Government funding of early years education and childcare support, which is projected to reach around £6 billion a year by 2019/20, is one of the biggest single investments in early intervention that the current government makes. Five years on from the start of this policy, this analysis seeks to take stock of what the available data can tell us about the impact of the first years of the policy, and consider if anything can yet be drawn about how the policy might evolve.

The expansion of government-funded childcare to disadvantaged 2-year-olds was specifically targeted at reducing the early years attainment gap and is intended to better prepare disadvantaged children for the start of formal schooling. This report looks at the early signs of impact that the introduction of the 2-year-old entitlement has had.

The report looks at what explains local variation in take-up of childcare and the impact of take-up on the government’s main measures of pupil progress in the early years:

• Using DfE pupil-level data, our analysis explores the drivers of take-up in the first two years following the introduction of the 2-year-old entitlement. We consider pupils eligible for free school meals (FSM) at the beginning of Reception, and explore the factors associated with whether or not they attended government-funded childcare aged 2 in 2013/14 and 2014/15.
• The analysis also looks at recent trends in early years progress measures at the end of Reception, specifically for FSM pupils. We test whether there has been any association between the expansion of government-funded childcare among disadvantaged 2-year-olds and improvements in early years attainment.

Findings on take-up

• Take-up of the 2-year-old offer among FSM children increased significantly over the first two years following introduction, but there remains considerable variation, with take-up particularly low in major metropolitan areas.
• Although the cultural and linguistic characteristics of families in these areas appear to play a role in explaining low take-up, these do not fully explain the difference. Among White British pupils in London, take-up remains comparatively low.
• Access to places and differences in the type of providers offering funded places to 2-year-olds also appears to be an important factor, potentially limiting take-up.

Findings on early years educational outcomes

• The Early Years Foundation Stage Profile (EYFSP) is an insensitive measure to use in assessing the effectiveness of a policy such as this, making it challenging to detect any impact the offer may be having. In particular, changes to the assessment since 2011/12 mean that nearly 30% of FSM children now receive the same overall attainment score. Nevertheless, it is the government’s national measure of child progress in the early years.
• Over the past five years, the performance of FSM children at the end of Reception has been improving and the gap with non-FSM children has closed by a small amount. If the gap were to continue to close at the same rate it has over the past five years, it would be over 40 years before the same proportion of FSM pupils achieved a good level of development as non-FSM pupils.
• The rate at which the gap closed did not accelerate notably in 2015/16 and 2016/17, the first years in which the effects from the 2-year-old offer would be seen. At a national level, there is little evidence to suggest the introduction of the 2-year-old entitlement has been associated with a substantial increase in the early years educational outcomes of FSM children.
• Testing the impact more formally, we find mixed evidence of positive effects from the expansion of provision of childcare for 2-year-olds on FSM pupils’ EYFSP results:
  • In the first year we find no relationship between the number of months of entitlement children had for the expanded offer and pupil-level differences in attainment.
  • However, when looking at changes in attainment at the local authority level, we do detect a small positive relationship between increases in take-up over the first two years of the entitlement and increases in attainment of FSM children.