Free nursery places for 3 year olds appears to have no impact - an example of Government Failure?

Reports out over the last couple of days suggest that government spending on free nursery places for 3 year olds since 1998 has not produced any valuable educational or economic outcome. The policy was introduced as part of a series of reforms introduced by Tony Blair when he came to power in 1997. The Blair Government saw it as a method of reducing the differentials between educational attainment of poorer and wealthier sections of society and promoting a speedier return to work for some mothers.Researchers studying the impact of the policy during the 2002 to 2007 time period, where spending on the policy amounted to more than £7bn found that the education received at age 3 had some impact on attainment at age 5 but any improvements were lost by age 11. The research suggested that the policy had only a minor impact on enabling more women to return to work earlier. Also, there is evidence that 5 out of 6 users of the free place would have gone to a paid-for equivalent at age 3 anyway.So, does this offer us a good example of government failure in economic and social policy?

Nicky King, of Radley College in Oxfordshire, uses the iCause acronym to remember how to analyse government failure. The letters stand for:

I – inadequate information

C – financial cost/opportunity cost

A – administrative errors

U – unintended consequences

S – self interest

E – (lack of) expertise

How does the free nursery place issue stack up to this analysis? You could argue that the policy implementation may well have been based upon inadequate information – perhaps from academic research that actually couldn’t prove the impact of the policy until it was actually in place. The policy sounds like it should work but was it something that a popular (in terms of votes) government would do to please the electorate (S – self interest). The unintended consequence is the fact that the vast majority of users of the free places would have paid for educating their 3 year old anyway increasing the burden on the government revenues. Of course, there is a significant opportunity cost here – the policy remains in place at a time when the government are cutting back on lots of other public services.

Nicky’s ‘What Went Wrong?’ activity is available as part of the Wow Economics CPD event and resource pack, with details available here.

Click on this link to see an article from the Telegraph about the free nursery place policy.