www.nesta.org.uk/press-release/government-spending-on-young-children-in-england-increasingly-prioritises-urgent-care-over-prevention-audit-reveals/
An audit of UK Government spending on early years in England has revealed a dramatic shift away from preventative services like family support to more reactive services like children's social care.
The analysis, published by innovation charity Nesta and carried out by Alma Economics, examines public spending on children aged 0-4 in England across different government departments and finds it has stayed largely stable since 2010, at around £6,400 per child.
However, this masks shifts in where the money is targeted. The period from 2010 to 2023 has seen a decline in spending on preventative services, such as wrap-around family support, in favour of more acute services, such as children's social care.
The analysis looked at spending across welfare, healthcare, childcare, and children's services and social care. Spending on children’s services and social care fell by about £300 per child since 2010/11 - around a 25% drop - with this reduction almost entirely driven by an approximately 75% fall in Sure Start spending.
In addition to this overall reduction in spending, the analysis shows that the proportion of spending on children’s services and social care on preventative services, such as Sure Start, has also reduced. In 2010/11, 6 in 10 pounds were spent on preventative services, but in 2022/23 this figure is 3 in 10. Funding has instead increasingly focused on services that respond to children with more urgent needs, with children looked-after by their local authority now the single largest item of spending in this area.
The analysis also finds there that welfare spending on children aged 0-4 has fallen by approximately £1,000 per child since 2010/11. This represents a real-terms decrease of about 26%. As a result, welfare spending has gone from 60% of public spending on children aged 0-4 in 2010/11, to 46% of total early years spending in 2022/23.
In contrast, spending on free childcare over the same period has seen a big increase, becoming the second-largest source of spending on children aged 0-4 . Spending per child on free childcare has almost trebled since 2010/11, as a result of a large expansion in free childcare hours.
Early years healthcare spending has also increased, and in combination with free childcare, spending in these areas has almost doubled from £1,400 per child to £2,600 per child between 2010/11 and 2022/23.
While total Government spending on early years has changed little, the analysis notes that lower income families may have been negatively impacted by the shift in where money is spent. Welfare cuts have hit families on the lowest income the hardest and Sure Start, which was highly targeted at poorer areas, received some of the biggest spending reductions. Meanwhile, at least half of the free entitlements for expanded childcare subsidies are now being used by families in the top half of the income distribution.
Economist and director of Nesta's early years programme Dr Sarah Cattan has warned that “standing still” on early years expenditure means that the UK government is unlikely to meet the goals set out in its opportunity mission.
Dr Sarah Cattan, director of fairer start at Nesta, said: “Government funding across all departments for children’s early years has effectively stood still for over a decade. Where there has been change, it is wrap-around services and welfare that have seen big cuts. These services target prevention and early intervention - both have suffered in favour of funding for more urgent needs.
“Public money is exceptionally tight at the moment, but if the Prime Minister wants to achieve improvements in ‘school readiness’ set out in his Plan for Change, then additional funding will need to be found. The early years of children’s lives set critical foundations their physical, emotional and cognitive development. The government can’t square the circle of making early years a priority without finding room in the budget elsewhere for care that supports those needs, especially for lower-income families.”
Robert Joyce, Deputy Director at Alma Economics, said: “Total public spending on the early years has changed little, in per-child terms and after adjusting for inflation, since 2010-11. However, the nature of this support has changed greatly. Much more is now provided through free childcare, and much less through the welfare system and Sure Start centres. One key result is that the focus of the system has been tilted away from children from lower-income families and poorer areas.
Only by combining multiple sources of data has it been possible to assess how the size and shape of early years support has been changing. We hope that this provides a clearer basis for further policy decisions and debate.”
Notes to editors
About Nesta
Nesta is an independent think tank focused on solving society’s biggest challenges.
Nesta conducts experiments with public and private organisations, builds and invests in early-stage ventures, and shapes policy.
Our three missions are to give every child a fair start, help people live healthy lives, and create a sustainable future where the economy works for both people and the planet.
For over 20 years, Nesta has worked to support, encourage and inspire innovation. Harnessing the rigour of science and the creativity of design, we design, test and scale solutions to change millions of lives for the better. Find out more at nesta.org.uk
