Failed: The great free nursery revolution

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It was meant to make our children smarter. But 14 years and billions of pounds later, the long-term benefits just don't add up.

It costs £1.9bn a year and has been heralded as the best way of transforming children's chances and driving up standards in schools. But a new report from the National Audit Office has cast doubt over whether the Government's drive to provide free nursery places for three and four-year-olds does anything to improve results when children reach school age.

Although tests have shown five year-olds are progressing faster since the introduction of free nursery places, the results of primary school assessments of all seven-year-olds have seen almost no improvement since 2007.

Four-year-olds have been entitled to 12.5 hours of free early education since the scheme's introduction by the then Labour Government in September 1998, and all three-year-olds since April 2004.

The scheme was expanded last November by the Conservative Chancellor George Osborne. He announced that two-fifths of two-year-olds would receive 15 hours of early education a week saying: "Education. Early years learning. That is how you change the life chances of our least well off – and genuinely lift children out of poverty."

However, the NAO report warns that the jury is still out on whether these long-term results will be achieved. It concludes that "the Department [of Education] intended the entitlement to have lasting effects on child development throughout primary school and beyond. It is not yet clear, however, that the entitlement is leading to longer-term educational benefits, and the Department does not yet have robust measures to demonstrate whether the longer-term benefits it expects are being realised."

The report says that the Government must address the "impact on attainment in later years" if its free nursery places are to achieve value for money.

Although take-up of the places has been high – sustained at 95 per cent since 2008, despite an 8 per cent increase in eligible children – children from the most disadvantaged families are less likely to attend. Children from low income and workless households and those without a car are less likely to take up places.

The report also warns of a post-code lottery and poor information for parents about which nurseries are best.

Amyas Morse, head of the National Audit Office, said: "The Department for Education needs to do more to put itself in the position to assess whether the forecast for long-term benefits of free education for three- and four-year olds are being achieved. [This is] necessary if it is to get the best return from the £1.9 billion spent each year." Neil Leitch, chief executive of the Pre School Learning Alliance, argued that the problem lies in the early years of primary school. He said: "This report endorses the important contribution of the early years sector. It seems that children get to five and off they go to school and it seems to set a lot of children back. Government's fixation with school readiness worries me. Rather than constantly asking whether children are ready for school, I think we need to reconsider whether schools are necessarily ready for children. Maybe Michael Gove and others need to reconsider how children make the transition from nursery to school."

Megan Pacey, chief executive of Early Education, agreed that many children went through a "bumpy patch" when they started formal schooling. She said: "I think the profile results [of five-year -olds] have improved greatly. We have to take that as a measure of success. But there is a big question in my mind about the transition – when children move into statutory schooling, their progress seems to stall. It is almost as if some children are a bit shell shocked about the adjustment they have to make. "The way children are taught from the age of five is not perhaps the way they are going to learn."

However, critics of the phonics method of teaching reading, which became compulsory in 2007, have also blamed the Government's promotion of phonics as having contributed to the stalling of the primary school results for seven-year-olds. But Sue Palmer, a literacy consultant and author of Toxic Childhood, would like to see a radical rethink of the early years of primary school, arguing that the Government's "preoccupation with school readiness" is damaging children's development. She said: "Early years people look at everything from a developmental angle. Everyone else looks at it from an educational perspective. Unless children are cognitively, socially, emotionally and physically ready, they are not going to be ready for formal learning. In enlightened countries like Scandinavia they believe that seven is the right age to start formal learning. In this country we start far too early and it causes all sorts of problems. "We should let children enjoy their childhoods."

Children's Minister Sarah Teather said the Government must examine in more detail "how to make sure the significant improvements we are seeing at five feed through into better results at seven".

Childcare: World view

Norway places great emphasis on its "kindergartens", guaranteeing care for all children aged one and over to instill the process of being taught from a young age. They are also seen as important for allowing mothers to go back to work earlier, helping to improve equality between the sexes. By contrast, pre-school care in the US is provided by the state only for low-income families under the Head Start programme, introduced in 1965.

However, by the age of four, around 70 per cent of children are involved in pre-school care. The provisions can differ from state to state, however, as they are not run on a national level.

Around 90 per cent of children in Japan are involved in nursery education, though only half is provided by the state, with the rest being privately run.

Pre-school education is not compulsory in France, but almost 100 per cent of children between the ages of three and five are thought to attend, with free schools available to most parents throughoutthe country.

Case study: Learning is not just about sitting with a pen in your hand

Bernadette Duffy is head of the Thomas Coram Children's Centre, near King's Cross in central London

"Giving children a great childhood is an important outcome in itself. When you are very little it is important to enjoy what you do on a day-to-day basis.

"I think the things I feel particularly satisfied about are that we are helping children from very disadvantaged backgrounds. Watching them grow and thrive in this nourishing atmosphere has been fantastic so that they can start school at the same level as their peers – or in some cases even ahead of them.

"I don't know why the results of nursery education for seven-year-olds have not been improving like those of the five-year-olds.

"Luckily for us our local primary schools are great and work with children very creatively in key stage one [five- to seven-year-olds].

"Up to the age of seven, children have a very similar way of learning so it is important to have continuity so that they can build on the success of their early years.

"We have a very rigorous approach to learning in the early years. I think some people can think that if children are not sitting at a desk with a pen and paper in their hands then they are not learning. Learning does not always take place in that context."

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