1 Understanding the value for money
of the entitlement |
1. The Department for Education (the Department)
wants all three and four year olds to receive high quality early
years education. The primary purpose of this education is to support
children's development. All three and four year olds are entitled
to 15 hours of free education for 38 weeks per year (the entitlement).
The Department funds local authorities, who have a statutory duty
to provide sufficient free entitlement places.
2. The policy of providing free early years provision
was first introduced over a decade ago and has been extended and
expanded by successive governments. When the free entitlement
was first introduced in 1998 it provided all four year olds with
five 2½ hour sessions per week for 33 weeks of the year.
In 2004 it was expanded to include all three year olds, and in
2006 it was extended to 38 weeks of the year. In September 2010
the entitlement was further extended with an increase in the entitlement
to 15 hours per week.
3. For 2011-12 local authorities spent an estimated
£1.9 billion, drawing funding from the Department's Dedicated
Schools Grant, to provide three and four year old children with
their entitlement. This spend provides over 800,000 three and
four year olds with access to free education; an average estimated
annual allocation of approximately £2,300 per child. The
Department's funding and work over the past decade, alongside
that of local authorities and providers, has significantly increased
the provision of early years education.
4. While the Department devolves implementation
to local authorities, it is ultimately responsible for the overall
value for money from the system.
The Department told us that it assessed value for money through
a "combination of take-up, quality and outcome".
We asked the Department if they had analysed the relationship
between take-up levels of the entitlement and outcomes in different
local authority areas, to see if there was any correlation. The
Department explained that it hadn't yet done this analysis, but
that it was working with the Office for National Statistics so
that it could publish accurate data on take-up levels in different
areas of the country.
5. The National Audit Office (NAO) reported that,
before 2010-11, the Department did not have the data to estimate
spending on early years education and that current data is incomplete
and contains errors.
6. If less than the equivalent of 90% of three
year olds use the entitlement in a local authority, the Department
tops up the funding to encourage take-up and participation to
90%. In 2011-12, 89 local authorities received £69 million
of extra funding. The Department intends this funding to be used
to help increase take-up and has advised local authorities to
focus their resources on disadvantaged three year olds. However,
the Department told us that it had not monitored this spending.
Between 2008-09 and 2010-11 the Department allocated £642
million of capital funding to increase capacity, primarily in
the nonmaintained sector. The Department did not require
authorities to report on how this funding has been used and has
not assessed whether the turnover of providers meant that some
of their capital investment was wasted. The Chief Executive of
the Pre-school Learning Alliance, which represents non-maintained
providers, told us that he himself hadn't witnessed any waste
of investment due to churn of providers, however he said that
there was a question mark over whether this had been a sound investment.
7. The NAO report shows that there are wide variations
in both the funding and quality of provision in different local
authorities. The relationship between funding and quality is not
properly analyzed and understood. The Department explained that
it could not account for the differences but said that it would
now be working to analyse them.
The NAO work also showed that local authorities' spend on the
entitlement, as a proportion of the Dedicated Schools Grant, varied
significantly. The Department said that there would often be good
reasons for the variations but acknowledged that it did need to
understand whether the differences were justified.
8. Understanding and learning from the variations
between costs and outcomes provides an opportunity to improve
value for money. If local authorities can compare their performance
with each other they may be able to improve performance. The Department
told us that in the past it hadn't made sufficient information
available to allow local authorities to benchmark their performance
with each other, but that it will be doing this now.
Our expert witness from Solihull Council considered that sharing
of good practice should be at the Local Government Association
and local authority level, and felt that the best way to encourage
improvement was through peer-to-peer learning, with providers
from different sectors working with each other.
9. Expert witnesses agreed that the higher the
skills and qualifications of the workforce the better the results,
although this came at an extra cost.
We asked the Department about the tension between cost and performancefor
example, qualified staff cost 28% more to employ, and qualified
teachers can cost a further 50%. The Department agreed that teachers
had an important role to play and noted that they could supervise
more children than staff with lower level qualifications. It also
believed that staff with the Early Years Professional qualification
had been making a significant difference to children.
2 C&AG's Report, para 1&5 Back
C&AG's Report, Figure 2 Back
Q 42; C&AG's Report, para 1,2&11 Back
C&AG's Report, para 6 Back
Q 42 Back
Q 98 Back
Q 60; C&AG's Report, para 18 Back
Qq 65, 66 Back
Q 38; C&AG's report, para 4.11 Back
Q 55; C&AG's report, Figure 8&13 Back
Qq 81, 82 Back
Qq 61, 88, 108, 111 Back
Qq 25-30 Back
Qq 2, 23, 24, 39 Back
Qq 42-49 Back