The take-up of free early education and childcare places and the quality of childcare providers is lower in the most deprived areas of England, according to the National Audit Office (NAO). This risks increasing the development gap between disadvantaged children and their peers, and could have a negative impact on social mobility.

The Department for Education (DfE) funds three entitlements to free early education and childcare for pre-school children in England.1 By funding the entitlements, DfE aims to support children’s development and help parents manage childcare costs so that they can work. It also aims to close the development gap between disadvantaged children and their peers. In 2019, there was a 17 percentage points gap in the proportion of children achieving a good level of development between children in the 10% most and least deprived areas.

In 2019-20, DfE’s funding for the entitlements totalled £3.5 billion. Since 2016-17, the NAO estimates that total funding has increased by 24% in real terms due to the introduction of the extended entitlement for working parents of 3- and 4-year olds. However, funding for the disadvantage and universal entitlements has fallen by 4%. There is conflicting evidence on whether the DfE’s funding is sufficient to cover the costs of early years providers.

The NAO finds that the vast majority of eligible families are benefiting from the entitlements. Take-up of the universal entitlement of 15 hours per week for all 3- and 4-year olds is high, with 1.3 million children (93%) using the entitlement in January 2019. Take-up of the extended entitlement has increased since it was introduced in 2017, with nearly 330,000 children using the entitlement in January 2019.

However, the DfE has missed its aspiration for between 73% and 77% of eligible 2-year-olds to take up the disadvantage entitlement of 15 hours per week. In 2019, take-up nationally fell to 68%, and varied between 39% and 97% among different local authorities. Families in deprived areas are less likely than families in other areas to take up these free childcare places.

Barriers to making use of the entitlements particularly affect disadvantaged families. DfE’s 2019 parents’ survey found that 72% of respondents in the 20% most deprived areas were aware of the extended entitlement, compared with 91% in the least deprived areas. While the entitlements guarantee a number of hours of free childcare, another DfE survey in 2018 found that 74% of entitlement-funded early years providers made additional charges, such as for meals or certain activities. DfE has trialled some different ways of improving take-up among disadvantaged families and local authorities also take action, but there is no robust evidence on what works locally.

Local authorities are legally required to ensure there are enough childcare places in their area. In 2019, the charity Coram Family and Childcare found that 63% of local authorities reported there were enough childcare places for the disadvantage entitlement. Local authorities have a small amount of flexibility to use funding to incentivise providers to meet local needs, such as expanding provision for disadvantaged families.2 However, few local authorities chose to make full use of this flexibility.

Ofsted graded 94% of entitlement-funded providers as 'good' or 'outstanding' in January 2019, up from 85% four years earlier. However, deprived areas have fewer ‘outstanding’ providers (18% of providers, compared with 27% in the least deprived areas) and more providers graded as 'requires improvement' or 'inadequate' (10% compared with 4%). At January 2019, 5,400 children taking up the disadvantage entitlement and 103,600 children taking up the universal entitlement were at ‘requires improvement’ or ‘inadequate’ providers.

The NAO recommends that DfE should work with local authorities to develop a better understanding of the approaches that work best in increasing take-up among disadvantaged families and to assess the extent to which additional charges are a barrier to take-up. The NAO also recommends that DfE should make better use of available data to investigate the geographic variations in take-up of the entitlements and the availability and quality of early years provision.

Gareth Davies, the head of the NAO, said today:  

“Families with young children across the country are benefiting from their entitlement to free early education and childcare places, which aim to prepare children for school and improve their life chances.

“However, if these entitlements are to help level the playing field, it is essential that more disadvantaged children benefit from high-quality childcare. DfE should do more to ensure that all disadvantaged families are aware of the free childcare on offer and are able to access it.”

Key facts


the Department for Education's funding for its early years entitlements in 2019-20


children taking up the entitlements at January 2019


providers receiving entitlement funding at January 2019


proportion of eligible 2-year-olds who took up the disadvantage entitlement in 2019

39% to 97%

variation between local authorities in the proportion of eligible 2-year-olds who took up the disadvantage entitlement in 2019


proportion of 3- and 4-year-olds who took up the universal entitlement in 2019

17 percentage points

gap between the proportion of children achieving a good level of development in the 10% most and least deprived areas in 2019


proportion of providers graded as requires improvement or inadequate by Ofsted in the 20% most deprived areas at January 2019, compared with 4% in the least deprived areas


proportion of local authorities with enough places in their area for the disadvantage entitlement, according to Coram Family and Childcare's 2019 childcare survey


estimated real-terms change in the average hourly rate local authorities paid to providers for the disadvantage entitlement between 2016-17 and 2019-20

The three entitlements that DfE funds are: the disadvantage entitlement of 15 hours per week for disadvantaged 2-year-olds; the universal entitlement of 15 hours per week for all 3- and 4-year olds; and the extended entitlement of an additional 15 hours per week for 3- and 4-year-olds with eligible working parents.

Local authorities can use up to 10% of entitlement funding from the DfE as ‘supplements’ to support providers to meet local needs. However, local authorities allocated 4.3% of their funding to supplements on average in 2019-20, ranging widely from less than 0.1% to the full 10%. All local authorities must have a supplement specifically to support provision for deprived families; on average, they used 3.0% of funding for this purpose.


You may also be interested in these articles:

Register, Login or Login with your Social Media account:


Advertiser Skyscrapers

Video Advert

Newsroom Activity

Dyspraxia Lambeth had a status update on Twitter 2 days ago

@ERSA_CEO @apprenticelsbu @Edu4sj_lsbu @milton_damian @QLMentoring @EdDavie @NancyDoylePsych @HWLambeth Fears ‘lost…
View Original Tweet

Latest Education News

Further Education News

The FE News Channel gives you the latest education news and updates on emerging education strategies and the #FutureofEducation and the #FutureofWork.

Providing trustworthy and positive Further Education news and views since 2003, we are a digital news channel with a mixture of written word articles, podcasts and videos. Our specialisation is providing you with a mixture of the latest education news, our stance is always positive, sector building and sharing different perspectives and views from thought leaders, to provide you with a think tank of new ideas and solutions to bring the education sector together and come up with new innovative solutions and ideas.

FE News publish exclusive peer to peer thought leadership articles from our feature writers, as well as user generated content across our network of over 3000 Newsrooms, offering multiple sources of the latest education news across the Education and Employability sectors.

FE News also broadcast live events, podcasts with leading experts and thought leaders, webinars, video interviews and Further Education news bulletins so you receive the latest developments in Skills News and across the Apprenticeship, Further Education and Employability sectors.

Every week FE News has over 200 articles and new pieces of content per week. We are a news channel providing the latest Further Education News, giving insight from multiple sources on the latest education policy developments, latest strategies, through to our thought leaders who provide blue sky thinking strategy, best practice and innovation to help look into the future developments for education and the future of work.

In May 2020, FE News had over 120,000 unique visitors according to Google Analytics and over 200 new pieces of news content every week, from thought leadership articles, to the latest education news via written word, podcasts, video to press releases from across the sector.

We thought it would be helpful to explain how we tier our latest education news content and how you can get involved and understand how you can read the latest daily Further Education news and how we structure our FE Week of content:

Main Features

Our main features are exclusive and are thought leadership articles and blue sky thinking with experts writing peer to peer news articles about the future of education and the future of work. The focus is solution led thought leadership, sharing best practice, innovation and emerging strategy. These are often articles about the future of education and the future of work, they often then create future education news articles. We limit our main features to a maximum of 20 per week, as they are often about new concepts and new thought processes. Our main features are also exclusive articles responding to the latest education news, maybe an insight from an expert into a policy announcement or response to an education think tank report or a white paper.

FE Voices

FE Voices was originally set up as a section on FE News to give a voice back to the sector. As we now have over 3,000 newsrooms and contributors, FE Voices are usually thought leadership articles, they don’t necessarily have to be exclusive, but usually are, they are slightly shorter than Main Features. FE Voices can include more mixed media with the Further Education News articles, such as embedded podcasts and videos. Our sector response articles asking for different comments and opinions to education policy announcements or responding to a report of white paper are usually held in the FE Voices section. If we have a live podcast in an evening or a radio show such as SkillsWorldLive radio show, the next morning we place the FE podcast recording in the FE Voices section.

Sector News

In sector news we have a blend of content from Press Releases, education resources, reports, education research, white papers from a range of contributors. We have a lot of positive education news articles from colleges, awarding organisations and Apprenticeship Training Providers, press releases from DfE to Think Tanks giving the overview of a report, through to helpful resources to help you with delivering education strategies to your learners and students.


We have a range of education podcasts on FE News, from hour long full production FE podcasts such as SkillsWorldLive in conjunction with the Federation of Awarding Bodies, to weekly podcasts from experts and thought leaders, providing advice and guidance to leaders. FE News also record podcasts at conferences and events, giving you one on one podcasts with education and skills experts on the latest strategies and developments.

We have over 150 education podcasts on FE News, ranging from EdTech podcasts with experts discussing Education 4.0 and how technology is complimenting and transforming education, to podcasts with experts discussing education research, the future of work, how to develop skills systems for jobs of the future to interviews with the Apprenticeship and Skills Minister.

We record our own exclusive FE News podcasts, work in conjunction with sector partners such as FAB to create weekly podcasts and daily education podcasts, through to working with sector leaders creating exclusive education news podcasts.

Education Video Interviews

FE News have over 700 FE Video interviews and have been recording education video interviews with experts for over 12 years. These are usually vox pop video interviews with experts across education and work, discussing blue sky thinking ideas and views about the future of education and work.


FE News has a free events calendar to check out the latest conferences, webinars and events to keep up to date with the latest education news and strategies.

FE Newsrooms

The FE Newsroom is home to your content if you are a FE News contributor. It also help the audience develop relationship with either you as an individual or your organisation as they can click through and ‘box set’ consume all of your previous thought leadership articles, latest education news press releases, videos and education podcasts.

Do you want to contribute, share your ideas or vision or share a press release?

If you want to write a thought leadership article, share your ideas and vision for the future of education or the future of work, write a press release sharing the latest education news or contribute to a podcast, first of all you need to set up a FE Newsroom login (which is free): once the team have approved your newsroom (all content, newsrooms are all approved by a member of the FE News team- no robots are used in this process!), you can then start adding content (again all articles, videos and podcasts are all approved by the FE News editorial team before they go live on FE News). As all newsrooms and content are approved by the FE News team, there will be a slight delay on the team being able to review and approve content.

 RSS IconRSS Feed Selection Page