The governmentâ€™s main childcare policies are fragmented, uneven and failing to deliver for families in poverty, according to a new report.
The study by the Family and Childcare Trust (Fact) says that from next year Â£7.2bn of public funding â€“ which constitutes 0.48% of GDP â€“ will be allocated to childcare spending, yet evidence shows that low-income families are still losing out.
It calls on the government to come up with a 10-year strategy to transform childcare services, with the focus on delivering high quality childcare to the most deprived families.
The comprehensive report, entitled Creating an Anti-Poverty Childcare System and funded by the Joseph Rowntree Foundation, says children at risk of poverty rarely have consistent access to high quality early years care, despite evidence that this improves outcomes.
It also says the system of support with childcare costs is bureaucratic and difficult for parents to navigate, and fails to adequately support them in training or education, both of which would provide a route out of poverty.
One of the governmentâ€™s key election pledges was to extend free childcare to 30 hours a week for three- and four-year-olds. But according to the report, under the current system half of the most disadvantaged two-year-olds do not receive their free entitlement to childcare in a setting led by an early years graduate, a key quality indicator.
And it calls for a better qualified early years workforce to be paid in line with school staff, who currently earn 68% more.
The reportâ€™s authors also say a simplified funding system would help focus efforts on improving poorer childrenâ€™s outcomes and propose that more of the state subsidy should be paid direct to service providers as a means of delivering access to high quality childcare, regardless of parentsâ€™ ability to pay.
Julia Margo, the Fact chief executive, said while government initiatives such as extended free hours and tax-free childcare were welcome, the government risked making â€œan already complex system more complexâ€ and would leave gaps in vital support for low income families.
â€œOur ambitious proposal for a simplified funding system could tackle many of the barriers low income families experience when they try to access childcare and help them move into work.
â€œEvidence shows that sufficient funding for a high quality childcare system brings fiscal benefits in the longer term â€“ through childrenâ€™s attainment, increased maternal employment, higher tax intake and lower welfare payments.â€
Helen Barnard, head of analysis at the Joseph Rowntree Foundation, said: â€œInvesting in early intervention and family support services, linked to childcare providers, helps families give children a good start in life.
â€œChanging the way that childcare is subsidised will help to remove many of the barriers that low-income families face when trying to access childcare. We also need to look at ways to boost the quality of care to make sure that the system works for those on the lowest incomes.â€
Neil Leitch, chief executive of the Pre-school Learning Alliance, added: â€œAs the report rightly highlights, high quality childcare and education has been shown to be particularly beneficial for children from more disadvantaged backgrounds and has the power to improve outcomes for the most vulnerable in society.
â€œHowever, as we have always said, quality costs and the only way we will be able to achieve the laudable aims of this report is if the government is willing to invest what is needed into the early years sector.â€
Leitch said research had shown that the early years sector was already significantly underfunded. â€œItâ€™s vital, therefore, that the government adequately funds its promise to extend the free early education offer to 30-hours per week for three- and four-year olds.
â€œIf it does not, this is a very real risk of a decline in the availability of high quality care for those who need it most.â€
Davina Ludlow, director of the online guide daynurseries.co.uk, said: â€œAs the report highlights, early years providers play such an important role in the education and development of young children, but many do not receive the support they need. This means that many families miss out on these critical services.
â€œIt is vital that the government continues to invest in the sector – local authorities need to be given the appropriate levels of funding first â€“ this will not only allow them to assess the levels of childcare provision, but will ensure the system remains sustainable, easing the burden on hard-working families.â€
The Fact report concludes with this message to government: â€œDespite the progress that has been made in the last two decades, the UK childcare system continues to represent an unfulfilled opportunity.
â€œThe UK is in a strong position: the basis of a world-class childcare system is already in place. Policymakers should grasp the opportunity to translate the potential of this system into reality.â€