WBG says funding childcare and early years is vital to economic growth, but can only be achieved with adequate support for those on low incomes

Date Posted: Wednesday 26th July 2023

Early Education and Childcare

The Women’s Budget group responds to the Education Select Committee’s report on support for childcare and early years published today.

The report concludes the cross-party Committee’s inquiry that was launched amidst warnings that state and private childcare and early years providers had been closing at an alarming rate. During the course of this inquiry the Government announced the largest expansion in public investment in childcare on record through an extension of its funded hours. However, the report concludes that the system remains complex with further issues to resolve.

The report makes a number of welcome recommendations to Government, including to:

  • Increase the childcare entitlement subsidy for providers, ensuring it’s set at an adequate level to cover the expansion of the ‘free hours’ entitlement announced in the Spring Budget 2023
  • Review the Government’s proposed staff:child ratio for two year-olds from 1:4 to 1:5, ensuring the changes are reversed if quality of provision and education declines.
  • Boost staff career development to attract and retain more people in the profession by expanding the Early Careers Framework to all staff working in Ofsted-registered early years settings.

In response to the report, Dr Mary-Ann Stephenson, WBG Director, said,

“We very much welcome this report and are glad to see MPs giving the focus and attention that reform to the childcare and early years sector so desperately needs. And we are pleased to see that our analysis and recommendations have been included and drawn upon throughout, especially regarding the need to adequately fund the increased provision. We estimate that to fund the current hours at their true cost will require an additional £1.82 billion, which includes the impact of inflation and paying at least the national living wage to early years workers.”

“Funding early education and childcare is an investment in social infrastructure that is vital to unlocking growth as we emerge from the cost of living crisis. The OBR judged that the Government’s childcare expansion announced in the Spring Budget would have a greater impact on GDP than anything else in the budget[1], predicting that by 2027-28 the reforms could result in “around 60,000” people entering employment for at least 16 hours a week.” But the underfunding of current plans put those gains at risk, leaving parents struggling to find places as nurseries collapse[2].”

“We are pleased to see the report reflected the concerns made by WBG and other organisations about the inequality of provision for those on low incomes. However, we are disappointed that this did not translate into the Committee making a specific recommendation to address this issue. Restricting the eligibility criteria for the full 30 hours to working parents risks embedding inequalities for future generations. High quality provision is particularly important for children from disadvantaged backgrounds and in closing the attainment gap yet, as the report itself highlights, years of under-funding has led to more providers closing in disadvantaged areas where it is harder to charge parents high fees to cross-subsidise ‘free’ hours.”

“We won’t be able to build a stronger more resilient economy without enabling all children to access early years education.”


For more information or further comment, contact

erin.mansell@wbg.org.uk / press@wbg.org.uk / 07799116631


About the Women’s Budget Group

The UK Women’s Budget Group (WBG) is the UK’s leading gender equality think tank, providing evidence and analysis on women’s economic position and proposing policy alternatives for a gender-equal economy. We act as a link between academia, the women’s voluntary sector and progressive economic think tanks.


[1] https://obr.uk/efo/economic-and-fiscal-outlook-march-2023/

[2] https://wbg.org.uk/media/press-releases/wbg-finds-government-funding-for-early-education-and-childcare-falls-short-by-5-2bn/