The National Audit Office’s new report, Improving educational outcomes for disadvantaged children, finds that in 2023-24, DfE allocated an estimated £9.2 billion to specifically focus on the educational attainment of disadvantaged children. However, disadvantaged children continued to perform less well than their peers across all areas and school phases.

Crucially for the early years sector, NAO also reported on how DfE provided significantly lower levels of funding to early years compared to school setting, finding that it has not done any analysis to explain funding differences (para 2.17, pg 34). The Comptroller and Audit General (C&AG) recommends that DfE should compare the value of interventions, such as investing more in early years compared with schools.

Early Education strongly welcomes this recommendation. We have long argued that disadvantage funding for the early years should at least equal the level provided to schools, both raising Early Years Pupil Premium to match Pupil Premium rates in primary schools, and increasing the disadvantage supplement in the Early Years National Funding Formula to a comparable rate to the additional needs factor for schools. If anything, the evidence suggests benefit in an enhanced rate of disadvantage funding for the early years (ideally defined as up to age 6 or 7) to ensure all children are achieving their potential from the start, as the evidence suggests that rather than being able to catch up later, it is more common to see the achievement gap widen.

NAO found that DfE has evidence to support some of its interventions and uses this to help schools and early years providers to make decisions. However, it has limited evidence on how well almost half of its estimated £9.2 billion spend supports disadvantaged children and does not have a full view of its interventions or milestones to assess progress and when more may need to be done. In his report, the C&AG concludes that this, and the lack of sustained progress reducing the disadvantage attainment gap since 2010/11, means that DfE cannot demonstrate it is achieving value for money.

Key findings include that :

• DfE does not bring together how much it spends to support the attainment of disadvantaged children. NAO estimate DfE spent around £9.2 billion in 2023-24 (Figure 15, pg 56). Half of this comprised the disadvantage elements of its core funding, primarily the national funding formula, and half was through more targeted interventions. Without a strategy or whole-system view, it is harder for DfE to understand how effectively interventions come together to achieve desired outcomes, where wider government support may be needed, and the impact of any trade-offs (para 1.15 to 1.17, pg 21). The C&AG recommends that DfE more clearly sets out how interventions come together, to help: understand how they individually and collectively support attainment; ensure that objectives are aligned; and recognise and manage any gaps and trade-offs.
• Recognising that factors outside school, such as the home learning environment, housing, and health and wellbeing, can impact a child’s attainment, NAO found that although DfE works across government it recognises it can do more (paras 1.18 to 1.20, pg 11). The C&AG recommends that DfE should set out how it will more effectively engage wider government to help develop a shared vision, robust joint risk assessment, clear responsibilities and an understanding of how respective departmental priorities could be better integrated.
• NAO found DfE has limited evidence on how well almost half of its £9.2 billion estimated spend supports disadvantaged children, which impacts its ability to make well-informed decisions (Figure 8, pg 31). The C&AG recommends that DfE should develop a research and evaluation strategy to build its evidence base.
• DfE gives providers flexibility to use their more than 90% of the £9.2 billion funding for disadvantaged children according to local circumstances, while providing support on how to do so. However, we found that DfE does not have a good understanding of how schools spend this funding and there are weaknesses in how schools are held to account for their spending (para 3.2, 3.3 and 3.6, pg 38).

Read the full report