• New analysis shows Wales’s current childcare system has places accessible to just 65% of eligible children, leaving a baseline gap of over 26,000 places that could widen to over 45,000.
• Only 34% of available childcare places are rated highly, while a quarter of all places remain unrated and availability varies widely across local authorities.
• Innovation charity Nesta supports the Welsh Government’s plan to expand funded childcare to two-to-four-year-olds, but calls for the expansion to under-twos to be sequenced by quality and age in light of local shortages.

UK - Over 26,000 eligible children in Wales do not have access to childcare places in Wales, highlighting the challenge facing the Welsh Government as it looks to expand funded provision, with the current system providing spaces for only 65% of eligible children, new analysis finds.

The new analysis, from research and innovation foundation Nesta Cymru, comes on the back of a pledge to expand Welsh childcare provision. Childcare in Wales currently operates through two main government-funded schemes: the Childcare Offer for Wales, which provides up to 30 hours of combined early education and care for three- and four-year-olds of working parents, and Flying Start, which is expanding to offer 12.5 hours of funded care for all two-year olds as well as three-to-four-year-olds in certain postcode areas. These schemes are delivered across a network of registered daycare centres and childminders and the Welsh Government in June committed to an expansion of these schemes into a universal offer of 20 hours of funded childcare per week for all children aged nine months to four years.

However, Nesta’s analysis finds current provision is not enough to help all families that should be able to get support. This gap could widen if universal expansion is extended to one-year-olds without action being taken to address issues of access and quality, potentially leaving over 45,000 eligible children without access to places.

The availability of childcare places is dependent on where families live, with stark regional differences affecting the overall number of eligible children without access. For example, while settings in Ynys Môn currently cover 96% of eligible children, availability drops to just 41% in Merthyr Tydfil. Five local authorities (Cardiff, Bridgend, Rhondda Cynon Taf, Swansea and Newport) account for around 50% of the national deficit in access to places. Children in the most deprived areas are also less likely to have access to a place, compared to those in the least deprived areas.

The report also identifies widespread challenges around the quality of childcare provision, with only 52% of settings meeting a benchmark for quality - scoring "good" or "excellent" across all four Care Inspectorate Wales (CIW) inspection domains including wellbeing and support - while 26% of places remain completely unrated. Leadership and management was the single biggest issue, accounting for 73% of settings that missed out on a top rating due to one underperforming domain. There are also disparities in the quality of care between the most and least deprived areas, with less availability of high-quality care where deprivation is higher.

Despite these barriers, Nesta’s modelling shows that transitioning to a universal offer for two-to-four-year-olds can make the system more efficient. Nesta’s analysis finds that removing restrictive Flying Start postcode boundaries and Childcare Offer eligibility criteria allows families to access underused places nearby, reducing the overall national deficit from 26,300 to 23,700 places.

Andy Regan, head of Nesta Cymru, said: "The Welsh Government’s universal childcare offer is an incredible opportunity for Wales. Done the right way, it could deliver high-quality early learning that gives young children the best possible start in life and take significant financial pressure off working parents.

"While our analysis shows that the current system is stretched, this shortfall can be successfully managed. Moving to a universal offer for two-to-four-year-olds first actually makes better use of existing places by removing artificial postcode barriers. By taking a phased approach - focusing first on upskilling nursery leaders, expanding physical capacity in high-demand urban areas, and maintaining high standards - Wales can build a sustainable childcare system that delivers for every family."

Nesta believes that if the rollout of the new childcare offer is delivered successfully, this could together help to narrow the outcome gap between children growing up in disadvantage and the national average.

Nesta recommends that the Welsh Government works directly with local councils to address regional capacity bottlenecks, expanding the funded childcare offer to under-twos only once quality and capacity thresholds are met with the current offer for two-to-four-year-olds. It also recommends the Welsh Government invests in targeted leadership training for childcare providers and target capital investment by a combination of local authority, deprivation and population density, rather than by local authority alone.

Notes to editors

1. Nesta Cymru’s report, Building a fairer start: an analysis of childcare provision and potential in Wales, is available here: https://www.nesta.org.uk/report/building-a-fairer-start-wales/
2. Nesta Cymru analysed data from Care Inspectorate Wales (CIW), the Office for National Statistics (ONS) and Children in Low-Income Families (CiLIF) statistics to model current childcare availability and standard quality ratings across all 22 Welsh local authorities.
3. For more information on the analysis or to speak to one of the experts involved, please contact Kieran Lowe, Senior Media Manager, on 020 7438 2576 or [email protected]. Spokespeople are available for broadcast interviews.

About Nesta

Nesta is a research and innovation foundation that designs, tests and scales solutions for the biggest challenges of our time.

Driven by a vision to improve the lives of millions of people, our focus up to 2030 is on three missions: breaking the link between family background and life chances, halving obesity and cutting household carbon emissions.

We work with partners to develop high-potential solutions and test them as they evolve, drawing on expertise in qualitative and quantitative research, data science, behavioural science and design.

Once confident in the effectiveness of a solution, we take it to scale. We create national policy proposals, develop consumer-facing products and services, build and spin out commercial ventures and harness the power of the arts.

We work with two specialised units: BIT applies a deep understanding of human behaviour to help clients achieve their goals. Challenge Works designs and runs challenge prizes to spark innovation in science, technology and society. Find out more at nesta.org.uk