Childcare plan won't work without more money – MPs

The government's plan to expand funded childcare for working parents "will not work" unless the amount paid to providers is right, MPs have warned.

Underfunding had left the sector "straining to provide" enough places for children, the Education Committee report found.

Early-years charities have welcomed the inquiry's focus on the challenges facing the sector.

The government says it is increasing the amount it pays childcare providers.

Working parents of three- and four-year-olds are eligible for 30 hours of government-funded childcare during term time - but by September 2025, this will be extended to cover children aged nine months and above.

Robin Walker, who chairs the committee, said the childcare market faced significant challenges in "affordability and availability" and "simply extending the number of hours that the government calls 'free' will not work unless the funding rates accurately reflect the costs of providing high-quality early education and childcare".

The report warns it is vital the government "gets this right, or the already struggling childcare market will see even more closures" and the sector needs "radically more financial and regulatory reform".

The MPs also want better evidence of the effects of formal childcare on under-twos and say there should be more support for parents who choose to stay at home to look after their children.

Many settings currently charged children not on funded hours more, to compensate for the hours government paid for, the inquiry heard.

Nicola Fluery, who owns the Kidzrus Nursery Group, in Salford, Greater Manchester, said funding had been an issue "for many years" and she had had to supplement the amount the government paid for those children eligible for funded hours, in other ways, "for example, bank loans".

In April, the government's planned rollout of the extension of funded childcare for working parents will begin, starting with 15 hours for two-year-olds. And Kidzrus nurseries are already receiving calls from parents keen not to miss out.

Demand "will far outweigh the number of places available", Ms Fleury fears.

National Day Nurseries Association chief executive Purnima Tanuku agrees "the policy could fail" if it fails to tackle underfunding.

From September, the average hourly rate the government will pay will rise from:

It is also consulting on proposals to increase the rates for next year.

The wide-ranging report had a number of recommendations, with the committee calling for:

Parents in training or education should also be able to access government-funded hours, the report recommends.

The Department for Education said it was rolling out" the single biggest investment in childcare in England ever, set to save a working parent using 30 hours of childcare up to an average of £6,500 per year and give children the best quality early-years education".

"To make sure that we are supporting our fantastic early-years workforce, we will be investing hundreds of millions of pounds each year to increase the amounts we pay childcare providers," an official said.

"We also are consulting on how we distribute funding to make sure it is fair."