Inflation and rising costs leave early years ‘out in the cold’, new IFS research shows
The IFS’ Annual report on has found that higher-than-expected inflation in addition to substantial cost rises in recent years will mean that early years providers resources will be squeezed going forward.
Funding will be 9% less
The report detailed that, despite a previous government commitment of £170m in funding for the early years sector, rising costs will mean that total spending on the “free” childcare offers will be 9% less in 2024 compared with 2021.
According to the IFS, spending on the “free” entitlement offer totaled around £4bn last year, which was more than double its 2009 level. The research institute explained that while spending per hour increased by 28% in real terms between 2009 and 2021, the majority of the increase in spending was driven by the additional of new entitlements including for disadvantaged two-year-olds and for three-and four-year-olds in working families.
In last month’s Autumn Statement, England’s early years sector received no additional funding while increases to the National Living Wage was announced. In the statement, the Chancellor announced a £2.3bn funding package for schools.
The IFS also concluded that colleges and sixth forms are also facing challenges. They saw the largest cuts in spending per pupil up to 2019 which are only expected to be partially reverse. Also, in addition to facing rising costs the number of 16 to 18-year-olds is expected to rise by 18% between 2021 and 2023,
“Enough is enough”
Neil Leitch, CEO of the Early Years Alliance, commented: "The government has argued that without a plan for education, there is no plan for economic growth – but unless ministers finally wake up to the fact that education starts well before, and goes on long after, the school gates, any future policy is doomed to fail.
"As the IFS rightly highlights, sky-high inflation rates and huge increases in the national living and minimum wages are putting unsustainable pressure on an already-fragile early years sector. Add to this the impact of rising energy costs and the ongoing severe staffing crisis, and it's difficult to see how the government can possibly justify its complete lack of action over our vital sector.
"We want all children to have access to a high-quality early education, and we want every parent who needs it to have access to affordable, accessible childcare – but unless the government starts investing what's needed, we will continue to see prices rise and places lost.
"Enough is enough. The government simply must commit to adequate long-term early years investment, and it must do so now. Simply ignoring this problem is not going to make it go away."