Transparency data

Accounting officer assessment: early years and childcare reform programme

Updated 30 April 2024

Applies to England

Accounting officers have a responsibility to scrutinise significant policy proposals, projects or programmes and make sure the actions of the public organisation they lead meet the 4 accounting officer standards (regularity, propriety, value for money and feasibility) as set out in managing public money.

From April 2017, the government has committed to making a summary of the key points from these assessments available to Parliament when an accounting officer has conducted an assessment of a project or programme within the government’s major projects portfolio.

This is a summary of the accounting officer assessment of the early years and childcare reform programme.

Background

There is not sufficient, affordable, and flexible childcare that families need to work or return to work. In parallel, hourly costs to deliver childcare entitlements are increasing, driven mainly by inflation and the increase to the national minimum wage.

In the March 2023 Spring Budget, the Chancellor announced transformative reforms to childcare. By 2027 to 2028, this government will more than double its investment into the childcare support it offers, spending over an estimated £8bn every year on free hours and early education.

This programme is known as the ‘early years and childcare reform programme’ and is on the government major projects portfolio. The Department for Education is the lead department, with formal delivery links with HM Treasury, No.10, the Department of Work and Pensions, the Department for Levelling Up, Housing and Communities, HMRC and Ofsted.

The programme will:

• lower the age at which the children of working parents are entitled to government childcare funding
• support the creation of new early years childcare places
• support the increased availability of term-time wraparound care for primary school aged children

It will do this by extending the existing offer of 30 hours free childcare for working families, to cover children from 9 months until they reach school age. It will also increase the funding rates for providers to deliver entitlements.

The programme is intended to increase the early years childcare workforce, enabling 60,000 new parents to enter the labour market and more parents to increase their hours. The programme will provide funding to local authorities to fulfil the intended outcomes, including on wraparound care for older children.

Assessment against Accounting Officer standards

Regularity

The department has legal powers to fund this programme through:

• section 10 of the Education Act 1996, which is a wide ranging power for the Secretary of State to promote education
• section 14 to 16 of the Education Act 2002, which enables the Secretary of State to provide financial assistance in connection with the provision of educational services, including childcare and related services
• section 31 of the Local Government Act 2003, a wide-ranging power which enables the Secretary of State to pay a grant to local authorities in England

Expenditure on children’s services and for educational related purposes is covered within the departmental ambit.

Propriety

The programme has complied with departmental and governmental governance and assurance requirements and expectations. The department’s investment committee, and then HM Treasury, approved the business case. The department has secured delivery partners after commercially compliant procurement exercises.

The government has committed to provide this funding as part of the 2023 Spring Budget. As the programme crosses Spending Review periods, ongoing engagement will be required with HM Treasury to secure future funding.

Value for Money

There is a strong rationale for expanding and investing in early years childcare entitlements. It is expected to improve economic growth by helping parents to return to the workplace or increase the hours they work. Investment in good quality early childcare (supported by the increases in rates) will also both have a positive impact on child development, and support household incomes and living standards.

The economic assessment for the programme indicates a positive return on investment.

Other benefits include supporting parents into, and to progress within, the labour market. The Office of Budget Responsibility estimates that 60,000 more parents will enter the workforce because of the programme, while an additional 1.5m will increase their hours.

We expect:

• parents will get wider wellbeing benefits from being employed
• parents will have access to higher levels of disposable income
• attainment benefits for children entering childcare for the first time

Controls and assurance measures have been built into the programme to mitigate risk and ensure funding directly targets the desired outcomes. The programme will monitor value for money against outcomes and conduct evaluation as it progresses.

Feasibility

The department has:

• secured sufficient budget, with sufficient posts to resource the programme team
• adhered to all internal review and approval processes
• established project and portfolio management methodologies and processes, to monitor and manage the project

All delivery methods have previously been utilised by and within the department. They expand upon existing systems, processes, and arrangements with other government departments.

The principal risks to the programme are that:

• providers do not increase the availability of places swiftly enough to meet parental demand
• local authorities do not have the capacity to deliver sufficient places, particularly in the later stages of the programme

The risk is low in April 2024 but higher for the stage of the programme involving the largest increase in capacity, for September 2025.

Our key actions to ensure we are securing sufficient places are to:

• set the hourly funding rate at a level that will incentivise providers to offer places and grow to meet the demand
• stage the programme carefully to allow for growth in capacity over time

We are also mitigating this by:

• closely monitoring local authority readiness via regular engagement and termly self-assessments
• providing additional funding in financial year 2023 to 2024 to support local authorities to meet the costs associated with preparing for the rollout
• making sure a delivery partner is in place to support local authorities

We are also investing through the programme in national recruitment activity and skills provision.

The programme will support local authorities to work with their local childcare markets to create sufficient places, increase numbers of childminders as an alternative to nurseries and increase wraparound care for primary school age children.

Conclusion

As the accounting officer for the Department for Education, I have considered this assessment against the 4 accounting officer standards, and I am satisfied the programme relies on clear legal powers, meets the standards of managing public money and accords with the generally understood principles of public life; represents good value for money for the Exchequer as a whole; and is feasible to deliver.

If any of these factors change materially during the lifetime of this programme, I undertake to prepare a revised summary, setting out my assessment of them.

This summary will be published on the government’s website (GOV.UK). Copies will be deposited in the Library of the House of Commons and sent to the Comptroller and Auditor General and Treasury Officer of Accounts.

Susan Acland-Hood

Permanent Secretary