biennale with slinky cats and casts of her female friends' private parts. It makes you proud to be a woman, says Karen Wright
    11 best anti-ageing day creams

    11 best anti-ageing day creams

    Slow down the ageing process with one of these high-performance, hardworking anti-agers
    Juventus 2 Real Madrid 1: Five things we learnt, including Iker Casillas is past it and Carlos Tevez remains effective

    Juventus vs Real Madrid

    Five things we learnt from the Italian's Champions League first leg win over the Spanish giants
    Ashes 2015: Test series looks a lost cause for England... whoever takes over as ECB director of cricket

    Ashes series looks a lost cause for England...

    Whoever takes over as ECB director of cricket, says Stephen Brenkley
    Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

    Fishing is on Nigel Farage's mind

    Ukip leader casts a line to the disaffected
    Who is bombing whom in the Middle East? It's amazing they don't all hit each other

    Who is bombing whom in the Middle East?

    Robert Fisk untangles the countries and factions
    China's influence on fashion: At the top of the game both creatively and commercially

    China's influence on fashion

    At the top of the game both creatively and commercially
    Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

    The man known as GOD has a reputation for getting the job done

    Lord O'Donnell's three principles of rule
    Rainbow shades: It's all bright on the night

    Rainbow shades

    It's all bright on the night
    'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

    Bread from heaven

    Dutch survivors thank RAF for World War II drop that saved millions
    Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

    How 'the Axe' helped Labour

    UK will be 'run for the wealthy and powerful' if Tories retain power