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National living wage to increase to at least £11 per hour next year, Chancellor confirms

Chancellor Jeremy Hunt has confirmed plans to increase the national living wage to at least £11 per hour from April 2024.

The change, which will impact over two million workers, was confirmed during the Chancellor’s keynote speech at the Conservative Party Conference.

Currently, the national is currently £10.42 and applies to all workers aged 23 and over. The government has said that the increase is based on the latest forecasts of the Low Pay Commission, an independent advisory group.

Commenting, Neil Leitch, CEO of the Early Years Alliance, said: “While we absolutely support the principle of all staff receiving a fair and reasonable wage, the fact is that without adequate government funding, this increase in the national living wage is likely to spell disaster for the early years.

“With salaries accounting for around three-quarters of overall costs in early years settings, and with so many early years professionals on or near the national living or minimum wage, any increase in statutory wage requirements will always have a huge impact on overall delivery costs in the sector. And yet, despite this, over the last six years, average early years funding rates have increased by just 14%, compared to a nearly 40% rise in the national living wage over the same period.

“There is no question that those working in the early years are educational professionals who absolutely deserve a wage that reflects the value of the work that they do – but unless the government ensures that funding for the sector rises in line with wage increases, what should be a positive development for the sector could end up marking the final nail in the coffin for settings across the country.”

Early entitlement expansion fails to directly benefit the poorest families, says IFS

The government’s plans to extend the early entitlement offers to one- and two-year-olds continue to prioritise supporting working parents rather than directly aiding the most disadvantaged, low-income families, according to a report by the Institute for Fiscal Studies (IFS).

Early years spending update: Budget reforms and beyond forms part of the IFS’ annual series of updates on education spending, funded by the Nuffield Foundation.
The report states that “the poorest third of families will see almost no direct benefit from the new entitlements”, while the volume of disadvantaged two-year-olds eligible for a funded early education place has halved between 2015 and 2023.

It also notes that while the new entitlements will directly benefit just over half of parents with a child aged between nine months and two years, families earning less than £20,000 a year will only account for a fifth of this. The remaining four-fifths is comprised of families with household incomes above £45,000.

The research additionally states that, while funding rates for children aged two and under are set to be significantly above what the private market charges in 2024-25, funding for three- and four-year-olds will be 11% lower in 2024-25 than in 2012-13.
The IFS warns that with government set to pay for up to 80% of early years provision in England, it’s vital that funding rates for these entitlements are set at the correct rate.

Elaine Drayton, IFS Research Economist and an author of the report, said: “As the free entitlement expands, the government will be setting the price for more and more formal pre-school childcare hours – and the risks of getting the funding rates wrong will just get bigger and bigger.”

Labour announces plan for new early years review

Labour has announced plans for a large-scale review into the early years sector, ahead of next year's general election.

The review – which was announced by shadow education secretary Bridget Phillipson at Labour's annual conference in Liverpool – will be chaired by Sir David Bell, the former chief inspector of Ofsted, and the former permanent secretary at the Department for Education.

Labour said its review would develop a plan for the upcoming expansion of the early entitlement offers, consider major reform of the early years workforce and inform the party's plan to deal with challenges around the lack of availability of early years places.

The party also plans to look at ways to use spare capacity in primary schools due to falling birth rates to provide additional early years places and to remove restrictions on local authorities from opening nursery provision.

The review will consider major reform of the childcare workforce as well as inform Labour’s plan deal with the lack of available childcare in England where there are two children for every childcare place.

Bridget Phillipson MP, Labour’s Shadow Education Secretary, said: “Our ambition starts, as education starts, at the beginning of all our lives; our childcare system must be about life chances for children, as well as work choices for parents.

“That is why I am determined that new investment in childcare comes with ambitious reform, to ensure early education is available in every corner of our country for every family and every child, to drive up standards for our youngest children and for the amazing people who support and teach them.

“And that focus on high and rising standards is why today I’m announcing that Sir David will lead Labour’s work to develop the plan we need, for the workforce we need, for the qualifications they’ll have, for the settings where it’ll happen, to deliver our ambition for a modernised childcare system, from the end of parental leave to the end of primary school.”

“Flexible, affordable and fair” early education plans at forefront of Lib Dem’s autumn conference pledges

Proposals to improve education and ease the costs of early education led the Liberal Democrat’s policy pledges at their autumn party conference.

On Saturday 23 September, Liberal Democrat education spokeswoman Munira Wilson spoke of the party’s vision of an early education and childcare sector that is “flexible, affordable and fair” for all, describing their plans for the early years as “transformational”..

The party’s proposals – outlined in the newly-published policy document, A Better Start in Life for Every Child – include reviewing the existing rates paid to providers for so-called ‘free hours’ to ensure that they cover the costs of high-quality early education, tripling the Early Years Pupil Premium to £1,000 per year, and increasing the falling number of childminders in the sector by simplifying regulations.

The Liberal Democrats have also reasserted their long-term commitment to delivering free, full-time early years provision for all children from age two and those with working parents from nine months.

Alliance publishes manifesto for the next government

The Early Years Alliance has published its manifesto for the next government, ahead of the upcoming general election that is widely expected to take place at the end of 2024.

The manifesto includes key actions and recommendations, such as calls for an emergency financial rescue package for providers in most need of financial support, the development of a comprehensive recruitment and retention strategy, and adequate and timely funding and support for children with SEND. Further topics covered in the manifesto also include ratios, business rates and VAT.

These shape the Alliance’s vision for the sector that has the needs of all children at its heart, provides a consistent pathway of support for families during the first five years of a child's life and recognises and values those working in the early years as education professionals.

Next year’s general election comes at a crucial time for the early years sector, with the phased rollout of the expanded early entitlement offers set to begin in April 2024. By September 2025, the policy will offer all children aged nine months onwards from eligible working families’ access to 30 hours of government-funded early education and care.

However, this expansion comes at a time when early years settings are already facing a wide array of challenges, particularly a chronic lack of adequate government funding and severe staffing shortages, with almost 5,000 settings forced to close over the past year alone.

"There's never been a more pivotal time in early years"

- Neil Leitch, CEO of the Early Years Alliance

Commenting, Neil Leitch, CEO of the Early Years Alliance, said: “There’s never been a more pivotal time for the early years. We’re clear that whichever political party is in government after the next election, urgent support – and crucially – investment in the early years must form a key part of their priorities, underpinned by a comprehensive long-term plan for the sector.”

“As such, we hope that every political party takes notes of our recommendations and ensures that the early years – and the urgent need to provide greater support to children, families and the workforce – is front and centre in their own respective manifestos."

Government fails to act on Education Committee's early years recommendations

The government has rejected a number of recommendations made by the Education Committee as part of its long-running inquiry into the early years.

In July 2023, the Committee published a report – Support for childcare and the early years – highlighting the urgent challenges facing the sector.

The report contained a number of key recommendations for the government, including additional funding and SEND support; the reinstatement of previous staff:child ratios for two-year-olds; and a call to exempt early years settings from business rates and VAT.

However, in its response to the report, published on Tuesday 17 October, the government confirmed that it was not planning to take any action on many of these recommendations.

On the issue of funding, the government argued that it recognises the importance of setting funding rates that “reflect the cost of early years childcare delivery” but suggested that this had already been addressed through recent increases to early entitlement funding rates.

The government also stated that it has “no plans to make changes to the business rates support provided to early businesses” or to alter nurseries’ current VAT exemption.

Additionally, it rejected calls from the Committee to allow childminders to claim early entitlement funding for children who are related to them, arguing that this “would not be an effective use of public money and may have a negative impact on the viability of existing childcare businesses”.

Responding to the Committee’s recommendation that recent changes to staff:child ratio be “closely monitored and reversed if quality and education outcomes are seen to suffer”, the government only stated that it will continue to monitor the changes and “keep the policy under review”.

Commenting, Neil Leitch, CEO of the Early Years Alliance, said: “It’s extremely disheartening that the government has completely wasted an opportunity to put in place meaningful change to address the raft of challenges facing the sector and families alike.

“The government says it recognises the importance of early education. Today’s response shows that it has once again failed to match this rhetoric with any meaningful action.”

Under-fives’ mental health needs more support at an earlier stage, says report

Early intervention and support are critical in identifying developing mental health conditions in the first five years of a child’s life, a report by the Royal College of Psychiatrists has concluded.

The report, Infant and early childhood mental health: the case for action, suggests that half of mental health

conditions arise by the age of 14, making increased pregnancy support and early action - such as work to promote child-parent attachment - "vital".

According to NHS data from 2019, 5.5% of two to four-year-olds experienced a mental health condition in 2017, including anxiety, behavioural disorders or difficulties, and neurodevelopmental conditions including ADHD and autism – issues that the report argues were compounded by the Covid-19 pandemic.

According to the authors, the early years present an “important opportunity for the treatment and prevention of mental health conditions and the promotion of mental wellbeing and resilience”. However, while there are evidence-based interventions for under-fives, “only a minority […] with mental health conditions receive treatment”.

The Royal College of Psychiatrists has made nine recommendations aimed addressing the gaps in support identified by the report. These include building and promoting national understanding of child mental health and wellbeing; routine, government-funded data collection on babies’ and young children’s mental health and wellbeing; and the introduction of a national competencies' framework and workforce training strategy.

DfE publishes response to consultation on EYFS changes

The Department for Education has published its official response to the recent consultation on changes to the Early Years Foundation Stage (EYFS) Framework.

The revised EYFS, which is expected to be published in draft format shortly, will come into effect in January 2024. The DfE has confirmed that it will be proceeding with plans to create two versions of the EYFS framework: one with childminder-relevant content, and one with group and school-based, provider-relevant content.

The proposed changes that will be going ahead include:

Removing the requirement for level 3 educators to hold a level 2 (GCSE or equivalent) maths qualification, and instead applying this requirement to managers, who would "be responsible for ensuring their staff have the right level of maths knowledge to deliver high-quality early years provision".
Changing the requirement around how providers support children with English as an Additional Language to develop their home language from “must” to “may.
Allowing suitable students on long term placements and apprentices to be included in the ratios at the level below their level of study, if the provider is satisfied that they are competent and responsible.
Removing the requirement for childminders to undertake pre-registration training in the EYFS (though understanding of the EYFS would continue to be assessed to the same level by Ofsted or a childminder agency prior to registration).
Allowing childminders' assistant(s) to act as the key person.

The following changes will be going ahead at a later date, after further consultation with the sector:

Introducing an ‘experience-based route’ for educators to gain approved status to work within staff:child ratios, so that "otherwise suitable educators who don’t hold an approved level 3 qualification have a path to gaining ‘approved status’ without having to do a new qualification". This would allow educators to count within the level 3 ratio but would not give them a formal qualification.
Clarifying the wording in the EYFS to reflect the Department’s policy that only those with Qualified Teacher Status, Early Years Teacher Status and Early Years Professional Status can operate in level 6 staff:child ratios.

However, the government has confirmed that it will not be proceeding with the following proposals:

Reducing the percentage of level 2 qualified staff required per ratio for children of all ages from ‘at least half’ to either 30% or 40% where application
Changing the qualification requirements for ratios so that they would not apply outside of peak working hours (for example, 9am-5pm). This would mean that staff would not need to hold an approved qualification outside of peak hours, though staff:child ratios, DBS, paediatric first aid and safety requirements would remain in place at these times.

The consultation response document is available here.

Commenting, Alliance CEO Neil Leitch said: "While we welcome the fact that some of the most damaging proposals in the consultation have been scrapped, the fact remains that the remaining changes – alongside the recent relaxation of ratios – represent an incredibly concerning direction of travel for early years policy.

"We of course recognise that there is an urgent need to tackle the early years recruitment and retention crisis – but lowering standards as part of a desperate attempt to build capacity in the sector ahead of the roll-out of the extended 30 hours offer, under the guise of 'increasing flexibility', is simply not acceptable.

"We're clear that the needs of the child and their right to a high-quality early education must always be the priority."