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Concerns that the government will ‘significantly underfund’ the 30 hours free entitlement scheme have been highlighted by new research.

, states that this could result in ‘a poorly-delivered policy with negative outcomes for families and for the sustainability of the sector’.

The two key concerns outlined by the report are underfunding and ‘loosening regulations’, which is defined as the concern that the government will loosen child-to-adult ratios in settings.

The IPPR calculates the cost of extending the free entitlement offer from 15 hours to 30 at £1.6 billion per year, compared to the government’s costing of £365 million in the first year.

The think tank claims that if the rates the government pays to providers are set too low, ‘it will result in falling quality, poorer outcomes for children and less choice for parents as the market shrinks’.

The report also makes recommendations to the government as to ‘the best and most strategic way to invest in childcare’.

These include targeting the free entitlement scheme at two-year-olds by ‘universalising’ the current 15-hour offer to all children of this age group, and extending the free offer from 38 weeks to 48 weeks of the year in order to cover holiday care.

The briefing document states: ‘As a step towards full holiday coverage, the government could provide an additional 10 weeks for the 40% most disadvantaged two- to four-year-olds.’

The findings of the IPPR research have been welcomed by the childcare sector, including �������� chief executive Neil Leitch.

He said the report “echoes many of the concerns that the �������� has previously raised” and that the 30 hours offer has been “significantly undercosted”.

He added: “We also share the report’s concerns about the impact that this policy may have on quality.

“Given the level of underfunding, it is likely that changes to childcare regulations would be necessary to enable government to deliver the promised hours at a much cheaper cost.”