Childcare's "middle tier": Thinking on the future local authority role
Rising to the expanded offer
Childcare in England is becoming a publicly controlled market. Under the new expansion of free places to working families of younger children, the proportion of places which are publicly funded should rise from less than half to around 80%. Assuming the current delivery model is maintained, the scale of local authorities’ role will grow exponentially. They will become responsible for distributing more funds to more providers, supporting more parents to take up the offer and ensuring there are more of the right places to meet new demand. As National Audit Office have pointed out, they will also be required to navigate a wide range of delivery risks during roll-out, including to the quality of provision.
This huge extension of responsibility takes place against a backdrop of some scepticism over local authorities’ capacity to oversee, support and manage local childcare markets. As I’ve written about previously, local authority powers and funding have both dwindled significantly in this area since their early 2000s heyday. Few councils still have large early years teams providing strategic leadership and oversight, and in some the “team” now amounts to a single, relatively junior, official. It is not uncommon to hear private providers complain that local authorities would be better off out of the picture entirely, with funds passed to them directly from central government. Some feel that council employees do not understand the business of childcare, and that where they succeed in developing strong sustainable provision this is in spite of (not because of) local authority support.
Meanwhile, policy thinkers who welcome the vision of childcare as a “new frontier of the welfare state” also tend to lack confidence in local authorities as the mechanism for making that a reality. They question whether councils have, or could ever have, the capacity or financial nous to provide robust oversight of this complex and turbulent mixed market. Concerns have grown given the recent rise in closures and sharkish growth by private equity backed chains whose governance is less transparent and who typically avoid much local authority interaction. Influential thinktanks have thus argued for a ceding of some local authority market management responsibilities to regional bodies with greater combined purchasing power, or for giving Ofsted stronger powers of oversight of provider finances whilst strengthening local authorities’ market shaping role with additional ring-fenced resource. They have also argued for local authorities to be allowed legally to step back into establishing provision themselves.
Time for a rethink? Views from the frontline
So, is it time we re-imagined the “middle tier” for childcare? What should the role of local authorities be as state-funded provision grows? And what kind of aspirations should local authorities have for their own early years services?
With these questions in mind, in February we put an open call out to those involved in childcare delivery to share their views in a brief online survey. Our intention was to quickly harness a range of perspectives to guide Isos thinking and help shape the questions we pose within our early years projects – which span national policy thinking to local implementation. It was a short, informal survey with 10 multiple choice and two open text questions. We received 51 complete responses over February and March 2024. Broadly half were from local authority early years teams (mostly London I suspect), and half from providers. The providers who answered tended to be from small local private nurseries, but there were also four social enterprise chains, three larger private chains and a couple of childminders. We had no responses from primary schools – although two Maintained Nursery Schools replied.
Both providers and those working in councils overwhelmingly believe that there is value to local authorities being involved in childcare. The vast majority of respondents (44 out of 50) either disagreed or strongly disagreed with the statement: “Local authorities should not be involved in childcare”. There was wide agreement that the expansion will require more central resource, although views from providers were far more divided on whether the amount of funding they hold back should be protected at the existing level (perhaps to be expected in the context of sustainability concerns and scarce resource). Both providers and local authorities also tended to agree they would like to see greater consistency of approach and standards of support. As one local authority put it: “Each LA is configured differently and most of that is historical rather than strategic”. The result is perceived to be unfair and unhelpful for everyone, adding to the administrative burden.
When it comes to the actual role that local authorities should play in the future, there are some areas of disconnect between what LAs think the system needs from them, and what providers see their potential value-add to be. For example, when the survey asked participants to share ideas for “any support you would like local authorities to provide more of?” the most common area highlighted by local authorities was more practical business advice support. Strikingly, not one of the responding providers mentioned this in their response. Whilst several expressed a wish to see funding distributed in a way that better supported their businesses (e.g. earlier funding rate decisions), more business advice was not something they craved from councils. Perhaps they do not see them as the best source of advice on this – there are certainly a range of other options available to those who know where to look.
Answers on tricky questions of whether local authorities require stronger powers to help them manage local markets, or whether indeed this should be their role, were very split across the board. Local authorities were slightly likely to agree that they “should be given powers to stop new providers without a proven track record from setting up where this is undercutting well-established, local provision” but the view was not unanimous and providers were entirely divided. There were also very mixed views on whether: “responsibility for commissioning provision and market oversight would set better at a regional level or by groups of local authorities working together and pooling their budgets”. And no clear consensus on whether: “Local authorities should be given the abilities to commission childcare more like adult social care commissioning teams”, or whether “local authorities should be allowed to establish provision themselves”. Interestingly, if anything, local authority respondents are more sceptical than providers about the prospect of moving back into this terrain.
Where local authorities are uniquely placed
The strongest areas of agreement were around the future potential for local authorities’ to promote quality and better harness their unique position at the centre of communities and services. As one local authority respondent put it: “Early years settings need to be joined into the wider system”. When we asked for further reflections on the future role of local authorities, both providers and council employees put forward areas where they believed there was potential for local authorities to play a more proactive or connecting role. Their answers suggested a belief that doing this effectively could both support providers and unlock more responsive provision for families. The most prominent themes to emerge were:
Workforce recruitment and development – Several responses suggested that local authorities could address workforce challenges effectively across local areas in a way that no single provider is able to do alone. Respondents variously called for support with recruitment from colleges and apprenticeships, more training, comprehensive CPD programmes and bursaries for qualifications.
Equipping settings to cope with rising special needs – Across the board, a clear message was that local authorities could in future do more to support providers to cope with and respond to the rising number of children with emerging special educational needs. Providers wanting greater recognition and recompense for their work here was inevitably a common theme, but money was not the only item on their wish-lists. Several also wanted local authorities to play a stronger role in enhancing specialist knowledge and skills to work with increasingly diverse needs, and support children waiting for specialist input. Local authorities made similar points.
Join-up with wider early support and prevention services - Respondents wanted to see local authorities help facilitate stronger connections with wider early intervention support services and professionals. Maintained Nursery School respondents in particular made the case for better join up with health – attached named professionals, jointly conducted assessments and training. Since this survey was conducted, new evidence on the impact of Sure Start local programmes has highlighted the impact of integrated services on children and families. We should consider how local authorities can promote this integration, working with existing childcare settings who are the daily frontline for most families.
Supporting and driving quality – Local authorities’ role in supporting quality was mentioned repeatedly. Some respondents harked back to the days where many local authorities were resourced to have advisors present in settings on a daily basis. One small local private provider called for “LA Advisors to be more present, to attend settings, to give advice. To bring back the RAG rating to help settings prepare for inspections and help staff get used to this happening”. Others, perhaps more mindful of financial constraints, argued for a different approach, whereby LAs “support settings to put any training and systems into practice without an on-site presence”.
Planning – A large majority of respondents supported the idea that “Local authorities should be given greater ability to incentivise providers, particularly to set up in areas of disadvantage or areas of greatest need”. A couple of responding providers made an explicit case for better join-up with Planning Services in order to helping good settings to expand, including where there are new housing developments – and clear frustration that this is not happening now.
A strength-based approach
This was just a small, informal survey and all of the messages here are tentative and deserve fuller exploration, but two insights stand out from this preliminary work:
First, it is striking that despite current imperfections in the system, there appears to be significant support for a local authority role in childcare’s future “middle tier”.
Second, in the context of a rapidly expanding publicly funded offer, are we sometimes too wrapped up in (albeit important) questions around local authorities’ role in market management and accountability? We also need to take a strengths-based approach: What are local authorities good at when they do have the capacity? Where do they hold unique perspective, knowledge and levers that could support valued settings? How can they help raise quality across the board, stitching childcare provision delivered by a range of providers more fully into integrated public services? These are all questions policy-makers have the opportunity to consider properly now that the free entitlement is being so radically expanded.
A slightly longer write-up of our survey is available on request.