What price is free? The price effects of England’s childcare reforms

This project will investigate the impact of changes to early years education funding entitlements in England on nursery prices and how this affects affordability of childcare for working parents.

Why this project is important

Accessible and good quality early education and childcare is associated with numerous benefits, including a reduction in early life skill inequalities among children and the opportunity to strengthen parental attachment to the labour market. It is unclear to what extent the expansion of funded early education entitlements has reduced the overall cost to parents. Given shortages in childcare places, challenges in the sector’s financing and staffing, and the variation in the level of funding being passed from local authorities to early education and childcare providers, the reforms may not affect all families equally.

What it will involve

The project will evaluate the effects of the funded entitlement expansion in England on the pricing decisions of nurseries and the affordability of childcare. The following questions will be answered:

1. What is known about the childcare sector in England, Scotland, and Wales and its response to the current and previous expansions of funded hours?
2. How do private nursery chains differ from other childcare providers in terms of prices, quality, number of places, and other characteristics?
3. Did the free childcare expansion increase private nursery prices overall?
4. Have nurseries adopted cost-cutting or revenue-raising measures, such as new charges or limiting part-time care?
5. Do responses vary based on demand and supply factors, including the number of nursery-aged children, local childcare availability, and funding levels from local authorities?
6. How do price changes vary across areas with different levels of deprivation?
7. What are the effects of the reform on the total amount paid to send a child to nursery for different numbers of hours per week?
8. What can other UK administrations and other nations learn from England’s implementation of the funded entitlement expansion?

The research will involve analysing web-scraped data on hourly fees charged by nurseries linked to datasets about the local population of nursery age children, the availably and accessibility of nursey places, and hourly funding rates provided to nurseries. Ofsted and DfE data will be used to compare characteristics of the data sample to the rest of the sector.

How it will make a difference

The project will provide an evidence base to inform future reforms of early education and childcare provision on what works and why. The key audiences are the Department for Education, Ofsted, policymakers, think tanks, representatives of the childcare and third sector, and families.