I welcome members and witnesses to this public evidence session of the Education Select Committee. This is the second oral evidence session in our inquiry on the early years, improving support for children and families. This morning we are due to hear from a number of witnesses who represent different parts of the early years sector. Before I do that, I want to acknowledge that we are holding this evidence session in light of the news of the horrific case of the abuse perpetrated by Vincent Chan in a nursery in north London, which came to public attention last week. This inquiry was established prior to any public knowledge of that case, and our terms of reference are slightly different to it. The case itself is still subject to sub judice resolution because sentencing of Vincent Chan has yet to take place and will take place in January. We cannot discuss the case today and we will not be questioning our witnesses on the issues that arise from the case related to safeguarding in early years settings, but I want to say for the record that the Committee will be adapting our inquiry to take account of the very serious issues that are raised by that case and other recent cases of children coming to harm in early years settings. We will have further information in the public domain about exactly how we will do that quite soon. For anybody who is watching our proceedings who is, as we all are, deeply shocked and concerned by that case, we will be doing what we can to scrutinise the landscape of early years in light of concerns that arise from that case and we will have further information on that shortly. I will ask our witnesses to introduce yourselves to us before we begin our questioning.

Thank you, Chair. I am Purnima Tanuku, Executive Chair of the National Day Nurseries Association. We represent about 20,000 day nurseries and about 35,000 individual practitioners and we work across the UK and internationally.

I am Neil Leitch. I am the Chief Executive of the Early Years Alliance. We are a membership organisation. The thing that is different about us as a membership organisation is that we also operate 27 settings exclusively in areas of deprivation; I like to think that when we talk about some of the challenges of early years, we do it with first-hand experience.

I am Beatrice Merrick. I am Chief Executive of Early Education, the British Association for Early Childhood Education, if you want the long title. We are a membership organisation and charity. Our membership includes anybody working in early years across the UK. That could be in a private and voluntary independent setting, a maintained setting, a local authority, a university or college, also childminders. We have a very broad-based membership.

Good morning. Thank you for having me. My name is Ka Lai Brightley-Hodges. I am Head of Coram PACEY. We are a professional association representing home-based childcare professionals in England and Wales. That includes childminders, nannies, childminding assistants and wraparound care providers.

Thank you very much for being with us this morning. I will begin our questioning. The DFE has previously said that an increase of 35,000 early years staff would be needed by September 2025. The National Foundation for Educational Research has previously said that that recruitment target was on track to be achieved. However, despite that relatively positive view coming from the NFER on the DFE’s target, providers continue to tell this Committee that there are ongoing staff shortages, recruitment is difficult and this is cause for concern. How do you account for that discrepancy in viewpoint?

Staff recruitment and retention has been a major issue for the last four or five years since the expansion started. The worrying thing also is the level 3 qualified staff. Any deputies, managers or team leaders will have to have a level 3 qualification, and they are decreasing in numbers. When we surveyed nurseries, they are currently carrying the equivalent of 4.2 full-time equivalent of vacancies, and their staff turnover is about 16%. It is really difficult not only to recruit the right skilled, right attitude people but also to retain them. Working in childcare is hard work and stressful, especially since covid when nurseries were seeing a lot of children with difficulties in settling in, with SEND and all the other issues, and some needing one-to-one care for communication—all those things. Staff are leaving the sector to work in Aldi, Lidl and supermarkets to get better pay and, of course, less hassle. That is an issue. Even though the Department has provided an incentive of £1,000 for recruitment, DFE’s own report published recently highlighted that it has not been able to recruit many people through that incentive. That is a real issue, and people are not able to offer more places, even with the expansion. They could do but they can’t because of staffing issues.

How do you account for the NFER saying the Government’s recruitment target of 35,000 is on track and the experience of providers in the sector is that this is still really challenging? Is the target wrong or is it accounted for by a retention problem—recruitment is going okay but retention not so much? What explains the difference in perception?

I think the 35,000 target was set up when the expansion programme was announced, but what is important is that as part of that we talk about expansion and offering more places to families. But there was never a workforce strategy to look at: how do we achieve this target of 35,000; where will we get these people from; how will we offer them the qualifications and support that they need? That was not done. The last workforce strategy we had was in 2017 and we still don’t have a workforce strategy. Of course we have the Best Start in Life strategy, which is a positive move, but we need a clear workforce strategy to be able to recruit people. Expansion has already happened, but the problems continue with the staff levels and recruitment and particularly the qualifications and skills required.

I don’t understand the statement because it is completely contradicted by internal research. Over 1,000 providers said that they were struggling. Four out of five providers that responded said they were struggling to recruit so, frankly, I cannot understand where that statistic comes from. This is anecdotal evidence, but when you talk to providers, whether some of the largest providers in the country or single-site providers, community-based pre-schools, whatever, the number one concern is recruitment and retention. I will give you our own practical position. There is not a single nursery that we operate that is fully staffed. I can tell you of instances where we have been trying to recruit a manager for 18 months. It feels like maybe a direction of travel that at some time we were along. As it currently stands, it does not marry up with the reality of what is happening in settings.

I am not sure why the data that the DFE and NFER are using seems to reflect that, but one aspect might be that the sector is very good if Government say, “Jump, we need more places, we have to create more places”—it will do its utmost to do that. At local level, settings with very little support from the national framework are doing everything they can to get the staff they need through the door but they are telling us that there are fewer applicants per place, the quality of the applicants is lower than it used to be, so they are having to make difficult decisions about do we fill the vacancy with somebody we may not have employed a few years ago. I agree with what Neil and Purnima said. We know that there are settings all round the country that are not fully staffed, which is putting even more strain on existing staff. It means that when the two-year-old 1:5 ratio was introduced and Government said you don’t have to use it, settings that don’t want to use it are probably having to use it—either they are turning parents and children away or they have to use those ratios. We are seeing a sector doing its utmost to create the places and to staff the settings as best they can in an environment where literally we have had heads of settings talking about working directly with the local colleges trying to get the newly-qualified level 3s. The level 3s who have just done the qualification with the aim of going to work in the sector then say, “No, thanks, now I have seen what it is like, I am not even going to do that for a first job. I am just going to go and work in the supermarket.” They are working against the grain of a very difficult recruitment situation and retention. The fewer experienced staff you have, the less long people will last. They are not supported and the stress on leaders who themselves have been in the post for very little time and do not have the confidence and the experience has a knock-on for retention of leaders and new staff coming in, who are not getting the support that they need. Ka Lai Brightley-Hodges: Unfortunately, childminders do not make up that 35,000 of new workers’ figure. While they do offer entitlement places and 150,000 early years places, the number of childminders has declined. It declined 4% this year on the previous year and that means that we are losing more childminders than we are recruiting. We can’t add childminders to the mix of that 35,000. I also question the IFS data showing that there is 26% larger than expected take-up and where that falls with those numbers—if those numbers include that. If they are on top of that, that is an extra number they have to reach. I am not sure about that.

That was going to be my next question. The 35,000 target was established, as has been said, when the expansion was announced and we know that the take-up has been 26% higher than anticipated. It is a quick follow-up question about the extent to which that increased take-up is also adding to the pressures and to what extent your membership organisations—your members—are experiencing that additional pressure on top. You are all nodding.

On the point that Beatrice reflected on, about the adult-to-child ratios, the way in which we are accommodating that is it feels like we have a bit of a race to the bottom with who can undertake this work. There is a real contradiction because we thought about delivering the entitlements might be in the best interests of children, so all of a sudden when the proposal to change the adult-to-child ratios from four to five was put forward there was overwhelming opposition from everybody—parents, the sector and so on—and yet still it went ahead. Again to pick up Beatrice’s point, we were told, “You don’t have to do this”, which is a complete contradiction with a freedom of information request that we sought from the previous Government, where they expressly were forced to release, after two and a half years, a statement that said, “We will make providers work to maximum ratios”. Now you are in a difficult position whereby if you are a provider and perhaps you are operating a single site, and perhaps your home has a second mortgage on it securing your business loan, you have a decision to make: shall I take another child on, basically, or shall I do the right thing for quality? We are starting to see more and more providers take on more and more children. If you ask them if there was enough funding, if there was a system that allowed you to care, educate and develop young children, which one would you choose, there is not a choice. Alongside that, we now have the experience-based group; we are not critical of people who have experience and have been in the sector for a long time, but why now? The motive is to manage numbers. I chaired the Finance Industry Standards Association, but I could not work in an early years setting because I do not have a level 2 qualification. I understand the experience-based route but that was not the motive. The motive was to manage numbers. Then we have a situation whereby if you an apprentice working towards a qualification you can act up and count into ratios. Then we changed the outdoor space to accommodate more numbers. None of that is about the best interests of the child. That is about crowd management and that is how we are coping with it at this particular time. I use the word “coping” purposely.

Also an issue with staff shortages is the managers are having to work on the ground level operationally. That means they are having to spend less time on training their staff, less time on managing the business rather than working on the floor with all the children because they have to manage the ratios. It is a really difficult situation because some settings have waiting lists until 2027-28, particularly for babies. Since the expansion was announced, parents were contacting nurseries, even before it started, “When I can have my nine-months-old, when can I have my one-year-old or two-year-old?” I think that created a lot of pressure but on top of that is the funding allocated by the Government for the expansion. When we did a freedom of information request to all local authorities, at that time £100 million capital was announced primarily for the expansion programme to support providers. Only 50% of the funding has been allocated out of that £100 million. Even the expansion funding, £75 million—with the FOI—still only a third of that money has reached providers. They need that kind of support to be able to train their staff, expand their provision to take on children. Staffing is an issue. In our survey, they said if they had enough staff, they could create on average 13 additional places, but at the end of the day quality and putting children at the centre is an absolutely primary reason. That is what we should be looking at as part of this expansion.

I don’t think they do. From the workforce surveys, a level 3 qualification might be required, for example, but we know that for the last five years that level 3 qualified staff have been reducing. The DFE’s data reflects something different. That is because they don’t count apprenticeships, which are now a major part of the workforce. That data needs to be looked at very carefully because recruitment in some areas is getting better, but it is very much about where they happen to be geographically. There needs to be better data. We have data about how many parents are able to access codes and how many parents are able to access the childcare provision, but the DFE spent millions on a campaign to recruit more people: what is the outcome of that campaign? How many people were able to come into the sector? What is the outcome of the £1,000 incentive? We need to look at that data very carefully and see. A lot of people moved away from childcare after covid, and we know the reasons; stress and mental health were the main reasons. There needs to be clear data that captures all these issues, especially now that the progression with expansion is happening.

We know the response from that marketing campaign. It is not ambiguous. We know it because the Department for Education published it and the recruitment was negligible. What was paramount was the statements coming back from the providers about the quality of applicants—concerns that people were applying who had no care, no love for the work and so on. There are local authorities who would not offer the £1,000 bonus because they felt that we should be looking after people who are already in the sector—so about retention rather than recruiting people on a financial incentive only. It just felt very odd. Its own research shows that it was fundamentally a waste of money.

We have just completed a Nuffield Foundation-funded study of the early years workforce across the four UK nations but also looking at international examples. One of the things that came out of that was a definite sense that there is a gap in the DFE data, quite apart from it not being adequate at national level—it does not have the regional and local breakdown that local authorities and combined authorities need. They are increasingly looking at what they can do in their area, but the data is not there to support that. That needs to match with the sufficiency data. There has been a lot of talk and work done by Ofsted and by the Mitchell Institute in Australia about childcare deserts. We know that there are various reasons why you might get a childcare desert but one of them might be lack of available staffing. If you don’t have the data on where those are and how that is matching workforce versus other issues, you are missing those bits of the jigsaw and you need to do something about it.

We don’t have enough data as part of the workforce strategy. We don’t have demographic data on the new people coming into the workforce, which you would normally use to inform how you expand. A very specific example is we are looking at attracting new childminders to the workforce when actually a childminding assistant is the next generation of childminders that we would target to become childminders. There is no data on childminding assistants because they are not registered. Ofsted holds some data, but it is out of date, so there is no evidence or data for us to work from, even for organisations like ours to then go out and look at recruitment.

When we talk about the number of places that are offered and parents’ allocations—this is not directly workforce—we don’t have the data on whether they got the hours that they wanted on the days that they wanted and at the location they wanted—for a parent, that is pretty critical. If you are travelling 10 miles or whatever it happens to be and you are offered only a Friday afternoon or a Monday morning, that is pretty critical. It sort of spells out that conflict within the Department about how much data does it want to reveal because it could contradict an objective to fulfil the previous Government’s entitlement programme.

On the workforce data, it is good that DFE or Ministers are now talking about setting up a register. That means that you can start to track things like qualifications, years of experience, and we know that experience is really important as well as qualifications, and also job roles. There are issues like we have graduates but are they actually working with children or are they sitting in the office all day—or the level 3s, who is working with the babies? All those sorts of things. If you have a good register that captures that, you have a much richer, fuller data source to ask all these questions.

Certainly in my own constituency, and I know across the country, we have seen a really mixed picture where some providers have been growing and expanding and opening new nursery settings and other businesses, where others have gone out of business. What is driving some of those different signals in the market? I see you chuckling away, Neil. What is your initial answer to that?

You can see my hand doing the money gesture. According to UNICEF, we have 19 childcare places available per 100 children under seven in the most deprived areas in England, whereas in the most affluent areas we have 31 places per 100 children. That is all to do with sustainability and economics. We are not for profit, and we don’t have to have a return on investment, pay private equity or anything. If it breaks even it is about as good as it gets. Six years ago we operated 132 settings in areas of deprivation, and we are closing, we are closing, we are closing, because financially you have an overhead that is not just financial, but you are working with the most vulnerable families, the most vulnerable children. That means more one-to-one support, for example. It is not funded and that is why we have providers wanting to operate, clearly, in areas of affluence as opposed to providers in areas of deprivation. In the last couple of years, we have gone from something like 8,500 voluntary-run groups, which are predominantly not for profit, clearly, because of their nature, to around 5,500. There is a reason for that and that is it is just not sustainable.

That addresses the point between communities, but even within communities we are seeing a huge fluctuation. Are there some explanations for that?

Neil explained the reasons why settings in deprived communities are closing. The main reason for that is the majority of those parents are only taking up the entitlement offer. The second reason, we found through our survey, is that those are the areas where the local authority hourly rate is the lowest. As you can imagine, the local authority hourly rates are different even though there is an average rate that the Government publish. It is really difficult to operate in an area and now that the Government are purchasing 80% of the childcare places, the parents’ ability to pay—plus a lot of parents not being able to pay for any additional hours, which they used to do before—is the combination for sustainability. That is an important area we need to look at but where parents are working full-time where they need full daycare, for example from Monday to Friday, providers are able to subsidise. That is what they have been doing. Three and four-year-old funding for years had not kept up with the cost of increases. From 2017, the national living wage, minimum wage and the cost of living has increased more than 70% and yet the hourly rate funding at the same period increased by only 37%. You can see the gap and if that gap keeps building and building, it is absolutely disastrous for provider sustainability. I think that that is an area where funding is crucial, as Neil pointed out before, three and four-year-old funding. But last year the national insurance contributions made an 18-staff nursery on average incur £42,000 of additional costs. Where will they find that money? That is where we have seen more closures since the NIC contributions have increased. Of course with the living wage, the minimum wage, providers want to pay their staff better, but they keep on increasing and the funding is not keeping up with those cost bases. That is what is causing the sustainability for providers, particularly in the private areas.

We have seen the largest workforce growth within the private, voluntary and independent sector. I want to tease out the implications for that, Ka Lai.

I will just add to Purnima’s point about the three and four-year-old funding rate and the variance. If 50 LAs have the lowest rate of £5.71 while one LA has the highest rate of £9.23, that is quite a difference in where you are living and what rate you are getting. On childminders and the variance in increases and decreases, nationally there is 4% decrease in childminders but there are 20 local authorities who are seeing childminder numbers increase. Those are the local authorities that we know pay an importance to childminders: they are invested in childminders because they understand how they contribute to the sector and to families in the area. They are the ones that are going above and beyond and taking it upon themselves to see childminder numbers increasing. It is very much at a local authority level where their change can make a difference as well. For example, Barnsley has seen a 15% increase in childminder numbers. I know that is because of the hard work that they are doing just to recruit new childminders and the different ways they are going about it.

We have touched upon these issues already, but what does the development of childcare deserts tell us about the financial pressures on providers in different areas and particularly in areas of deprivation?

Again, I think it is absolute evidence of what it does to providers who are trying to support disadvantaged communities. Purnima alluded to the national insurance increase, for example, that added £1.2 million to our wage bill. We were operating 38 settings before that national insurance increase came in. It was not funded into the rates and therefore we have just closed 11 nurseries specifically because of the national insurance contributions. These are government hours that we are providing, and it feels there is no moral compass, no equity in how any Department can allow us to deliver its hours and not adequately fund them. It is interesting. Purnima was talking about the three and four-year-old rate. When we did that freedom of information request the Government specifically said, their words not mine—and it is going back a little while but you will see the relevance of it—that to adequately fund the entitlements we would need to pay a rate, and they actually put a figure on it, of £7.49 in 2021 per hour for a three and four-year-old. We get an average around £5.63 in 2025. Dare I say that the then Opposition Government were highly critical of the inadequacy of funding but then just dumped the national insurance increases upon us? That just does not support the most disadvantaged operators where, for all the reasons I said earlier, we have something like, in our own settings, four and a half times the national average number of children on care plans, pupil premium and so on. Not a penny more is paid to support those families, but they surely must be the communities that we should be prioritising because that is where you get the biggest return on human capital investment and we are doing the complete opposite. I slightly deviate but I think it is important. The policy is almost exclusively focused on getting mums back into work, full stop. Rarely do we talk about the best interests of a child. What about those 18-month-old children where the parents cannot work, maybe even don’t want to work; how is that the fault of the child? Do we believe that the first five years of a child’s life are absolutely critical? All the evidence shows it, whether it is in GCSE results or a good level of development by age five. That is where we should be doing something, and we have done nothing, full stop, to change that agenda. That is why deprivation continues and those operators in areas of deprivation will continue to struggle and continue to close.

The cost base has increased for all types of providers—private or voluntary providers. For example, 64% of the early years sector is represented by the private and voluntary sector, 71% of the early years workforce are employed by the private and voluntary sector and 86% of the total childcare places are delivered by the private and voluntary sector, and yet there is no equity. They are treated differently. For the workforce who work in these settings, it is important to acknowledge and recognise that they are doing a fantastic job, which they are. I think it is really why they are so passionate and committed to working early years, but for a small provider taking on a private sector provider, which sometimes is seen as private sector with a big “P”, they are actually mums or parents who started their business in the community because they could not find adequate childcare for their own children; 80% of the sector are single-site providers or two or three nurseries. For those providers, like we mentioned before, their home is mortgaged, their home is their nursery—sometimes they live upstairs and downstairs is the nursery—and yet they have to pay business rates. The voluntary sector gets discounted rates but in Wales and Scotland they manage to achieve 100% business rate relief permanently. Both Governments have announced it permanently now. Recently the Chancellor gave some kind of relief to the hospitality sector and all the other sectors but not to childcare providers. On average, for a small nursery, the bill for business rates is around £27,000 and, of course, the Valuation Office Agency recently changed the rules. Previously it used to measure the space for children to play and enjoy, and it changed it to number of children rather than space. Now we are told it is changing back to the space requirements, and nobody knows why that is happening, so it is very unclear. Again, the NIC, the business rates, living wage and minimum wage are all Government-imposed costs that are adding to the pressures and particularly in the private areas. Sometimes I get phone calls from providers saying, “I have been doing this for 30-odd years. I have had enough now. I don’t think I can do that anymore.” Sometimes they are not even taking a wage out of it. There is a huge variation in not only where they are based geographically but also why they start struggling.

I will pick up a slightly different angle from what Purnima said. We have a mixed market sector and unfortunately we have market failure when it comes to disadvantaged areas. If we look at DFE’s own figures as an indication, the income-to-cost ratios for private providers is 1.24, for voluntary providers 1.09, for maintained settings or for nursery classes 1.0, for nursery schools less than 1.0, that is their costs are higher than their income, and the same for childminders at 0.92. You have a system here in the most economically disadvantaged areas, in a system where government funding does not cover the full cost of the entitlements, and particularly, as Neil identified, those children with additional needs. The market fails. Private providers don’t want to operate there, and voluntary providers can’t operate there. They can’t cover their costs, so who has to step in? The maintained sector, schools have to, but what is happening is nursery school deficits are growing exponentially—and I mean exponentially—so we will see more closures there unless something is done. In nursery classes it is something we have known for a long time. Technically, there is not supposed to be class subsidy but basically more than half of primary schools, under DFE’s own figures, are subsidising their nursery classes. We know particularly now with the fall in population numbers that they are worried about their school rolls and will they fill their classes, so they use nursery classes as a loss leader to get children in the door. With the pressure on school budgets in primary schools, how sustainable is it to keep subsidising your nursery provision? It is between a rock and a hard place really there. Particularly the Government moving to a point where they are paying for 80% of all the hours in the early years, you can’t work on a cross-subsidy model. That is where there is a tough decision ahead. Governments have successively chosen to increase the number of places without putting up the fees to cover the costs. We are now in a position that if you do that, the system falls over, so whether you want your provision in disadvantaged areas to be run by maintained settings or private or voluntary, for everybody it is a time where unless the income covers the cost, we will just see more deserts and more gaps.

Can I say something about the impact of the childcare deserts? On families and parents it is access and choice. For example, I live in Enfield, which is not considered a childcare desert at all. I did not have childcare a week before I joined Coram PACEY three years ago. I could not find a childminder even though I really wanted one. That was my choice. I ended up with two nurseries, very far apart, and grandparents. I was using three childcare providers, and I don’t live in a desert. That has already taken away my choice, and I don’t believe that is access either. If we are thinking about areas such as Enfield, which are not considered deserts, and then think about the actual childcare deserts and what parents are going through, we have removed their access and choice in those places.

I have a specific question for Beatrice. Maintained nursery schools are a very small part of the sector and also very expensive because of the staffing costs. They need to have qualified teachers and all of that. Can they function in this market? Is it possible to structure staffing in such a way that they can continue to function?

I think virtually every nursery school in the country has put in place round after round of efficiency cuts, that is cuts to staffing, to the point where there is at least one nursery school that has no teachers except the headteacher. Can they function on current funding? No, and again there are those deficits. The deficits are partly to do with the lack of funding but a huge amount of that is to do with the number of children with SEN that they support. I will turn the question around and say: can you afford to lose any more nursery schools? I would say absolutely not, because we know that. There are now 379 left; 36% of nursery schools have closed since 1987. I think we could see a massive rush of closures in the near future if we are not careful, but they are so important. In 2024 there were over 6,000 disadvantaged two-year-olds in maintained nursery schools, of which, as we have said, there are only 379. There were just under 12,000 disadvantaged two-year-olds in primary schools. Despite the effort to get schools to open two-year-old provision, 379 nursery schools have 50% and 5% of all the disadvantaged nursery schools nationwide. Again, 29% of children in nursery schools have SEN compared to an average of 12% in group providers, 6% with childminders. There are 75 nursery schools registered as having designated SEN provision units, so they will get extra funding for that. Many have very similar proportions of children, very similar provision, without any additional funding to do it. This comes back to the question about whether you want a market or a public service. Nursery schools and schools more generally are set up as community organisations. They have to have admissions policies that prioritise the most disadvantaged students. We don’t put that requirement on private and voluntary providers. I agree with colleagues that there are many who go into it with very good intentions. There are many in the sector that are not making a profit who are absolutely there for the right reasons, but if you want a community institution that has an ethos of, “We are here to meet the children’s needs”, you need everything to be raised to the level of a nursery school, not to take away your nursery schools and going down to the lowest common denominator.

It is good to get those stats on the record. Another stat is 62% of them are rated outstanding by Ofsted and we are looking to them as the model on which other childcare providers should base themselves and replicate. Is there nothing that can be done to restructure them to make them more affordable?

Look at the value that you get out of them. Studies show that very often they are supporting children who are in related care, so they are taking the burden off social services. Even when they are not designated Sure Start children’s centres or family hubs, many of them are doing that same work. You have to look at the value you are getting and the cost that you would have to meet somewhere else if you don’t have them. You have to look at the early years as an investment and if you try to say, “Could we cut nursery schools further?”—no. We have not even talked about the work they do leading early years funded practice hubs, which we may want to come on to, and all the other work that they do supporting the sector. You want the capacity to do more. It is a bit like the discussion about ratios. If you pare everything down to the absolute minimum, you cannot support children’s needs and you cannot meet the needs of the rest of the sector. Last month we had the Minister at our nursery school heads conference and a bunch of heads were saying, “I am now in the position where I am having to think about turning away children because I do not have the resources”. That is a cliff edge that you don’t really want to cross over. These are the institutions that take the children that no one else can take, including reception age children that primary schools can’t cope with and where there are not special school places. There are so many places where nursery schools are holding up the dyke and we can’t afford to lose more of them, we really can’t.

Thank you. Point well made.

Before Beatrice presented what is a pretty depressing position, I was going to say perhaps that is the benchmark that we should all be trying to elevate ourselves to. There is a significant difference in the rates paid for schools and so on and what you are getting. It is interesting that if you type into any search engine the most respected professions in the world, it is inevitable that teachers will come within the top 10, full stop. Marry that with the graphic that The Sun newspaper produced about 18 months ago, which was the 20 jobs that nobody wants to do: number 10—and they used the term “practitioner”—was early years practitioner. I come back to the point that these are the most critical times in shaping a child’s life chances. It feels really odd that we continue to consider it as predominantly care as opposed to development. We would not tolerate a position, for example, where if you had a six-year-old in school and their parents stopped working, you would say, “You are now only entitled to attend school for two and a half days a week”, but that is exactly what we do in early years because the motive is economics not child development. As opposed to staffing, which seems to be a race to the bottom, we should have a race to the top where this is one of the most important phases of a child’s education and development.

Thank you very much for your answers on that. I have another specific question, this time for Ka Lai, about nannies. We know that Coram PACEY has called for greater professionalisation and regulation of nannies. Can you tell us how many nannies there are in the UK and how many children they look after?

The latest Ofsted data, which was from August 2025, shows that there were 7,225 Ofsted-registered nannies. That is a 7% decline on previous years. Nannies, just like all home-based childcare professionals, are seeing a decline. You can either register with Ofsted, or you can be an unregistered nanny. We are pushing for the fact that we want all nannies to be registered; there needs to be regulation. We want them to be brought in with the wider sector and fill part of the sector. Nannies and families can claim tax-free childcare at the moment, but they can’t claim entitlement funding because they are not part of the sector in the same way. Nannies have their advantages. They provide a home-from-home environment, they work very closely with families. Often if you are a family with two or three children, nannies could be more cost effective because of the cost of childcare at the moment. To benefit the whole childcare market, we really want to bring nannies more into the fold and make sure that they are serving families who are entitled to that as well.

Sorry, I might have missed it. Do you know how many children they care for?

I don’t have that figure, sorry.

That is absolutely fine. Is that the sort of thing we should collect data on?

Yes, definitely. We want data on whoever is working with children and providing childcare and education—not just the places they provide but their skills and levels of expertise and also the demographic of those nannies.

Is there a reason why you want to regulate them? What impact would that have on the sector more broadly?

I think it would bring them in line with the rest of the sector. It might possibly allow for the conversation about the entitlement scheme to apply to nannies as well and you need a regulated sector for that. That is why we would like that.

My question will be about recruitment and retention. Recruitment and retention have featured heavily in the early questions, but this is an opportunity now for you to share your views and experiences. You mentioned earlier the recruitment pipeline and concerns regarding quality, the number of applicants, competing with the Aldis and the supermarkets of this world for pay. You have also mentioned concerns about opportunities for good quality training. Are the challenges based more on recruitment or retention or is the reality both?

I think it is both. We have to look at why people come out of the sector as a starting point. They gave three reasons when we did some research, and I will never forget these figures because they stick in my mind. The first is that 77% said they felt undervalued and particularly by Government. That comes back to the point that I was making: if you are considered a teacher, you are considered to be a professional.

Can I just ask for clarity? What does undervalued by Government mean?

It is predominantly post-covid, and I will give you some other examples. If you take testing, for example, that was given to the early years sector literally I think 10 days before it was made generally available to the public, even though we were not wearing masks and we were exposed to young children. When it came to Kevan Collins catch-up fund, I remember getting an email at about 6 o’clock on a Thursday evening saying, “We are about to release the new information, the new allocations. You will be pleased to hear, Neil, that early years is in there.” The current Prime Minister gave a quote saying how important early years is, as did the Secretary of State for Education. One hour and 10 minutes later I received an email to say, “Sorry, it is not for early years” but the quote thanking the early years still remained. I could go on and on. Current communication is awful sometimes. We have just had communication that basically said the best place to have your child transitioning to reception is to put them in the physical location—schools, schools, schools. Nobody thinks what is the impact on the vast majority of providers that are delivering this service and do it for the right reasons. When I talk to early years educators and ask them, “Why do you do this?” they don’t use words like profit and loss accounts, balance sheets, return on capital investment. It is, “I love children. I want to change their lives. I want to shape their lives.” I come back to that whole thing about the search engine. How is it that teachers are recognised as one of the best professions and yet in The Sun newspaper early years practitioners are right down the line? That is why I say they are undervalued. There are two others. Exhaustion is down to the fact that they are having to work more hours because there is a staff shortage and so on. They are having to deal with more children who might have social and emotional development requirements and needs, higher ratios. That is exhausting. That was 72%. Interestingly, despite the fact that almost every single year I am placed in front of the Low Pay Commission to explain why our people are the bottom of the pile when it comes to earnings, only 72% said earnings. We are using up their good will. The final statistic paints a picture. It is about two years old, but it will still hold today. To buy the average home in the UK you would need five early years educators living in that home combining their income. That is how we value early years educators, whereas—and this is not about decrying any other profession, but giving context—if you are a refuse collector you need only three and a half of you living in that house. If you are a postal worker, you need only three. Everybody has their place, but somehow early years educators seem to be at the bottom when it comes to status, credibility and value. There are some positives in the Best Start in Life, I think, if it converts from rhetoric into reality, but that is where we are now.

There are 300,000 people working in early years. Why do they feel that they are second class citizens? I think we need to really understand not only as a society. We don’t value them and anybody working in the care sector is always the bottom of the pile. Government communications don’t help either. Every time there is the “Thank the teachers day” nobody mentions early years. I am pleased to say the current Secretary of State acknowledged that and started little videoclips to thank the workforce, which is a starting point. I think it is the recognition of the status. We give evidence—and Neil does this too—to the Low Pay Commission every year and the data it published found that 10% of the workforce are paid at national living wage the statutory minimum. This is similar to social care, retail, agriculture. However, early education and childcare is the sector with the second highest rate of staff paid, just above 50% of the workforce, £1.50 of national living wage. That just shows where the levels of pay and conditions are for the workforce and that directly relates to the funding that providers receive. There is no way they can invest in their staff training, invest in giving them better way and conditions. Pay is important but a lot of people are sticking in the sector because they are passionate about early years. They are committed to making a difference to children’s lives and that is why they are there. Sometimes we are taking advantage of that situation, and we need to really invest in how we can improve the status of this workforce and acknowledge and loudly say, “How wonderful you are”.

Of course pay, of course status, of course value, but it is also about working with your health colleagues; you mentioned SEND as well, rising demands that are causing concern. My question is possibly best suited to Beatrice. Is there a disparity between maintained settings and PVI settings when it comes to recruitment and retention?

Absolutely. As colleagues have said, pay is a factor but so is career progression. One of the things about having the split sector, maintained and non-maintained, is that you have some people who for their career progression will move from PVIs to schools because the pay and conditions are better—you are more likely to be able to upgrade your qualifications. You get Inset days to do your CPD. You can look at that as a negative, but I think for the individual it is a positive. There is a route. You might start in the less well-paid end of the sector, and you might be able to move through, but that is not really what we want for the sector. Why does it matter what the name is above the door? We want everybody to be starting on the same conditions, the same pay and having the same opportunities. One of the recommendations of our report is that we should not have unqualified staff. Level 3 should be a starting point, not the point where you can run a setting and that is the most you need to work in the early years. We have to be more ambitious. As Neil said, we want to level everybody up. We would like Government to have an ambition for everybody to have or be working towards a level 3 when they start. They do this already in Scotland. We would like every setting to be led by a graduate teacher. Again, they are already there in Scotland and internationally we are lagging behind to not have a graduate-led early years system. We are starting to look incredibly out of place with everybody else. We could get rid of the split within the early years sector, but we would still then see potentially a drift of people moving into primary. You have to look not just at the fact that we are losing people to Aldi—people will be looking at a range of careers, so it has to be just as attractive to work in the early years as it is to work in primary. We should be looking at PGCE which gives you QTS for birth to eight, so that we have the same workforce working in reception and key stage 1. The quality, the knowledge of child development in reception is totally inadequate. It is not covered within the average PGCE but all the issues we have about raising quality and getting that 75% of children through GLD mean we need reception teachers who know about child development as well. If we have that much integrated approach where we say, “You can come in, you can work in early years, which by the way I have on reliable authority is the best job in the world”, and you can see that route to being the headteacher of a primary school, an adviser in the local authority, you can see a real not just, “I will be here and I will be doing the same thing”. There is definitely an issue about career progression and qualifications that give you the route to career progression. Colleagues have talked a little about the stress and lack of support being a factor in retention. I mentioned earlier about the loss of experienced staff and the spiral of we don’t have the people to support. It is having the systems in place where you have mentoring. To compare, a teacher who has QTS will have a two-year induction process. If you get an early years teacher qualification you may not get paid any more than you would on a level 3, and you do not get any additional support. So we have all these inequities in the system that we need to iron out.

There are slightly different reasons why we cannot retain childminders, because they are freelance and work for themselves. In terms of financial viability, DFE data shows that a childminder earns 91p for every £1 spent on costs. Childminding is typically a lonely profession; 71% of childminders work alone. We are seeing that the average age of a childminder is slightly higher than an early years group setting worker. Childminders are retiring and we are not seeing the new cohort of childminders coming through. Another thing is the administrative burden. Childminders care for children between 8.00 am and 6.00 pm. All of the admin, to run their business, has to be done out of those hours. That includes claiming funding, doing all of their CPD, every type of admin that they cannot do during working hours. So the childminders have to work very long hours. Those are the main reasons, but the number one at the moment is the funding rates for childminders that I know is an issue across the sector, but for childminders it is a particular issue because the funding rates are set on group setting ratios and not childminder ratios. The funding rates are not catering towards the smaller ratios of childminders and 80% of their business is now funded, so that is a huge pressure on them. Instead of giving up three and four-year-olds, they might instead choose to close their childminding business. Those are the options that they have at the moment. In terms of retention, we have not done anything in the last few years to look at how we retain childminders. In terms of acquisition or recruitment of childminders, it goes back to that undervalued feeling. The Government introduced a £600 start up grant for childminders. That £600 to start up your own business from scratch is not enough—compare it to the £1,000 offered to colleagues in the group setting area. That feeling of being undervalued shows in little initiatives that have not been thought through alongside childminders. When you are looking to join a profession, you look at how your colleagues or peers would be treated. If you look at childminders, we have 25,000 childminders who should be advocating for more childminders to join the profession because it is such an amazing profession, but not many childminders could say that at the moment. For those who are looking to come into the profession, looking to get advice, it is not an attractive proposition looking at how childminders who are already in the profession are treated. With recruitment, we really struggle in terms of representing childminders, and representation matters. Childminders within the sector are not as well represented as they should be and this comes across in all of the recruitment campaigns and strategies.

You have all spoken with such passion about the incredible experience of working in early years, but also some of the real challenges. The Government say the “Do Something Big” campaign is aimed at making a difference to early years recruitment and improving public perceptions about what it means to work with young children. What affect have you seen that have, and what more do you think the Government can do to address some of the challenges that we have touched on?

It is positive messaging, but it is quite superficial. It is not really addressing the reasons why people leave. Frankly, there is no point getting more people through the door—one of the recommendations in our research report was we should not take people on to early years qualifications unless they have some work experience in the sector because you need to weed out the people who, when they get to the realities of it, say, “This is not for me”. You need people to come in with not just the glossiness of a new campaign but having experience of, “I have volunteered at my local nursery for a couple of weeks, and I understand what people are doing day in, day out”. You might be surrounding by crying children. I saw an article the other day about a college where they are starting to play the sound of crying babies in the background while the students are studying, to get them used to the idea that sometimes it is a challenging environment. To work with young children is incredibly hard work emotionally. We talked about the wonderful things, but we also have to balance that to make sure that people come in not just because they have been pushed down a hair and care route, of not being academic but would be fine in early years. We need people who are not just passionate about the idea of being able to play with children all day, but understand this is a much bigger job and it could be working with parents to say, have you thought about the fact that there may be an issue of SEND that we need to have a look at with your child? That is a very difficult conversation to have with a parent. It is, how do we understand—and again, this is the wider public perceptions—but we need people to know that this is really complex and demanding work. It is incredibly rewarding, but it needs the right people. It is great to have a campaign that puts some of the positives and maybe will push a few people to finding out more, but you have to make sure that there is then a process that ranges from good careers advice in school—not just at school, because actually a lot of the workforce will be, for example, parents who, having had a child, think they want to set up a business or want to become a childminder or want to work with children. That is a brilliant part of the workforce to target. We need to be targeting more men as well and making sure that we have a diverse workforce. We need a sophisticated campaign but it is no good if it is filling a leaky bucket. If we are not paying people and are making their working conditions too challenging, the glossiest campaign is not going to keep that bucket full.

Neil, you have already mentioned concerns around the use of the term “childcare” versus “early education”. Do you want to expand on that and add any other thoughts?

In answer to your fundamental question, I do not think the campaign has done much at all in terms of educating parents if it did not bring people into the sector in terms of recruitment and retention. What really changed the dial was covid, when parents started to recognise the challenges of having young children around you, social and emotional development. The Royal Foundation has done quite a bit of work to try to improve parental perception of the importance of early years. Terminology is critical. It is why we never say “practitioners”. We use the word “educators” because it is the first part of a child’s education. “Development” would probably be more relevant than pure education. It is a slightly derogatory term, but I accept it is a common term. It is interesting when you talk to parents: many parents feel that they are losing the ability to be parents. They are predominantly mothers. A little while ago I was asked by the chair of a large supermarket if I would come and talk to their staff about early years. I said, “What do you want me to talk about?” “How we can get more mums back into our supermarkets.” I said I would do it, but only if they allowed me to talk to those mothers, and it was all mothers. I spoke to 42 mothers. Nearly everybody said that they would change the pattern in which they were forced back to work. I know this is a slight deviation from your question, but it comes back to the importance of looking after children so their parents can go back to work. It is not just care. It should be about child development. Mothers were in tears because they would come home at 5 o’clock in the evening from work; they said they would spend an hour with their child, usually bathing them, but they were buying them more sweets and toys because they felt guilty. The whole thing about child development has to be reconsidered and we have to avoid the work thing. It is the work agenda that makes it become childcare as opposed to child development.

That really is taking a broad view of that question, thank you.

Well, it is important.

To pivot to something slightly different, but nevertheless extremely important, we have also already touched on the challenges with supporting young people with SEND to have the right places to be able to access good quality early education. Coram Family and Childcare have advocated extending statutory admission duties to private, voluntary and independent advisors to prevent exclusion of vulnerable children by those settings. We have also talked about how funding rates do not cover the costs of care for children with SEND. What are some of the solutions here? What can we do to make sure that children with special education needs, in particular, are able to find an appropriate setting?

Early staff are best placed to identify any issues with children, because they are working with very young children and they also work closely with parents. Anything that is happening in that child’s life, whether it is a physical condition, they are able to identify. Unfortunately, the support mechanisms are not in place at the early stages of that identification. Parents have to wait a long time for any EHCP plans. Also, most importantly, the funding that is required to look after those children is inadequate. Some of these children need one to one care and they need skilled, specially trained staff who understand those issues. I know SEND is not part of the remit for this inquiry, but it is really important. There is a schools Bill going through and I am pleased that SEND is given the priority; it definitely needs as part of the agenda for the Government’s strategy, but we have a long way to go in terms of SEND. Early identification is number one, but the early support mechanisms need to be in place, for both parents and children. It is absolutely crucial that funding is allocated at the right time, in the right place, to support those children’s needs. Training for staff is also important, because, since covid, we are seeing more and more children with additional needs and difficulties. In terms of funding, since the expansion started we have been doing freedom of information requests to local authorities since 2017 to identify how much of the early years funding has actually been used for early years. Consistently, year on year, we are seeing under spends. Last year, £57 million of early years funding was not spent on early years. Where did the money go? Local authorities told us the majority of it has gone into the additional needs block, because that is where the bigger deficits are. Some local authorities actually said that some of the funding has gone into their reserves—their words, not ours. What we need to look at, at a local level, is how the funding is being distributed and how it is reaching providers. I know there is a consultation coming through on the funding formula that is long overdue, funding for special needs children and for providers and families, but early identification and support is absolutely crucial.

You mentioned training, what training does the early years workforce already get on special educational needs? Is there any bespoke training that the sector has to or is undertaking?

There is a lot of training available, and the Department sets up training. We have a specific paediatric first aid training called Millie’s Mark. Unfortunately, Millie was a little girl who died of choking in a nursery. Her parents set up a trust, and we deliver paediatric first aid training, to make sure that all nursery staff are trained in paediatric first aid, not just a few people. That training is available. ADHD is on the increase. Neurodiversity has very complex issues and it is difficult for practitioners to understand and address the needs for those children. There is training available, but what is important is to really focus on is what are the needs of that child, because every child is different. It is important to have that conversation and focus on that as part of the SEND development and strategy.

To press on the part of my question referring to statutory admission duties, many parents with SEND children find it difficult to find a setting that is willing to take on their child, recognising the additional support needed to care for and educate that young child. Could any of you speak to that point?

This is something I have been advocating for a long time. We also have to be realistic, because even primary schools that have the statutory duty, we know they do not always fulfil it. It is very welcome that Ofsted is now putting this front and centre of inspections. Although a few months before it decided to do that, I was having conversations with Ofsted inspectors who were saying they were not sure how Ofsted was going to do it. So, as yet it is untested. If you go into a setting and say, “It is interesting you have no children with SEND”, how do you know? Is it something they are doing wrong, or is it just statistics? The numbers will vary, particularly with smaller settings. It is not straightforward, but it is a good flag to be saying, “If you are not taking children, why not?” There might be settings that say that child is going to involve additional resources so we would rather not, but a lot of the time it is simply the staff may not have the expertise and the confidence. One of the reasons why nursery schools can do what they do is that they are generally larger. We did not get around to talking about this, but they do have much better retention. The average age of staff in schools tends to be higher, they have been there for longer. That means you have more years of experience. We once did a survey in our nursery schools of what training they had had on SEND and got an enormous, long list.

They have SENCOs, right?

They have SENCOs. The difference is that a PVI may have a SENCO. A school has to have a SENCO, and it has to be somebody with a QTS. The introduction of the level 3 SENCO awards a couple of years ago is a very positive move forward, so that more PVIs will have somebody who has a level 3 qualification in SEND, but it is not universal, and it is not a requirement. The last revision of the level 3 standard added a lot more on SEND, so people now coming through who are doing a level 3 should have covered more on the needs of children with SEND, but it is not retrospective. A huge amount has been done to upskill the workforce around the needs of children with SEND, but we are still a long way from where we need to be. It is worth remembering that it is a very broad range of children. There will be some children who have lifelong developmental differences, and you will need to make sure that you are a meeting their needs so that they will have the best possible life course. There are other children who are very difficult in the early years, particularly with things like communication and language. Is that life long? Is that just a developmental delay and they will catch up? If you give them the right support—and this is where nursery schools have an amazing track record—by the time they are starting primary school, they might have caught up. If you invest in supporting special needs in the early years, the amount of money you would save is huge. That is where, at risk of being in a negative spiral at the moment, local authority deficits around SEND means they have been rationing support in the early years rather than focusing as much funding as possible in the early years to save spend later.

Can I just encourage a little bit more brevity with the answers so that we can get through all the topics that we want to this morning? Thank you.

I want to go back to what was said about the unspent need. There was an article in The Times at the weekend about unspent money for children with special educational needs. Why is that money not being spent? Is there an inavailability of somewhere to spend it, or is it that they are choosing not to spend it on special needs?

The early years funding, including funding for SEND, currently sits within the DSG grant, which is the dedicated schools’ grant. In theory, that means any underspends in the early years funding can be used in other areas’ schools funding to cover any deficits that they may have. The issue here is: what are the major issues and challenges for local authorities? Where are the deficits? Within the DSG that money can be used in different areas. Coming back to children with SEND, from a provider perspective, providers will have to be sure that they can fully meet the needs of that child, according to regulation and law. If they feel that they cannot meet the needs of that child, they are not able to take that child. Not just necessarily funding, but also the expertise and the skills of staff that are required to be able to look after that child. The funding is a major issue, and I know that ringfencing SEND funding is also on the agenda in terms of the review and reform of SEND, but it is important that where funding is allocated for specific reasons, it should be spent for that area rather than looking at the overall budget. We argued for ringfencing early years funding for a long time, but there are pros and cons of ringfencing, as we all know, but it is important that now we are getting to a stage where if it is allocated for SEND, it has to be spent on SEND children. A lot of providers could take more children, but they cannot because first, they do not have enough skilled staff, and second, the funding is not adequate.

The question then becomes: are they not spending it? Some of it has apparently gone into reserves. Are they not spending it because there is no one available to spend it with, because there are no local nurseries available to provide for their needs?

In terms of childminders, often they are best placed to care for children with SEND, primarily that home from home environment. We do know that take up from childminders for the supplementary funding streams is low. We are not quite sure why. It could be that they have no knowledge of that, and that is something we need to look at. It could be that the administrative burden of claiming those four supplementary funding streams is just too much with what they are already doing. In terms of childminders, yes, they are best placed sometimes, but maybe their take of funding has not quite got there yet, and we need to work on that.

The other point I want to come to was, Neil, you talked about ladies in a supermarket and how they really wanted to spend time with their children. One of the joys of parenthood is those first words, being there for their first steps, seeing them draw their first picture or painting. That is all part of being a parent. Beatrice, you talked about the stressful environment of nurseries with people crying all the time and how that makes it difficult for the grown-ups to think. Presumably, it might have a similar effect on the children as well. I appreciate you are representing early years providers, so this might be difficult for you, but are there are any disadvantages to this direction of Government to push people into nursery all day, every day, at earlier times of the day and take them away from their parents?

I don’t think that there is a conflict in terms of representing our members, because if we have colleagues who do this work and they are not interested in children and their families, then we have lost the plot. The alliance is all about representing the best interests of a child, and we will not lose focus of that. The day we become a body that represents whatever anybody wants regardless from a financial perspective, is the day we shall stop being an organisation. So I do not think that there is a conflict. I also think that it is a balance. As I said earlier, we are in a position where many children do not spend time with their parents, and many parents want to spend time with their children. It is about parental choice and attachment. I was asked a question a little while ago, and I will quote it again because it is important in determining what is in the best interests of a child. It was by a journalist who said, “What do you think success looks like when a child leaves a nursery, pre-school or childminder and goes onto big school?” I found myself saying, “I don’t care if they can recite the alphabet, count to 100 or name five planets. Success is a child who is kind, empathetic, happy and will go on in life to have those qualities”. Surely parents are a major part of providing that support to their children. It is about balance. It is interesting when you look at the happiest countries in the world, and you look at their early years systems. It is also interesting that last year a headline in The Telegraph said that we were the second most miserable country in the world. Just a few months ago, the happiest countries index came out. Look at their early years system, look at how they support parents right from pre-natal all the way through. It is not about rush, rush, rush back into early years, it is about doing what is in the best interests of children. I do accept there are some six-month-old children in our settings that are better placed to be there, because we give them a great experience. Unfortunately, sometimes, we send them home to chaos. It is a balance between supporting parents from our perspective and also Government allowing parents to be parents.

I accept that there are parents in chaotic households where the child may be getting something from the nursery that they are not able to get at home, but are there situations where parents are capable and wanting to look after the children where putting—and almost pushing—them into a nursery setting, five days a week for many hours of the day, might not always be in their best interest?

The research shows that, by and large, the impact on children being in a high-quality setting is positive. From memory, it is only once you get to children being in settings over about 50 hours a week that you start seeing negative impacts. But it is individual. All of us would love to say that it would be great if parents had that choice. None of us are inherently representing parent organisations, but we would all be entirely sympathetic to the idea of parental choice and a system where parents were not having to go back to work too early for financial reasons. The best bit of evidence that I can give you is the Irish Government—when they were revising their OBA policy a few years ago—asked children to recommend to our Government what they wanted. What the children said they wanted most was more time with their parents.

It is important to understand that the family structures are different. Every child is different; every family is different. Sometimes parents cannot afford not to work, and the current economic situation is that both parents will have to work. I have been a working mum all my life and my children went into nurseries. As a parent you carry that guilt all the time, and sometimes the society puts that guilt on you. If parents can afford to stay at home to look after their children, financially and emotionally, they would do it. It is important that we acknowledge the parental choice. If some parents want to do that, they can do it. What the Government’s expansion programme has done is given them more flexibility to be able to make those choices. If they are able to work more hours or stay at home—even now, we see on Mondays and Fridays, nurseries are empty because parents are either working from home, using those flexibilities in terms of their working. Every parent’s situation is different and what is important is to have that choice as a parent to be able to not only decide where they want to send their child, but whether they want to look after themselves or send them to a nursery or a childminder. That choice is very important.

It is definitely the administrative burden for childminders, but also at local authority level, the portal for claiming entitlements is very complicated. Different local authorities may be slightly easier, but that is a sector-wide issue in terms of how they access that funding. It is very complicated. From my previous experience of being a parent, being a parent and trying to access that funding at the same time is very complicated as well. So, it is not working for either side in terms of administration.

One of the questions you could ask is: is it efficient having a system like this? Every time we say, “Could the Government open up and expand the working parent entitlement, for example to cover people in training?” they will say, “There is a separate pot of money for that.” Is that an efficient way of doing it? Certainly, for parents, it makes it very complicated. It used to be the case that local authorities had discretion and provided full time places for the most economically disadvantaged families and families who were facing problems with mental health, drug substance misuse and other things, like the chaotic household that Neil was referring to. You can identify that those are the children who benefit most from that. Our current system does not give anyone the flexibility to say, what are the needs of the child, rather than what is the parent earning. What we are also now seeing is, on one hand we have the disadvantaged two-year-old offer, and we have the working parents two-year-old offer, and then we have a little group of children in between who are falling between the stalls. Other countries, for example, Scotland has a universal two-year-old offer. Is it simpler just to have more universal systems, certainly for parents? To an extent, one of the issues for providers with having two, two-year-old systems is the working parents are the ones who apply for places massively in advance and then you have the dilemma of do you fill all the places with working parents, because if they are not full they cannot cover their costs, or do they keep places for children they know will need them most but who may turn up until a week before term starts.

The system is very complex for parents. We have: three and four-year-old funding; two-year-old funding; tax free child credits; the childcare element of universal credit. There are so many different systems, and some parents are totally confused. In fact, some parents are not accessing what they should be accessing. Simplifying that funding system is absolutely crucial because that not only helps parents, but it helps providers as well because they are spending so much time on unravelling the payments. Now that they have more children, nine-month-olds and so on, that is taking most of their time in terms of administration, and that is an important area the Government could look at. A few years ago, when we suggested digital access to funding, the system and infrastructure did not exist. With tax free childcare, it does now and that is something the Government should look at as part of this because tax free childcare is now popular with working parents for topping up what they are paying for childcare. The complexity of the system needs to be looked at.

That is without even mentioning universal credit, which has so many problems.

It is different Government Departments working together adding the unintended consequences we have seen, particularly on the universal credit and the childcare element. Parents are reporting that DWP is not allowing them to claim back any charges for meals and snacks, and those are the children who need those meals in a nursery.

If I may say so, there is hope. The Best Start in Life strategy does allude to looking at the funding mechanisms and as long as it is not just a pure distribution angle, but much more about the process and administration, that would be critical. I would like to hang on to that as a positive in terms of directional traffic.

If I can bring up one other thing on the system, free school meals in the early years: again, a complete anomaly and only in schools if you are in before and after lunch. This should be universal, but again the schools need to look at it being automatic, not something that has to be applied for.

While for more junior staff, pay has increased in line with national minimum wages, our evidence suggests that more senior staff are not getting appropriate uplifts. What is the impact of this and what is the solution?

They walk. I was giving a talk at the University of East London a little while ago, and a lady at the back held up a poster that said, why always minimum wage. The big challenge that we have is the differentials. Of course, our colleagues are deserving for everything I have said earlier on in terms of status and the work that they do. They are deserving of considerably more. But when you push minimum wage above inflation rates and funding increases that we get, and then you have the differentials, you have to manage that. That results in pretty big challenges, to say the least.

The pay differentials has become a big issue. Every year when the living wage and minimum wage goes up, the gap between the workforce in terms of managerial and team leader level and room leader levels is becoming really close. It is difficult for providers to be able to afford to pay the higher-level staff a lot more than what they are getting paid now. That is where if the funding does not go up in relation to those costs, that is where you have the difficulty in terms of recruiting people.

So the solution is that the Government need to increase the funding?

That is what the Government promised—that they will take into account the new hourly rates, which have not come out yet. They should be coming out anytime, hopefully before Christmas so that providers can plan their business plans from April. They did promise that they will include and cover living wage, minimum wage and cost of living, but we have to see those raises to see whether those costs will be covered.

It is not just covering the cost, because you have to ensure that that money goes back to the educators and managers and so on. There should be an established pay scale that is set, and we work to it. In a way, that would be the driver to make sure that first, our colleagues are professionalised and respected, and second, are adequately funded.

It is that relationship between the pay scale, the registration system and a ladder of qualifications. If you have those three pieces, you can address a lot of these issues.

Do you agree that there should be formal structures for agreeing nationally recognised roles, pay and qualifications for the early years, as are in place for teaching and support staff in schools? It sounds like there is a pretty common agreement to that, but what barriers would there be to achieving it?

Childminding is slightly different, because childminders are self-employed. There is childminding assistance, and childminders, and it is all tied to the funding rate because 80% of the business is funding. There is thinking about how to bring childminders in line with the sector so they do not feel even more isolated, so any change that might happen would need to consider that. I also think the one opportunity of being a freelancer is that you can grow your business, and we need to remove barriers to help childminders grow their business so they can earn more income. That is slightly separate to how the rest of the sector do it, but there does need to be something more in line with each other as well.

If we agree, what might the barriers be?

I would say Treasury. DFE get it, but Treasury does not prioritise early years the way in which it should. It is not about more money. In my opinion, it is about the priorities that we set on early years. We have just found £41 billion for some submarines, and another £12 billion for defence systems. When we want to find money, we find it. My argument would be, what could be more important than shaping the life chances of our future citizens?

Any other barriers?

It is worth thinking about the fact that 42% of the sector are on benefits. You might pay them more, but the benefits might go down. It is thinking about the global, as well as those long-term. I am talking about the opposite of the barriers really, but if you had better paid staff, your retention is better and there are so many benefits to doing this. The sector would be fully behind it, as long as they knew it was funded. We know that, for example, in Scotland, funded settings now have to pay their staff the real living wage but there is a get-out clause of, but you do not have to if you cannot afford it, if the local authority cannot pay enough. We cannot have get-out clauses. We have to have a required pay scale and the money that allows people to pay it. Already this is the problem we have in nursery schools, that the structure of staffing they are required to have is not covered by the funding in some cases.

Regarding childminders, Ka Lai, you have spoken about the important contribution that childminders make to the early years offer and the fact that newer childminders are not coming into the sector. We know that the number has halved since 2010. How do you think the movement to pay through entitlements has affected childminders differently from other early years workers?

Hugely, even more so for childminders. Some 80% of their freelance business is funded now. It is based on group setting ratios rather than childminder ratios. The three and four-year-old rate, which we know is a problem across the sector, significantly impacts childminders because of the lower ratios. They cannot just take on more nine-month-olds to make up that income. Related children is also an issue. Group settings and childminders in Wales can claim funding for related children.

I was going to come on and ask you about this.

That is not their own children. That is skilled, experience childminders who would like to eventually care for grandchildren, or aunties and uncles. We know that 49% of childminders who do care for their children are doing so free of charge. So you are running a business and giving up one of your vital places free of charge. We would like that to be brought into place for childminders. In general, we would like to review the childminder ratio funding strategy and would like a more childminder centre approach. Just exploring how we can do that differently for childminders based on their ratios.

For some families, the setting that is quite different from a nursery could be just what a child needs. It is an important part of the jigsaw, is it not?

Yes. It is the home from home setting that is their USP. They are very flexible and in terms of that home from home setting, it is often better for children who do not do well in groups. My son came out of the back end of covid and was not great with groups, so that was why I wanted to place him with a childminder. Unfortunately, I could not get one. Some 70% of childminders also provide wraparound care and they often care for children with SEND. They are such an important part of the sector, and an important choice for parents and children. If we did not have childminders by 2033, as predicted, it would be a huge loss for the sector.

Why do you think only 65% of childminders are being paid monthly, as they should be by the local authority?

We have many answers to that question from different local authorities. Some local authorities say they have given that option to childminders who have chosen not to take it up—that is very small. We are told that for some local authorities the set-up of the portal and the payment structure cannot move to monthly. It is a really big barrier for childminders, if you think about 80% of the business being funded, and only being able to receive that funding termly. It is a long way to go between pay dates. That is something we would like to see more, it is in the best start in life strategy, but we would like to see that as an option for all childminders.

Chair, could I ask Neil a very quick question?

Super quick, we are very tight on time.

I apologise for coming in late; I was in another meeting. From what you have said, given the importance of the first thousand days in a child’s life, do you think that we have the emphasis right in our education system with early years always being the Cinderella part of the system? Or should we be putting all the attention on the early years so that children have a better chance of better health and outcomes as they move through the system later on?

Really quick answer: absolutely. We should prioritise early years because all of the data, all of the evidence, shows that is where you get the biggest return on human capital investment. Do I think we do it? No, we are a million miles from it. Do I think we have intention within the strategy to achieve it? Hopefully, yes.

We have had quite a lot of evidence on exactly that theme, so we will move on.

There is no way of avoiding the reality that what we are talking about here is, in part, childcare. Looking after children while parents go to work. We have already talked about the challenge there. But it is also about education, and it is really important not to lose sight of that. How do we get that balance right? Are we getting that balance right across all settings in providing the childcare that is absolutely vital but also the education that the youngest children need to develop?

It is not about childcare in an early years setting, it is about a child’s development. If we wanted childcare, we could Sellotape children to chairs to stop them running out in the street, and so on. That is not what this is about. This is about developing young children. I don’t think that is an issue in reality. We have to follow the early years foundation stage, for example. I do not think that is the problem. It is about perception of what early years is about and that’s a concern.

I take what Neil is saying but I do think that you have to say that if it is about education and not childcare, then we are not investing enough in our workforce because the data does show that having a higher qualified workforce does impact on children’s outcomes. We have a system that relies on a low qualified workforce, because it is cheaper, and a highly prescribed system through the EYFS. In other countries, they have chosen to have a much less prescriptive framework but a much more highly qualified workforce. It is a false economy to say that we will have less qualified staff and just tell them what to do. Every child is different. As I said, there is so much complexity to the role to understanding what a child needs to be their absolute best and fulfil their potential. We do need to focus on the development and education, the learning and development, and we need to make sure that we have the workforce who understands everything that they can do for every child to best meet their needs.

We cannot separate education and care because they are both integral. Children are learning, right from the womb stage to when they are born to when they are in early years. They are continuously learning. In early years, they are learning through play, and that it why we were pleased to see the words “early education and care” in this Government’s policy, right from the beginning. That is how it should be, because you cannot separate the two. Parents are always the first educators of children. Some parents do it a lot better than some others, but that is where nurseries or any other early years providers, like childminders, come in. They are there to encourage that learning and development, but they do it through play, interaction and engagement all the time. You cannot separate education and care; they have to go hand in hand.

What role do early years practitioners have in helping to shape the home environment for learning?

We gave examples of during covid, parents actually recognised the value of early years practitioners during that time because they knew how hard it was to have children at home and still be working, online or whatever. It is important that early years educators engage with parents regularly, and they know and understand the issues, so they are able to talk to the parents and identify any family issues. So, they are actually acting as family counsellors, social workers and educators, all rolled into one. It is important that the role is recognised, so they are being educated, albeit through play.

Ka Lai, when we look at childminders and nannies, is there a consistent level of early education being offered across that part of the sector, or are there variations?

It is important to remind ourselves of the registered settings, 96% or 98% were registered good or outstanding as of August. That is across all of the settings, not just childminders, but group settings as well. Besides all the pressures they are still providing good or outstanding Ofsted judgment gradings that follow the EYFS. Everything that the Government were saying they want for our children, and how our providers care for them, is in the EYFS. Sorry, is it 98%?

Ninety-eight per cent.

Ninety-eight per cent. For childminders and nannies as well, we are providing a very good level of care and education despite the pressures.

How realistic do you think the Government’s aim is of a qualified teacher in every early years setting, given the context of existing peer pressures?

If I can just go back to the previous Labour Government’s 10-year childcare strategy—that is how long I have been in early years—we had a target at that time that every setting should have an early years teacher, and two early years teachers in the most deprived areas. We also had a target for level 3 qualified staff. What we also had was funding that following that strategy. That was the time when we achieved the highest number of early years teachers and level 3 staff. Not only was the funding available for them to get qualified, but there was funding available to settings to cover the staff when they are going for training. Now we have a situation where I know it is in the strategy that there will be an early years teacher in every setting, but what is important is that because of the staff shortages, people are not able to release their staff for training even when there is loads of free training available, including the DFE pre-training. That is a major issue. We should have a target for qualified staff, but most importantly, we should have a proper workforce strategy that supports that target with adequate funding.

I would say it should be the entire workforce. I am slightly concerned that it just focuses on a teacher as opposed to wanting to uplift the entire qualifications of the workforce. Realistically whether it could be delivered is dependent upon when we start, and that is the concern. Whether it gets kicked down the line and all of a sudden, we find by 2028-29 we are then starting the programme. It is part of it; it is in the right direction.

There are plenty of countries who have done it, Scotland and New Zealand have done it. We have lots of examples. It can be done, but it has to be a sensible timescale and have the investment that follows, both for the training and the good point that Purnima raises about the availability of people to get out to do that training, but also making sure that there is the pay because there is no point in training people up and then not paying them, because you will just lose them. We also have to say that the current early years teacher model is a disaster. If the Nutbrown Review findings had been implemented, and we had QTS birth to seven implemented 12 years ago, we would now be in a far better place. This last year, there were only 680 new entrants to the early years teacher route. At its height of the graduate leader fund, there were 2,000 early years professionals undertaking a graduate qualification at that point. Nobody will do the early years teacher qualification because with exactly the same entry qualifications, you can do QTS and you can then have the career progression of working in a primary school, with the pay and conditions that go with that. Or you can do EYITT because you really want to work with children under five, but you will probably only get paid what a level 3 gets paid, and you will not have that ability to move around and work in schools and do other things. If we are going to go for graduates, it has to be teachers.

That has to be across the sector, PVI settings as well as maintained settings?

Yes.

The word I would use is “creeper”. I will come back to the point, but when it was first introduced, it was, “You do not have to do this.” It is interesting that the sector said, we are not going to do it. And now, when you talk to providers, it has almost become a regular occurrence that they will take on more children. I come back to the point that if it is the difference between you getting in an additional revenue or closing your business, you have a massive conflict of interest. All the evidence shows that the lower the ratios, the better the outcomes for children. There is nothing that is positive about this other than pure economics that you can get 25% more of your original revenue for a two-year-old. That cannot be good for children. The most disappointing thing is that in opposition, the current Government was absolutely opposed to it and said it was not in the best interests of children. Because it has inherited, as the Secretary of State says, a promise without a plan, it has done nothing to address that position. So it is inevitable that it will cause more exhaustion, more stress, and it is not in the best interests of children.

I want to talk about qualifications, which you have touched upon but maybe you can contribute new ideas. Our evidence suggests that a major overhaul of early year qualifications is needed. Do you agree? If so, who should do this and what are the barriers to rationalising these qualifications?

That is going to be part two of our research, that we are hoping Nuffield will fund us to do some work on that question around qualifications. What we got out of the research was that everybody across the four nations is saying that the landscape of qualifications is incredibly complex. If you are coming in, how do you know which one to do? If you are an employer, just because it says level 3 on the box, does not mean that the person who walks through the door will have the same set of skills and knowledge. So we have real issues about it being confusing and inconsistent. People are still saying, in the good old days, we had the NNEB, and that was the gold standard. People still seem to feel that despite multiple reviews of the current level 3, somehow, we are still not achieving that previous qualification consistency, churning out people—huge numbers of them are still in the sector, which is interesting in terms of their longevity as well. What we need is to say, what is going wrong. We have the standard that we can tweak again, but it may not be that. Is it about having multiple qualifications offered by awarding bodies, and below that multiple providers offering this qualification? Somewhere in the system, the quality assurance is not good enough to guarantee that what you have is going to be consistent in terms of quality. Again, perhaps that is another workforce quality issue: are the people who are delivering the training sufficiently highly qualified themselves? We have that issue that theoretically they should at least be a level above the students they are teaching, but that may not always be the case. We need to look at all of those levels to see where we are losing quality and consistency, and what we can do to reform it.

Anyone else?

For childminding, I just have a plea that we bring back the requirement for training for childminders. It was taken out of the EYFS early last year. We were told at the time it was in order to help those already in the sector in other settings move freely across to childminding. That is obviously a miniscule number of people, and we have removed the requirement for training for childminders from the EYFS. The childminders are highly trained at the moment—98% are good or outstanding Ofsted judgment—but in terms of the new cohort coming in, we want to make sure they are as well trained as the current childminders. We also want to make sure that the childminders looking after early years children have more training requirements than those on the other early years registers, or at least at a level playing field. So that really needs to come back.

What is important is the qualification landscape is very mixed at the moment and it definitely needs consolidation. That is something that can be done as part of the early years register that the Government are currently looking at. What is also important is as part of the qualification there has to be practical training. We have issues where people who are early childhood studies graduates, who have no experience in working in early years, are working in an early years setting. That is something that needs to be taken into account. There has to be an element of qualification with some practical experience attached to it.

The extension of entitlements to cover children from the age of nine months has led to more younger children being in childcare. Do we have sufficient evidence about what constitutes high quality group-based care for this very young group of children or babies?

Some providers are well geared up, and they have colleagues who are sufficiently qualified to be able to support the youngest children. I would also say that many providers, certainly in the conversations I have had, have talked and aired concerns that they do not have specific detailed training for the youngest children. So, it is a challenge. Again, what we have done is brought the entitlements in and now we are trying to work out how we best support these children. That is not a good place to be. This is a profession, so it needs qualified people that are appropriately qualified across the entire target audience that it serves.

Anyone else?

There has been some excellent research in recent years on the needs of babies, but the big gap is qualifications and delivery and not putting the least qualified staff in baby rooms.

What about room sizes, not just in terms of staffing ratios but room sizes as well—is that an issue?

Yes, the latest research is making recommendations that there should not be more than 12 babies in a room. That should be the maximum.

Also, the interior architectural design of baby rooms is important. The physical environment, not just the numbers, that a child is developing in is appropriate for their age, whether it is light, sound or whatever.

The Nuffield Foundation has said that the level 2 and 3 qualifications do not cover care for this age group adequately. Do qualifications need to change for this particular age group? Should staff with a higher level of qualification be looking after babies in childcare settings?

Again, it is part of that experience and part of those qualifications, the training. Nurseries had babies before the nine months old have started accessing that early childcare, but not to the extent that they have now. But they have always had babies. Some providers have special baby rooms and staff are trained in terms of looking after very young children. Looking at the expansion and qualifications now, we need to make sure that caring for very young children and babies is part of that training and qualifications framework moving forward. That is really important.

Before we go to Chris for the final question, returning to the question of qualifications, do you think there should be more of a role for specialism within the landscape of early years qualifications? Would that help with the question of recruitment, retention and progression? I am thinking about specialism in terms of SEND, speech and language, outdoor education, music education and things that we know can make a difference to the quality of a setting. Should that be more available? Is there a role for it to play?

If you compare it to schools, schools are generally larger, and you have a lead for this and a lead for that. The variation in group size in early years is very large, so in some settings it is just not viable to have. You have to be the expert in everything. In larger settings or in chains, we have the wonderful Maths Champions Programme that NDNA have developed, and there are lots of places where you can have people who are the forest school leader or the outdoors expert, or whatever. Again, it depends on what your qualifications ladder is. If you have a sense that CPD should be career long, then you can be saying yes, and you can keep adding new chunks to your portfolio. First, if we are just focused on level 3 as a minimum entry and graduate leadership, then that is quite a big target to get through. I am sure that age retention, if you can have people specialise in their particular enthusiasms, but I do not know much of an issue that is going to be for those coming in. At the moment, we are so far off the basics that that is more of a luxury than a must have.

If I can just follow up on that quickly, you have talked a lot about having a higher qualified workforce, but there are lots of girls and young women who go into childcare who have not gone down an academic route at school, and maybe were not ever going to get A levels and they see it as a legitimate profession that they want to go into. Do you have any concerns that if the benchmark is made too high, and we say that they all need to be graduates, that we are going to lose?

We are not saying that they all need to be graduates. You need graduate leadership. In many cases, it is really undervaluing those young women who go into the sector, who maybe have not done well at school, but that is not to say that in a vocational setting they cannot achieve qualifications. We have so many people in the sector who have been mature learners and who have gained qualifications. Also, why on earth would you say that to be a veterinary nurse and look after animals, you must have GCSE English and maths, but you do not need it to look after children? We have to say, this is education and you do need a level of education to deliver education. Given the problems with the GCSE English and maths qualifications themselves, where we have such a failure that so many children are not achieving those, we do not want to then perpetuate that problem coming back into the early years. You want people coming in who are confident in maths, who are good communicators and use language well, and they will then support the next generation.

It is a generic answer. I would say of course we should be concerned, and we should be guided by the evidence, science and those who have experience in this area, because in terms of the context of volumes, it is pretty new to the sector. There is learning to be done, and it is not a binary answer at this point in time.

We definitely need to be concerned, yes.

With childminders, obviously the ratios only allow them to care for one child under the age of one, so it is slightly different for childminders and nannies. In terms of the training and everyone who is involved with that, because it is new to a lot of childminders as well, this does need to be considered.

Thank you very much indeed for giving us such detailed evidence over a long period of time. We often have two panels, but we have had the one panel for two hours, so we are really grateful to you for your time today. If there were any areas where you did not feel that you were able to get across all of the information you wanted to share, please do feel free to write to the Committee after the session, and we certainly welcome that very much. Thank you to all of our witnesses. That brings our session for today to a close.