Transcript Monitoring of ethnicity in childcare by local authorities

Quality costs
paying for Early Childhood
Education and Care
Alison Garnham
Chief Executive, Daycare Trust
Aims of project
• to identify the elements required for high quality
provision of ECEC
• to establish and cost a high quality model
• to identify the current costs and levels of funding for
ECEC in England
• to explore funding options for the high quality model
to ensure that the costs do not become prohibitive
for parents.
• Doesn’t include childminders
Methodology
•
•
•
•
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Literature review
Interviews with stakeholders
Two roundtables
Development of a ‘high quality’ model for ECEC
Social Market Foundation costed ‘high quality’
model, compared with current costs
• Researched who pays what currently
• Institute for Fiscal Studies costed a number of
options for funding the ‘high quality’ provision
Five working papers
1. What is high quality early childhood education and care
(ECEC)? Maxine Hill and Emma Knights, Daycare Trust
2. What is the cost of quality?
Sandra Gruescu, Social Market Foundation
3. What do parents pay?
Kate Goddard and Jonathan Rallings, Daycare Trust
4. International comparisons of high quality ECEC.
Sandra Gruescu, Social Market Foundation
5. Funding options for high quality ECEC.
Mike Brewer, Institute for Fiscal Studies
What is ‘quality’ ECEC?
• there is no agreed understanding or definition of
‘quality’ in ECEC provision
• it varies with
– the subject’s perceived objectives for the
provision,
– the influence of cultural values, and
– where considering future outcomes for children,
which outcomes are being prioritised.
The dimensions of quality
• ‘Process’ dimensions are the characteristics of the
child’s experience
– interactions with others, learning experiences,
variety in stimulation, responsiveness in
environment
• ‘structural’ dimensions focus on aspects of the
environment that are fixed
– staff and manager qualifications, staff pay,
stability/retention of staff, adult-child ratio, group
size, management structure, premises
High quality model
• Current adult:staff ratios
• For children aged 2 years and over: half of staff as
graduates (Level 6 qualified) and the rest Level 3
qualified;
• For children aged under 2: one-third of staff as
graduates, the rest Level 3 qualified;
• Pay scales based on equivalent roles in schools;
• Other non-staff costs (premises costs, expenditure
on insurance, food, materials, etc) set at one-third of
the staff costs.
Table 1: Cost for one hour of ECEC provision
calculated by Social Market Foundation
Ratios
Cost with
High quality
current staffing
Cost
Under twos
1:3
£4.09–£5.05
£10.37–£12.48
Two year olds
1:4
£3.27–£4.11
£8.26–£10.40
Three–four year 1:8
olds
£1.85–£4.44
£4.42–£6.17
£2.23–£3.07
£2.69–£4.54
1:13
In London the
costs are 20%
higher
Summary of costs increases
• biggest increases for youngest children
• under the Daycare Trust high quality model, the costs
of ECEC in full daycare and sessional settings up to
three times current costs.
• the increases are just over double for full-day care in
Children’s Centres around 135 per cent or 100 per
cent when the cap on other costs is applied.
• only around 15% increase for nursery schools, and
up to 27% increase in nursery classes
What do parents pay now?
Daycare Trust Survey
DCSF Providers Survey
Day nursery, London
Laing and Buisson
Day nursery
All ages, all types
Family Resources Survey
DCSF Parents Survey
£0.00 £1.00 £2.00 £3.00 £4.00 £5.00
Price per hour
Data from 2007-2009.
What does Government pay now?
• Free entitlement
– Dedicated Schools Grant does not ring-fence ECEC
– LEAs spend in Section 52 returns
• SSEYC grant
– How much are Children’s Centres about ECEC?
• Childcare for FE students
• Childcare Affordability and Child Poverty pilots
• Childcare element of WTC
• Tax breaks on employer-supported childcare
• Much harder to add up
– Mixture of UK and devolved policies
– Some for under 5s, some for all children
Government spend on
ECEC in England
£m/yr
Free
entitlement
for 3-4s
2007/8
1,214
2008/9
1,790
2009/10
Standards
Fund for
expansion
to 15
hrs/wk
170
Other
DCSF
Funding
651
Other
funding (FE
students and
pilots)
Tax
credits
(all
children)
Tax breaks
on
employer
vouchers
(all children)
1,129
307
95
Total: £4.1bn, with £1.2bn more for Sure Start local programmes and Children’s Centres.
Around 0.4% GDP.
Based on various sources.
Who is using ECEC for
under 5s?
(NB “using” does not mean “paying for”)
100
90
80
70
60
50
40
30
20
10
0
%
% who pay for childcare
% where all work 16+
% getting CCTC
(estimate)
Poorest
2
3
4
Richest
All
Income quintile groups
Base: families with a child under 5 in England using ECEC.
Source: IFS analysis of FRS 2006/7.
Who is paying what for ECEC?
Total spend is £3.0bn/yr by parents, offset by £0.4bn/yr CCTC
Base: families with a child under 5 in England using ECEC.
Source: IFS analysis of FRS 2006/7.
© IFS, 2009
200
180
160
140
120
100
80
60
40
20
0
20
18
16
14
12
10
8
6
4
2
0
Poorest
2
3
4
Spending by
parents
% income
£/wk
What would parents pay for
High Quality ECEC?
CCTC receipt
(estimate)
% income spent on
childcare (righthand axis)
Richest
Income quintile groups
Total extra spend is £2.6bn/yr by parents, offset by extra £0.4bn/yr
on CCTC. Total of £5.6 bn/yr by parents, offset by £0.8bn/yr CCTC.
Base: families with a child under 5 in England using ECEC.
Source: IFS analysis of FRS 2006/7.
© IFS 2009
Meeting cost of High
Quality childcare
• Paying for existing ECEC at High Quality rates would cost
£2.6bn/yr, with parents paying £2.3bn/yr net
• Daycare Trust report highlights following options to reduce
cost to parents
-Subsidy to providers for all ECEC linked to staff
qualifications
-Childcare element of WTC: subsidy rate to 100%,
remove work test
-Free entitlement: 2 year-olds: 15 hrs/wk, 38 wks/yr; 3-4
year-olds: 20 hrs/wk, 48 wks/yr
• Impossible to say how ECEC use would respond, so
assume unchanged
Options for sharing cost of High Quality
ECEC, existing free entitlement
HQ ECEC
plus what?
Parents
Nothing
2.3
Gov’t
Free
entitlement
CCTC
Subsidy
0.4
0.4
Reformed
CCTC
1.4
Subsidy to
providers
1.1
Reformed
CCTC &
subsidy to
providers
0.3
1.3
1.3
1.6
0.2
1.4
1.0
1.4
2.4
Options for sharing cost of High Quality
ECEC, expanded free entitlement
HQ ECEC
plus what?
Parents
Nothing
0.7
Reformed
CCTC
0.1
Subsidy to
providers
-0.2
Reformed
CCTC &
subsidy to
providers
-0.7
Gov’t
Free
entitlement
CCTC
4.2
0.1
4.2
0.7
Subsidy
4.3
4.9
5.2
4.2
1.0
5.7
4.2
0.5
1.0
Summary of costs to parents
and government
(£bn/yr)
Parents
Total Gov’t
EEE
CCTC
Quailty
subsidy
(under 3’s)
Total
(parents &
Govt)
Current level of
spend, existing
CCTC
2.6
1.6-1.8
1.2-1.4
0.4
-
4.2-4.4
0.5
1.0
4.9
0.9
1.0
9.2-9.4
Additional costs of high quality
Increased EEE,
subisdy,
reformed
CCTC
-0.7
5.7
4.2
Total costs
Future level of
spend
1.9
Copyright Institute for Fiscal Studies 2009
7.3-7.5
5.4-5.6
Conclusions
• If Government were to foot the entire bill for centrebased ECEC it would cost them just over £9 billion a
year in England
• Our compromise package would require £7.5 billion
a year from Government to deliver ‘high quality’
provision
• This would make total Government spend on ECEC
approximately 1% of GDP
• Wise investment in children’s futures & to make
savings in public expenditure in future years
Post-election agenda
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Coalition document
Budget
Spending review
Review of EYFS
CWDC
Re-focusing Children’s Centres
Daycare Trust Agenda
• Keep Children’s Centres universal
• Remaining gaps – atypical, out of school ,
older children, holidays, disabled, under 2s
• Extended schools?
• Parental leave – close the gap
• Free entitlement – extend free hours
• Affordability - reform CCTC
• Quality - 1% GDP