Good afternoon, 

I am writing on behalf of the Early Years Alliance, the largest early years membership organisation, to see if the Office for Statistics Regulation would be willing to look into claim made by the government that its proposal to relax ratios in early years settings in England for two-year-olds, could result in savings of 15% or £40 per week for parents for two-year-olds.

This claim is made here: 

It will propose changing staff-to-child ratios from 1:4 to 1:5 for 2-year-olds, giving providers more flexibility in how they run their businesses while maintaining safety and quality of care. Childcare for children aged 0 to 2 is the most expensive for providers to deliver, largely given the need for higher supervision levels. 

This could potentially eventually reduce the cost of this form of childcare by up to 15%, or up to £40 per week for a family paying £265 per week for care for their 2-year-old, if providers adopt the changes and pass all the savings on to parents.

This claim is based on the following calculation:

Staff costs account for 74% of overall costs in early years settings. Moving from a ratio for 1:4 to 1:5 for two-year-olds would cut staff costs by 20%. 20% x 74% = 15%. The average weekly cost of early years places is £265 and 15% of £265 is £40; therefore parents could save £40 per week.

However, this calculation was not included in any public announcements. 

 The calculation operates on the basis that all nurseries and pre-schools are currently working to a 1:4 ratio at all times, that they will all move to a 1:5 ratios at all times and that the entirety of any savings made would be passed onto parents in the form of lower fees. This is fundamentally flawed for a number of reasons: 

  • The DfE’s own figures (Childcare and early years providers survey: 2021, Main tables: survey of childcare and early years providers 2021, Table 28: Staff:child ratios for 2 year olds (group-based providers) show that as it stand, 22% of group settings (nurseries and pre-schools) in England work to a stricter ratio than 1:4 at the moment. 
  • For the government’s calculation to work, settings would have to only increase their child numbers in ‘ratio-sized amounts’ to move from a 1:4 to a 1:5 ratios. So, for example, if a setting had 5 members of staff and 20 children, they would have to take on 5 additional two-year-olds at once to move to a full 1:5 ratio. If they only e.g. took on 2 extra children (so 22 in total), this would be a ratio of 1:4.4, not 1:5.
  • The calculations incorrectly assume that all settings have the physical space to be able to substantially increase the number of children they care for and educate, within the current legal limits on floor space per child, which the government is not proposing to change. 
  • Former children and families minister Will Quince, who launched the consultation, has himself argued that there is no expectation that settings will move to a 1:5 ratio all the time and that the change is unlikely to impact largely on costs. In an interview with Sky News, he said: “The ratios change in and of itself is no silver bullet or panacea or magic bullet… it is not going to significantly change costs because what we don’t expect is setting to routinely or religiously go to 1:5. Most don’t currently go to 1:4.” This makes clear that the statistics published by the government on the potential savings resulting from ratio relaxation are not ones they themselves believe are in any way realistic or likely. 

While the announcement had the caveats that this saving would be “potentially eventually” made “if providers adopt the changes and pass all the savings on to parents”, these have been omitted for other follow-up references to the estimate. For example, Brendan Clarke-Smith, recently appointed as the new children and families minister, stated on his website that:

“This week we have announced plans to reduce the cost of childcare for parents, boosting the number of childminders and driving up the take up of childcare offers to help parents with rising costs. 

The announcement includes a package of measures to increase childcare support for parents – giving childminders more flexibility and launching a new consultation to look at increasing the number of children that can be looked after by each staff member in early years settings, which could reduce the cost of childcare by up to 15 per cent, or up to £40 per week. (” 

The qualifications of these being an ‘eventual saving’ only achieved if ‘providers adopt the changes and pass all the savings on to parents’ has been completely omitted. 

Similarly, this use of statistics has led to the following headlines:

As such, it is our view that the use of this statistic has been used is likely to leave a reasonable person believing something which the full statistical evidence would not support, hence our complaint. 

As such, we would be grateful if you would consider looking into this further. 

If you have any further questions, please don’t hesitate to get in touch.