EARLY YEARS POLICY IN THE UK: Political parties should be clear about the objectives of childcare policy

Economists are discussing the costs and benefits of free part-time nursery places at the Royal Economic Society''s 2015 annual conference at the University of Manchester on Monday 30 March. £800 million a year of government spending on additional free part-time nursery care for 3 year olds had the objective of providing a ''double-dividend'' of improving children''s school readiness and mothers'' employment prospects.

Research to be reported at the conference finds that while the policy seemed to encourage more mothers to work part-time, children''s school outcomes are only slightly improved at age 5, and there are no long-term effects on academic progress.

The biggest effect of the government offering free part-time nursery places seems to have been to reduce the cost of childcare for parents. In the run-up to the election, several parties are expected to pledge to expand this policy; they should be clear about what the evidence suggests might be the effects of such an expansion.


In 1998, the then Labour government announced that all 3 and 4 year olds in England would be entitled to a free part-time nursery place. The availability of free places expanded relatively slowly for 3 year olds, becoming effectively universal across England by 2005.

Researchers from the Institute for Fiscal Studies and the University of Essex have explored how this gradual roll-out of the free entitlement affected the work patterns of mothers with 3 year old children and researchers from the University of Essex and University of Surrey, and funded by the Nuffield Foundation, considered the impact on children''s subsequent academic outcomes. They find that:

• Between 1999 and 2007, the percentage of 3 year olds in England benefitting from a free early education place rose by about 50 percentage points – from 37% to 88%. But the number of children benefitting from any kind of formal early education increased by much less: for every six children given a free place, only one additional child began to use early education; for the other five children, the policy effectively gave parents a discount on the early education they would have paid to use anyway.

• The fact that 50% of three year olds in England gained access to a free place increased the fraction of mothers of three year olds in paid work by around two percentage points. The effects among mothers who did not have a younger child were slightly larger, at around three percentage points (from a base of 53%), meaning an additional 12,000 mothers in work. Most of these mothers moved into part-time work (of less than 30 hours per week). Among those who started using childcare as a result of the policy, the effects were bigger, with around one in four mothers moving into work.

• Overall the increase in free places improved the outcomes of English children at age 5 by two percentage points on average, from a score of 87.5 on the Foundation Stage Profile (FSP) to a score of 89.5. Children who took up a free place, who would otherwise have had no pre-school experience, achieved an additional 15 points in the FSP (this assumes that all the benefits of the policy are felt by children who only took up a place because it was free).

• Although there is modest evidence that the policy had a greater impact on poorer children and those learning English as a second language, there is no evidence that the policy helped disadvantaged children to catch up in the longer term. Indeed, there is no evidence of any educational benefits of the policy at ages 7 and 11.

Dr Jo Blanden of the University of Surrey, says:

''On the face of it, our results cast some doubt over the value for money of universal early education. More than 80% of the children taking up free places would probably have gone to nursery anyway, and children''s test scores do not seem to be any higher in the longer term as a result of the policy. In fact the main benefit of the policy seems to have been to make childcare cheaper for families with 3 year olds.

It is tempting to say that the money would have been better spent on the poorest children. However, the policy''s universalism may have benefits if it encourages greater take-up of provision among children from more disadvantaged backgrounds or if it mixes children from different backgrounds in the same early education settings ''

Dr Birgitta Rabe of the University of Essex says:

''Given that the way in which parents could access free part-time nursery care was relatively inflexible when the policy was first introduced, it is perhaps surprising that it appeared to have a significant effect on mothers'' work status. But it has by no means transformed the labour market attachment of mothers of young children. The case for extending the free entitlement is not as clear cut as political rhetoric might suggest; politicians need to be clearer about the objectives of childcare policy.''

Dr Kitty Stewart of the London School of Economics says:

''All of the expansion in free places occurred in the private sector, rather than in public nursery schools or nursery classes in primary schools. Children in the private sector are much less likely to be taught by qualified teachers who are best equipped to provide a high quality learning environment. This could help to explain the lack of long term benefits.''

The research on the impact of the free entitlement on mothers'' employment was carried out by Professor Mike Brewer (University of Essex and Institute for Fiscal Studies), Dr Sarah Cattan (Institute for Fiscal Studies), Dr Claire Crawford (University of Warwick and Institute for Fiscal Studies) and Dr Birgitta Rabe (University of Essex).
Papers can be found through the following links:
Evaluating a demand-side approach to expanding free preschool education
The impact of free, universal pre-school education on maternal labour supply

The research on the impact of the free entitlement on children''s education outcomes was carried out by Dr Jo Blanden (University of Surrey), Professor Emilia Del Bono (University of Essex), Professor Sandra McNally (University of Surrey) and Dr Birgitta Rabe (University of Essex) and was funded by the Nuffield Foundation. The Nuffield Foundation is an endowed charitable trust that aims to improve social well-being in the widest sense. It funds research and innovation in education and social policy and also works to build capacity in education, science and social science research. The Nuffield Foundation has funded this project, but the views expressed are those of the authors and not necessarily those of the Foundation.

The free entitlement to early education was initially for 2.5 hours a day (12.5 hours a week) for 33 weeks a year, and it has been expanded so that it now covers 15 hours a week (which can be taken flexibly over fewer days) for 38 weeks a year. The policy has been estimated to cost around £2bn a year for England (National Audit Office, 2012), with spending increased by around £800m in 2014 prices compared to the situation in 1999. In 2014, a total of 239,700 part-time equivalent places were funded in the maintained sector, and 377,800 in the Private, Voluntary and Independent (PVI) sector; in 2012, the National Audit Office estimated the average cost per hour to be £3.97 in the maintained sector and £3.77 in the PVI sector.

The research effectively compared changes in maternal employment and educational attainment in areas that saw large increases in free early education places during the 2000s with areas that saw much smaller increases. The research on maternal outcomes used data from the Labour Force Survey (LFS) from 2000 to 2008. Even with several years'' worth of LFS data, some of the final sample sizes are quite small and so some of the estimated impacts are relatively imprecise. To measure educational outcomes researchers made use of administrative data for all children in state schools; this means there is much more confidence about the size of the estimates.