This will cost central government another £6.3bn per year by 2028-29, more than the recent expansion in childcare entitlements. While this will take some financial pressures away from LAs, the OBR highlights concerns about how it will be funded within the current departmental spending plans.

⏭️ At @le-education.bsky.social we're investigating the impact of the minimum wage from a new angle: how it influences young people's choices to participate in education using Longitudinal Education Outcomes data. Findings are due to be published in early 2026 by the Low Pay Commission.

📰 Previous work we've done for the Low Pay Commission found that extending the NLW to 23/24yos in Apr 2021 (prev. those aged 25+) had few adverse impacts on young people's employment (londoneconomics.co.uk/blog/publica...) which provided support for the subsequent expansion to 21/22yos in Apr 2024.

… while continuing the offer of 30 hours for 3-/4-year-olds whose parents are working or in education. Our work provided guidance on how a phased expansion could work and how much it would cost, important as these plans would more than double spending on funded childcare. @le-education.bsky.social

The expanded entitlements largely focus on children whose parents are in work, but @suttontrust.bsky.social research has highlighted significant attainment gaps between disadvantaged children (often not eligible for entitlements) and their peers even when they start primary school.

This comes at a time when the sector needs to expand to meet additional demand for childcare as parents make use of the expanded entitlements. Recent increases in funding rates are helpful, but need to be put into the context of other cost pressures such as NIC and NLW increases.

Research page on the @nuffieldfoundation.org website can be found here: www.nuffieldfoundation.org/project/impa...

More information can be found on the @le-education.bsky.social website here: londoneconomics.co.uk/blog/publica...

We'll investigate whether the cost of childcare makes parents more reliant on staying near informal childcare sources such as grandparents, and assess the potential effectiveness of different childcare policies in addressing inequalities in the labour market.

▶️ For more highlights, read the summary here londoneconomics.co.uk/blog/publica... and follow @le-education.bsky.social for more childcare analysis, including our recent report published by the DfE on the state of providers' finances.

6️⃣👨‍👦‍👦Even with increases in demand, spare capacity remains similar in 2024 as it was in 2023, with between 14% and 21% of full day places being spare places across types of providers.