Has take-up of early education really fallen amongst disadvantaged two-year-olds?

By Claire Crawford

Last week the Department for Education published the first comprehensive statistics on the take-up of the new early education entitlements for 0-2-year-olds in working families. As of January 2025, around 42% of children in this age group were using at least some hours of government-funded early education, with take-up lowest amongst 9-11-month-olds (20%) and highest amongst 2-year-olds (55%). This may be good for the lives of these children and their families, but the working families entitlement is arguably not reaching those most in need of support. For the government to achieve its Plan for Change target of 75% of children being ‘school ready’ by age 5 by 2028, it may need to provide more support to children in non-working or very low income working families who are not eligible for the working families entitlement.

One programme that does benefit these relatively more disadvantaged children is an entitlement to 15 hours of government-funded early education per week for disadvantaged 2-year-olds – now rebranded the ‘Families Receiving Additional Support’ (FRAS) entitlement. But one of the concerns raised by us and other experts was that children eligible for the FRAS entitlement might miss out as a result of the expansion entitlements for working families. This could happen via a number of routes. Families could be confused by the strong messaging around the working families entitlement and mistakenly believe that they are not eligible for any government-funded early education. Higher demand for childcare places from families eligible for the working families entitlement could also have crowded out these children, whose families may be less likely to pay for additional hours.

The statistics published last week showed a substantial drop in the percentage of eligible 2-year-olds taking up the FRAS entitlement, falling from 75% in 2024 to 65% in 2025. But – and it is a big but – the Department urged caution in comparing the figures across these two years, as some children eligible for the FRAS entitlement are also eligible for the working families entitlement. Despite the statutory guidance provided to local authorities (LAs) that any children eligible for both should be recorded as being entitled for the FRAS entitlement rather than the working families entitlement, the Department had reason to believe that not all LAs had done this consistently.

What are the consequences of this uncertainty? It means we basically don’t know whether the fall in take-up means that some disadvantaged children have missed out. We don’t know how much action might be needed to correct for any fall. And if the working families entitlement was even partially responsible for this fall, then we might be especially concerned about will happen over the coming year, given that any negative effects may worsen once 0-2-year-olds in working families are entitled to double the number of hours as they are now (rising to 30 hours per week, from 15) in September.

So, with thanks to my colleague Oliver Cassagneau-Francis for assistance, we set out to see if we could work out whether there had been a genuine fall in take-up, or whether the fall was all down to misclassification. Using figures from the Institute for Fiscal Studies, around 18% of 2-year-olds eligible for the FRAS entitlement are also likely to be eligible for the working families entitlement (see below for all the gory details).

Using the estimated number of children eligible for the FRAS entitlement shared by DfE last week (just under 146,000), this would mean that just under 27,000 children were eligible for both entitlements this year. The actual fall in the number of children taking up the FRAS entitlement between 2024 and 2025 was just under 21,000 children. We can chalk up about a third of this to declining eligibility (see below). Of the remaining 14,000 children, how many are still using early education and how many are potentially missing out? Given that 27,000 children are potentially eligible for both entitlements, if just over half of these 27,000 children had been mis-recorded, that would be enough to explain the entire decline in take-up.

Is this plausible? It’s hard to know based on what the Department has said, but it’s certainly possible. So, is this the end of the story? Not quite. One of the great things DfE does when publishing these kinds of statistics is share the data underlying the headlines, including data at local authority level. We’ve used this data to good effect in previous research, funded by the Nuffield Foundation, to identify LAs who were ‘out-performing’ the characteristics of their local populations and achieving higher take-up rates than expected amongst disadvantaged 2-year-olds, to try to characterise the ingredients of their success. Here, we wanted to see how much the decline in take-up differed across LAs. Was it spread fairly evenly across the country, or was there variation? Was the extent of the decline correlated with any other characteristics of these LAs that might suggest a genuine fall rather than misclassification?

Perhaps an even more compelling part of the story is the correlation between the magnitude of these declines in take-up and LA characteristics. LAs that have experienced larger falls in take-up relative to what might have been expected tend to have higher female employment rates and lower unemployment rates, and to have a higher proportion of validated codes for the working families entitlement, perhaps indicating greater demand from children in these families and hence more competition for places. Moreover, these relationships hold over and above the size of the LA, so are not just driven by what’s happening in big cities.

While not conclusive, this suggests to us that the decline in take-up of the FRAS entitlement may not be all about misclassification. Yes, it is possible that misclassification could be higher in areas with these other characteristics, but is there a good reason to expect it to be so? A more plausible reason, based on our findings, could be that some disadvantaged children may be being squeezed out by higher demand for formal early education created by the working families entitlement. Given that take-up of the FRAS entitlement has never been higher than 75% and that there were large variations in take-up across LAs well before this latest round of data, we certainly wouldn’t want the government  to bank on misclassification as the sole reason for the drop in take-up of the FRAS entitlement, particularly as they have the Plan for Change target to think about. We would love to see action being taken now to remove barriers to take-up, including but not limited to those relating to the working families entitlement. This will help to ensure that all disadvantaged 2-year-olds have the opportunity to take advantage of government-funded early education and contribute to the success of the government’s Best Start in Life strategy.

All the gory methodological details

We started from an article from the Institute for Fiscal Studies which tried to estimate the extent of overlap in eligibility between the two entitlements. Their figures suggested that around 18% of 2-year-olds eligible for the FRAS entitlement might also be eligible for the working families entitlement.

(Their Figure 1 shows that 21% of the poorest quintile (fifth) of working families are eligible for both the working families and FRAS entitlements, in addition to 8% of the second poorest quintile and 2% of the middle-income quintile. Given that 85% of families with 2-year-olds are working, this means that just over 5% (((0.21*0.2)+(0.08*0.2)+(0.02*0.2))*0.85=0.0527) of the cohort are estimated to be eligible for both entitlements. Meanwhile, just under 11% (((0.49*0.2)+(0.11*0.2)+(0.03*0.2))*0.85=0.1071) of the cohort from working families are eligible for the FRAS entitlement only, as well as just under 13% (85% of the 15%=0.1275) of the cohort from non-working families. Altogether, this means that almost 30% of families of 2-year-olds (0.0527+0.1071+0.1275=.2873) are estimated to be eligible for the FRAS entitlement and 5% are estimated to be eligible for both the FRAS entitlement and the working families entitlement, meaning that around 18% (0.0527/0.2873 = 0.183) of those eligible for the FRAS entitlement are potentially eligible for the working families entitlement.)

Using the estimated number of children eligible for the FRAS entitlement provided by DfE last week (145,824) – and assuming that the degree of overlap, which was estimated on slightly older cohorts, is still approximately correct – this would mean that 26,686 (0.183*145,824) children were eligible for both entitlements this year.

The actual fall in the number of children taking up (registered for) the FRAS entitlement between 2024 and 2025 was 20,821 (115,852-95,031) children. Some of this decline would have happened anyway, both because the birth rate is declining, and hence the population of 2-year-olds is falling over time, and because the proportion of 2-year-olds who are eligible for the FRAS entitlement is also falling. The decline in eligibility between 2024 and 2025 – which reflects both these elements – was just under 6% ((154,957-145,824))/154,957=0.059). If take-up (registration) had fallen in line with this decline in eligibility, then we might have expected 6,835 (0.059*115,852, which is the number of 2-year-olds registered for the FRAS entitlement in 2024) fewer 2-year-olds to be using government funded early education in 2025 than 2024, even if nothing else had changed.

If we subtract 6,835 from the observed decline of 20,821 children, that leaves 13,986 children. The question is: how likely is it that these children were still using early education and had merely been incorrectly classified as taking up the working families entitlement rather than the FRAS entitlement, and how many were genuinely missing, i.e. not taking up government-funded early education at all?