The role of early childhood education and care in shaping life chances

October 20, 2021

Almost all children now experience some formal early childhood education and care well before they start school. But despite significant public funding, there are inequalities of access and take-up, particularly for disadvantaged children. Services remain prohibitively expensive for some parents while being provided by a workforce that is poorly paid and undervalued.

In this review, we examine the evidence on the quality, effectiveness and sustainability of early childhood education and care. We conclude that the system is dysfunctional and set out the need for a wholesale review to provide clarity on the purpose of early childhood education and care and how it can better meet the needs of children and families.


Early childhood education and care can take many forms and is more than just preparation for primary school. It focuses on the holistic development of a child’s social, emotional, cognitive and physical needs in order to build a solid and broad foundation for lifelong learning and well‑being.

Provision of early childhood education and care has grown exponentially over the last 25 years, from limited availability in the mid-1990s to an established UK-wide infrastructure on which many children and parents depend. But this expansion has been piecemeal, built up over years as successive governments have sought to address different objectives: improving child outcomes, increasing parental employment, and addressing disadvantage. This has led to a complex and confusing system that is failing to meet any of these objectives as fairly or comprehensively as it should.

Organisation and funding

  • In 2019 there were over 1.6 million registered early education and care places, of which almost half (47%) were in private nurseries, 20% in state-maintained schools, 18% in the voluntary sector, and 15% provided by childminders.
  • Government funding in England amounts to £5.7 billion a year, including Sure Start, and is split between free entitlements that go directly to providers, and support for parents to reduce the cost of childcare through the benefit system or tax-free childcare and employer childcare vouchers.
  • Real term spending per hour for places fell by 9% between 2018/19 and 2019/20 and government funding is not meeting the true cost of provision of funded places.

Inequalities in access, take-up and outcomes

  • Although 93% of three- and four-year-olds accessed their 15 funded hours a week in 2019, the most disadvantaged families are least likely to take-up their places. Take-up is also lower among children from some ethnic minority backgrounds, and among children with English as an additional language and those with SEND.
  • In some cases, policies designed to increase provision for working parents have inadvertently accentuated disadvantage, such as the 30 hour policy, which effectively gives children of higher-earning parents double the amount of funded early education than many disadvantaged children.
  • Support targeted specifically at disadvantaged children, such as funded places for two‑year-olds, is subject to wide regional variations in take-up, and close to a third of eligible children are missing out. There is a large gap in provision for children under two, particularly in light of the closure of many Sure Start centres.
  • This inequality of access and take-up is important because by the time children start school, there are already gaps in development between children from disadvantaged backgrounds and their more advantaged peers.
  • Short-term impacts suggest children starting school since the pandemic have fallen behind in relation to their learning and personal and social development, especially in the case of disadvantaged children.

Quality and the workforce

  • The recognition of the importance of early childhood education and care is not matched by the rewards for those working in the system. The average wage in the sector was £7.42 an hour in 2018, compared to £11.37 an hour across the female workforce and in 2019, 45% of childcare workers were claiming state benefits or tax credits.
  • There is a strong relationship between the level of staff qualifications and the quality of early childhood education and care, but despite cumulative reforms, qualification levels still vary across the sector.
  • In the private, voluntary and independent sector, the proportion of staff with an NVQ Level 3 qualification fell from 83% in 2014/15 to 52% in 2018/19.

The impact of early childhood education and care

Pre‑school provision can have positive impacts on early childhood cognitive and non-cognitive skills. This is particularly true for children from disadvantaged backgrounds when quality is high and provision is accessed at a young age and for a sustained period. However, more recent research shows that some of these impacts fade out in primary school.

There is also evidence of positive longer-term impacts of early childhood education and care provision for young people and adults in relation to exam performance, the labour market and some other outcomes.

Points for discussion

Given the complexity of a mixed market of early childhood education and care provision—is there a case for more structured standardisation akin to schools, or are there advantages in a plurality of provision?Should public policy and investment be prioritising the early childhood education of disadvantaged children over the childcare needs of the wider population, and if so, what are the implications for the funding and structure of early education and care provision?What type of funding model would increase quality as well as affordability for parents and sustainability of provision?What action can be taken to improve take-up of funded places by children who are most likely to benefit from early childhood education and care provision?How might a long-term strategy, including a review of the funding model, improve the low pay and low status of the early childhood education and care workforce?Can quality in early childhood education and care be effectively but efficiently measured, and if so, who should be doing it?How can early childhood education and care settings further engage and support parents and carers to enhance the learning and development of young children at home?How can multiple services for babies, toddlers and pre-schoolers be better integrated and coordinated, starting from the places and services that children already access?