Coram Family and Childcare submission to Spending Review 2025

Coram Family and Childcare recommends that the Government introduces and funds a universal right to 30 hours per week of early education for children from the age of nine months until they start school.

A universal early education and childcare entitlement would have the dual impact of supporting the Government’s milestone of 75% of five-year-olds reaching a good level of development by 2028, while also stimulating the economy. Therefore, we recommend that the Government prioritises funding for early education and childcare in this Spending Review.

We outline research demonstrating the cost of universal childcare and the return on this investment. We also outline policy recommendations for children and families underserved by the current system – such as children and families in poverty, children with special educational needs and disabilities (SEND) and children in migrant families.

Ensuring all children have the best start in life

The current childcare system is working against achievement of the Government’s mission to break down barriers to opportunity and give every child the best start in life, for two main reasons:

Children who are already more likely to reach a good level of development are due to receive more government-funded early education hours (30 hours per week from the age of nine months for children with working parents, from September 2025 (currently 15 hours per week)) than children who are most at risk of not meeting their developmental milestones and most likely to experience the impact of their background throughout their life (15 hours per week from the age of two for children in non-working families in receipt of certain benefits) .
While there are some funded hours targeted at disadvantaged families, and some universal hours, children in poverty are less likely to take up their existing funded early education place[1] for a number of reasons including low awareness of the entitlement, complexity of the system[2], stigma associated with accessing a targeted offer and provider prioritisation of families more likely to generate the most income.[3]

Raising living standards

Childcare is vital social infrastructure, but the current childcare system is ineffective at making work pay and can disincentivise work for many parents, especially second earners and single parents. This is because:

Childcare costs are high, even with the expansion to funded early education entitlements in England.[4]
For those who receive support through Universal Credit (which covers up to 85% of childcare costs in arrears, or up-front when someone starts a new job), take-home earnings after childcare costs are unlikely to be sufficient in providing a route out of poverty.[5]

High childcare costs also have a negative impact on the overall economy.[6]

To fix this, we recommend the Government prioritises spending to be most effective by introducing a universal funded 30-hour entitlement and a single co-payment system to replace the current, complex system of Universal Credit childcare support, Tax-Free Childcare and funded early education entitlements.

We recommend the Government: Introduces a 30 hours per week universal offer of funded early education and childcare for children from the age of nine months until starting school.
Introduces a co-payment system, whereby families wishing to access additional childcare hours can do so via a single, means-tested system.
Ensures that families below the poverty line are not required to pay for childcare.

A sound investment

In 2023, the New Economics Foundation (NEF) argued that “high-quality, universal early years education is likely the highest-returning investment a government can make”⁸, so high even that investment in early education “pays for itself even when funded entirely through borrowing.”

The NEF model the costs and returns of a high-quality, universal childcare system that provides 40 hours of early education and care per week for 48 weeks a year.
The NEF estimate that the fiscal benefits of the above investment would be 2.07:1 due to childcare’s impact on maternal employment rates and earnings, child employment rates and earnings (as adults), increased productivity, reduction in crime and employment within the sector.
The IPPR and Save the Children also recommend increased universal education hours for children irrespective of their parents’ circumstances[7].
The IPPR and Save the Children estimate that making a high-quality 30-hour childcare offer across 48 weeks universal for two- to four-year-olds and extending wraparound provision would cost the Treasury £17.8 billion a year, include the £8 billion a year gain from increased parental working and £2.1 billion in savings from closing the existing childcare schemes.

Restrictions of the current system

The current childcare system suffers from being disjointed and unfair, with different children and families entitled to different amounts of funded early education, Tax-Free Childcare and childcare support through Universal Credit.

The current system is expensive to administrate and communicate to parents and does not represent good value for money.
The current system acts as a barrier to opportunity for some children in particular: children with special educational needs or disabilities (SEND), children whose parents are not in work or do not regularly work 16 hours a week, including children whose parents are disabled or terminally ill, and children whose parents are migrants or who have no recourse to public funds (NRPF).
Restrictive childcare funding has a negative impact on wider society; for example, thousands of student midwives and nurses have ended their training because they cannot access affordable childcare.[8]

Parents who want to start work or training

Restrictive childcare funding is a barrier to parents engaging with adult education, skills and employment support.
Building an affordable, accessible childcare is a crucial step in breaking down barriers to opportunity at every stage in life and to making work pay.
Currently, accessing funded early education entitlements is restricted by a child’s birthday and funding periods (based around school terms), creating limitations for parents as they attempt to move into work. For example, if a parent is offered a job starting in the middle of January, they must wait until April to access their funded early education entitlement.
The previous Government made improvements to the childcare element of Universal Credit by enabling parents’ childcare benefit to be paid upfront (rather than in arrears) when they move into work.
However, the most a parent can receive for childcare costs under Universal Credit is restricted to £1,014.63 per month for one child, or £1,739.37 for two or more children.[9] This falls short of the average price of a full-time nursery place for a child under two in England (£1,220.44), and significantly short of the average price in high-cost areas, such as London (£1,713.04);[10] families in poverty will not be able to cover the difference.

Children with terminally ill parents

People with a terminal illness can access fast-tracked benefits[11] but are not entitled to extra support with childcare costs and cannot access the extended funded hour entitlement if they are not in employment.
Childcare costs are one of the leading reasons that working-age families may fall into poverty following a diagnosis of terminal illness.[12]
A universal childcare guarantee would ensure stability for young children at this incredibly difficult time and keep families out of poverty.

Children with diagnosed or emerging SEND

Qualified, experienced early years practitioners are well-placed to identify SEND early; introducing a universal entitlement to early education would support the Government to achieve their goal of improved early identification of SEND.
Many children with SEND will not be entitled to 30 hours of funded early education or any early education at all before the age of three (depending on their family’s circumstances) because their parents may be less likely to be in work.[13]
Raising a disabled child is three times as expensive as raising a child without disabilities, and over half of families with a disabled child are at risk of experiencing poverty.[14]

This Spending Review is an opportunity for the Government to realise the potential within the early education system to break the link between a child’s background and their future success, enable all children to meet their developmental milestones, make work pay and to boost the economy.

Priority admissions

In the school system, children in certain situations are rightfully entitled to priority admissions. However, in early years the same principle of priority admissions only applies to nursery classes in schools, despite these settings making up only a small minority of provision. The duty does not apply to private, voluntary and independent (PVI) settings, who deliver the majority of places, despite the Government estimated to be the largest buyer of childcare places by September 2025. This creates a postcode lottery for vulnerable children.

Children with SEND

Any maintained school (primary or secondary) named on an Education, Health and Care plan (EHCP) must accept the child to the school but the same only applies in early years to nursery classes in schools.
Only 4.6% of children with an EHCP are under the age of five[15] so equalising this policy across all age groups in all types of provision would be a small change that would make a huge difference to impacted children and their families.

Looked-after children and previously looked-after children

School admission authorities must give highest priority to looked-after children and previously looked-after children but the same only applies in early years to nursery classes in schools.

To remove the inequity experienced at the earliest years of a child’s life and give parity of experience with school-aged children, we recommend that the duty to accept children with an EHCP and to give priority admission to looked-after and previously looked-after children, be extended to all registered early years settings as a condition of receiving government funding.

Free meals

Outside of maintained nursery schools and school-based nurseries, which we have earlier identified as delivering a small proportion of provision, there is no equivalent of free school meals (FSM) in early years for children funded under the 15-hour two-year-old entitlement for families in receipt of benefits or the universal three- to four-year-old entitlement, most of whom are the same cohort of children who will be eligible for FSM once at school. This creates a further barrier to take-up of early education for low-income families and should be equalised across age groups.

We recommend that the duty to provide free meals to children meeting the criteria be expanded to all registered early years settings in receipt of government funding.
The funding formula used to determine early years funding rates to providers should be updated to reflect inclusion of free meals for children meeting the criteria.

Early Years Pupil Premium

We welcomed the Government’s recent uplift in the value of the Early Years Pupil Premium. However, this mechanism is still falling short of its potential to make a difference where it matters most and is another example of disparity between early years and schools.

Primary Pupil Premium is an effective mechanism for tackling educational disadvantage.[16]
High-quality early years education is proven to be more effective – and more cost-effective – at reducing the attainment gap than later interventions.
We recommend that the Early Years Pupil Premium is raised to be in line with the Primary Pupil Premium.

Workforce

The positive link between early education and improved outcomes for children relies on the quality of its workforce but there is a recruitment and retention crisis in the early years,[17] hampering the potential of early education to improve lives.^[18] We are also seeing providers being forced to take steps that will reduce the quality of provision in order to remain financially sustainable.[19]

In 2023, Nesta calculated that an estimated 27,500 additional early years educators are needed by 2028 to deliver the planned expansion of childcare entitlements.[20]

We acknowledge the steps Government has already taken to strengthen the early years workforce with announcements on the new early years teacher apprenticeship standard, the experience-based route for early years practitioners and the upcoming Check an Early Years Qualification digital service[21].

We also welcome the government’s stated commitment to introducing a workforce strategy. We recommend that the Spending Review includes provision to ensure the forthcoming strategy is as effective as possible, though a commitment to:

Introducing annual monitoring of pay and conditions, to address challenges with recruitment and retention.
Addressing continuing professional development, career progression and mandatory pay levels, as we are seeing introduced in the school sector, across the PVI sector which provides most of the early education and childcare in England.[22]

Special educational needs and disabilities (SEND)

To break down the barriers to opportunity for every child, the Government must address the crisis of access and inclusion for children with SEND in the early years. Even among children who are entitled to funded early education, access is low.

In 2024, only 6% of local authorities who were able to provide data for our Childcare Survey said they have enough early education and children places for disabled children in their area.[23]
Additional funding for children with SEND is often complicated to apply for, slow to access and insufficient in facilitating inclusion.

Under-fives are much less likely than school-age children to have completed assessments for Disability Living Allowance (DLA) or to have an Education, Health and Care Plan (EHCP) due to the emerging nature of many special education needs and disabilities and the time it takes to complete these processes. Therefore, it is imperative that SEND support in the early years does not depend on the child having completed these or similar processes; to do so would render it ineffective.

In this Spending Review, we recommend that the Government:

Increase the value of early years SEND funding and ring-fence the high needs block funding for early years.
Introduces responsive SEND funding, delinked from other assessments such as Disability Living Allowance (DLA) and Education, Health and Care Plans (EHCPs) which do not accurately reflect need for the youngest children.
Issues guidance on how this funding should be used to ensure that a child’s additional needs or disability are not a barrier to opportunity in the early years.

About Coram Family and Childcare

Coram Family and Childcare works to make the UK a better place for families, focussing on childcare and early years to make a difference to families’ lives now and in the long term. We are a leading voice on early education and childcare, carrying out research to aid understanding and drive change in national and local policy.

Every year, we publish our annual Childcare Survey and Holiday Childcare Survey – the definitive reports on childcare costs and availability across Great Britain. These surveys give a unique insight into patterns and changes across the years. The findings are widely used by policymakers and academics in all parts of the UK and beyond.

In October 2024 we released the findings of a national study into the barriers and facilitators of early education take-up by disadvantaged children.

Our network of Parent Champion schemes reach thousands of parents each year, with dedicated local volunteers ensuring parents are aware of their rights and entitlements, improving children’s outcomes.

We deliver the National Association of Family Information Services – the only national membership organisation supporting essential Family Information Service staff in local authorities to deliver high-quality information and advice to families.

We deliver responsive, family-focussed projects, often in partnership with other expert organisations, reaching some of the most disadvantaged families and levelling the playing field for disadvantaged children.

This submission is informed by our extensive research and our direct work with parents, local authorities, childcare providers and sector experts.

We are a member of the Coram Group of children’s charities and organisations. Coram changes lives, laws and systems to create better chances for children, now and forever.

About Coram

Coram is the first and longest continuing children’s charity – today we are a group of specialist organisations dedicated to supporting children and young people.

You can find more about how we work and how we use our experience of delivering services to bring about change here.

In our Charter for Children, we call for a realignment of the social contract between society and its children and young people through a ‘triple key’ of financial commitments from government designed to give them a just settlement, arguing that just as the triple lock on pensions introduced in 2010 has built economic security into the system for older people, we now need to give the youngest in society similar levels of security.

[1] Campbell, T, Gambaro, L and Stewart, K (2019) Inequalities in the experience of early education in England: access, peer groups and transitions. London: London School of Economics

[2] Chadwick, T, Chidley, S and Jones, H (2018) Low and middle-income parents’ understanding of childcare entitlements: a qualitative study. London: NatCen

[3] https://www.familyandchildcaretrust.org/understanding-take-early-education-entitlements-landing-page

[4] https://pregnantthenscrewed.com/childcare-cost-crisis-persists-despite-new-government-funding/

[5] https://www.familyandchildcaretrust.org/tackling-disadvantage-through-childcare

[6] https://www.progressive-policy.net/publications/lack-of-suitable-childcare-means-uk-losing-1-of-gdp-in-economic-output

[7] https://www.ippr.org/articles/delivering-a-childcare-guarantee

[8] https://www.independent.co.uk/news/uk/home-news/jeremy-hunt-childcare-students-government-b2492843.html

[9] https://www.gov.uk/help-with-childcare-costs/universal-credit

[10] https://www.familyandchildcaretrust.org/childcare-survey-2024

[11] https://www.mariecurie.org.uk/help/support/benefits-entitlements/benefits-social-care-system/special-rules

[12] https://www.mariecurie.org.uk/globalassets/media/documents/policy/dying-in-poverty/h420-dying-in-poverty-5th-pp.pdf

[13] https://supportsendkids.org/content/resource/515

[14] https://contact.org.uk/help-for-families/campaigns-and-research/research/