Higher spending and new entitlements: coalition policy on early education

Despite the increasingly worrying position of the public finances, the urge to spend more appears to be hardwired into politicians and can be resisted only with the greatest of exertions. One area where the Autumn Statement outlines plans to increase public spending is childcare and early education.

As I suggested in an earlier blog post, childcare policy is in a mess. Its rationale is confused – is it about ‘fairness’, or about improving later educational performance and thus boosting social mobility (the evidence of its potential here is not overwhelming), or just about getting mothers back into work? Should government be involved at all – and if so, as a provider or simply a funder? What should the content be? Does it matter? Do we really need a national curriculum for the Zingzilla generation?

Throwing money at the area without a clear objective and a means of assessing its success is not what we should be doing, but it seems to be what’s happening. The government had already committed to offering free nursery or early education places (the announcements were characteristically hazy) to the most disadvantaged two-year-olds. Now, at an estimated extra cost of £380 million a year, this provision is to be extended to a total of 260,000 children – around 40% of the age group.

This is a pretty large disadvantaged group. Quite how the lucky recipients are to be chosen has not been decided: consultation is taking place. The usual criterion in these cases is eligibility for free school meals, which is related to families receiving various welfare benefits or with working tax credits but earning below a low ceiling. Only approximately 20% of children are currently eligible, so this new offer will require some additional as-yet-unexplained mechanism to determine who is eligible to join this wider group.

How many of these extra places will be taken up is anybody’s guess. Many of this 40% will already be in some form of childcare already and may stick with it, despite the costs they currently incur. The arrangements for new places are unlikely to be ideal for parents. Many of the poorest are in minority ethnic groups, where family childcare arrangements may anyway be preferred at very young ages. If provision is confined to the 15 hours a week currently offered to all 3 and 4 year-olds, it will not be particularly helpful for parents who work or might be tempted into working. If the places are largely in nursery departments of primary schools, as is distinctly possible, they may be unsatisfactory in such important matters as nappy-changing (most two-year-old starters will not be toilet-trained) and personal attention, where strict rules about being alone with children and touching them are likely to apply.

To the extent that the numbers in ‘free’ formal childcare are expanded, this is likely to increase the pressure on nurseries and other providers – and raise prices for those who have to pay for their own children to be looked after. There is already a shortage of affordable childcare in many areas, mainly as a consequence of regulation which has raised costs, increased entry barriers and driven out many informal childcare providers. Those who lose out will be the squeezed middle once again. City slickers and the Notting Hill crowd will still have their nannies and au pairs, but working people on modest and shrinking real incomes may find paid childcare becomes an impossibility.

It seems bizarre that, at a time when all existing state spending should be under intense scrutiny, we are blithely expanding state spending into another new area and creating an entitlement which will be difficult to remove when, as seems likely, it becomes clear that it is not proving a huge success in even its own confused terms.

One can only conclude that this is a sop by George Osborne to Lib Dem activists – or else that David Cameron is desperately seeking to keep Mumsnet on board at a time when women voters seem to be turning against him.

Len Shackleton is an Editorial and Research Fellow at the IEA and Professor of Economics at the University of Buckingham. He was previously Dean of the Royal Docks Business School at the University of East London and prior to that was Dean of the Westminster Business School. He has also taught at Queen Mary, University of London and worked as an economist in the Civil Service. His research interests are primarily in the economics of labour markets. He has worked with many think tanks, most closely with the Institute of Economic Affairs, where he is an Economics Fellow. He edits the journal Economic Affairs, which is co-published by the IEA and the University of Buckingham.

1 thought on “Higher spending and new entitlements: coalition policy on early education”

  1. Posted 02/12/2011 at 13:39 | Permalink

    I found this measure infuriarating for three reasons.

    1. The last thing we want is another load of means-testing for benefits in kind.

    2. There was no call for it. The Major government eventually caved in (with a voucher system) after years of pressure. I did not approve, but the pressure had become impossible to resist.

    3. The obvious way to increase access to child care is to de-regulate it. But why choose de-regulation when you can just spend some more money instead?

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