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The majority of early years funding is benefitting wealthier families, with the most disadvantaged only getting a ‘tiny fraction’ of help, new research suggests.
According to a report published by Labour MP Lucy Powell and the Social Market Foundation (SMF), just £250m of the extra £9bn funding the Government has set aside for early years provision over the next five years will reach those most in need.
Commenting on the findings, Ms Powell said: "Britain languishes at the bottom of the international league tables when it comes to using early years’ investment to tackle disadvantage. Far from addressing this, over the next parliament, this is set to get significantly worse with just 2.7 per cent of new money for early education and care dedicated to the most vulnerable children.
"This huge skewing of resources seriously risks a widening developmental gap between disadvantaged children and their better off peers at the age of five, creating a lost generation who will struggle to ever catch up.
"Early years investment has always been a balance between supporting working families with childcare costs on the one hand and increasing life chances and social mobility for the disadvantaged on the other."
The report comes as the Government launches its offer of 30 hours ‘free’ childcare for working parents of three- and four-year-old children.
The scheme is part of a £9bn drive to boost childcare and early years education over the next five years. However, the report found 75 per cent of the funding for extending the free entitlement would benefit the top half of households by income.
The report also found three in 10 disadvantaged two-year-olds are still missing out on a free childcare place, despite new evidence to show that this can have a marked impact on development.
Similarly, twice as many disadvantaged two-year-olds in the most deprived areas are missing out on a free childcare place compared with their disadvantaged peers in the most affluent areas.
The think-tank is calling for a rethink of the policy, and proposes replacing the tax-free childcare with more progressive childcare support that is geared towards helping disadvantaged children.
Ms Powell added: "With the development gap at five still stubbornly wide, and one in three children not ready for school, rising to half for low income children, more of the investment in the early years needs to be ruthlessly and relentlessly focused on narrowing the gap otherwise we risk a lost generation of children."