Media Release

Failure to invest in early years provision risks creating “lost generation” and hitting social mobility, warns senior Labour MP

Just £250 million - or 2.7% – of the extra £9bn funding which the government has set aside for early years provision during this Parliament will reach the most disadvantaged children, according to a new report by senior Labour MP Lucy Powell, and published today by the Social Market Foundation think tank.

The report draws on new analysis by the House of Commons Library and shows that of the £9.1bn new spending on childcare and early education during this Parliament, just £250 million, or 2.7%, is earmarked for spending on disadvantaged children. The trend throughout this Parliament is downwards, with the proportion falling from 4% in 2017/18 to just 2.4% by 2021/22.

The report also finds that:

  • 3 in 10 disadvantaged two year olds are still missing out on a free childcare place, despite new evidence to show that this can have a marked impact on development
  • Twice as many disadvantaged two year olds in the most deprived areas are missing out on a free childcare place compared with their disadvantaged peers in the most affluent areas
  • In 2016-17, an estimated £250 million, or 10 per-cent of the total spend on free hours for 2, 3 and 4 year olds was spent on poor quality childcare which was rated ‘Requires Improvement’ or ‘Inadequate’ by Ofsted

In the new report, Lucy Powell MP argues that skewing of resources away from social mobility objectives over the next five years risks creating a “lost generation”, who will be unable to ever catch up with their better-off peers.

Commenting ahead of the report launch, Lucy Powell MP said:

“Britain languishes at the bottom of the international league tables when it comes to using early year’s investment to tackle disadvantage.  Far from addressing this, over the next Parliament this is set to get significantly worse with just 2.7%of new money for early education and care dedicated to the most vulnerable children, and only a quarter benefiting the bottom half by income of families.

“This huge skewing of resources seriously risks a widening developmental gap between disadvantaged children and their better off peers at the age of five, creating a lost generation who will struggle to ever catch up.

“Early Years investment has always been a balance between supporting working families with childcare costs on the one hand and increasing life chances and social mobility for the disadvantaged on the other.  However, over the coming five years under this Government we are looking at a shocking new trend with the majority of the new £9.1billion going into the early years benefitting better off families with the most disadvantaged getting a tiny fraction of help.

“With the development gap at five still stubbornly wide, and one in three children not ready for school, rising to half for low income children, more of the investment in the early years needs to be ruthlessly and relentlessly focused on narrowing the gap otherwise we risk a lost generation of children.”

Social Market Foundation director James Kirkup said:

“Social mobility is about a market: the market for labour. That market is probably the most important one of all, since it, more than any other, determines what we get in life.

“Poor social mobility is, in effect, a form of market failure because it indicates that participants in the market for labour are not competing equally – their outcomes are determined not by their efforts and talents but by factors over which they have no control.

“And that is something that I’d argue no-one in politics, whether they’re on the Right, on the Left, or in the sensible centre-ground in between, can tolerate.”




  • The report can be read here:
  • Early years investment is already more likely to benefit better-off families.
  • DfE survey data shows that higher income families are more likely to access free hours with a 14 point difference between lowest and highest income families. Higher income families will benefit more from the extension to 30 hours free childcare, with some low income families losing extra help they currently receive
  • Higher income families are by far and away the main beneficiaries of the new tax-free childcare support and Resolution Foundation analysis shows that higher income families will benefit significantly more under the new 30 hour childcare system


  • About the Social Market Foundation:

The Social Market Foundation (SMF) is an independent, non-partisan think tank. We believe that fair markets, complemented by open public services, increase prosperity and help people to live well. We conduct research and run events looking at a wide range of economic and social policy areas, focusing on economic prosperity, public services and consumer markets. The SMF is resolutely independent, and the range of backgrounds and opinions among our staff, trustees and advisory board reflects this.

  • About Lucy Powell

Lucy Powell is the Labour and Cooperative MP for Manchester Central. Lucy was the first female Labour MP to represent a Manchester constituency. Lucy was born and brought up in Manchester, where she attended Parrs Wood High School and Xaverian Sixth Form College, before going onto study Chemistry at Oxford University and King’s College London. Lucy has held various front bench positions including Shadow Minister for Childcare and Early Years, Shadow Minister for the Cabinet Office, and Shadow Secretary of State for Education. Lucy is currently a member of the Education Select Committee.

  • Interviews/media enquiries:

Please contact SMF communications manager Mercedes Broadbent on // 07425 609 148 // 020 7222 7060


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