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Government plans to extend the three- and four-year-old free entitlement for working families could help to “nationalise childcare”, a thinktank has claimed.

Time to Care, a report on the Childcare Bill published by Policy Exchange, suggests that the impending free entitlement extension to 30 hours “would effectively make government the monopoly buyer and funder of […] childcare for working families in this country”.

According to author Jonathan Simons, the new offer could allow for a new system where “all provision is delivered by a range or independent providers both large and small [and] parents would have free choice of where to go, via a voucher system that cover[s] their costs”, adding that “the voucher would be funded and paid for by government, with an element of top up funding allowed if needed”.

However, Neil Leitch, chief executive of the Pre-school Learning ��������, argues that the report fails to recognise that the primary issue with the current model of childcare in England is that it is significantly underfunded.

He said: “A parental voucher system ‘funded and paid for by government’ may sound simple in theory, but in reality, government funding has not covered the cost of delivering quality early years care and education for many years now. Any new childcare model that does not recognise this is doomed to fail from the start.”

He also criticised the report’s suggestion that the 30 hours offer will act as a “significant driver of efficiency because it will require participating settings to configure childcare for that hourly rate, with little opportunity to cross subsidise”, saying: “�������� are already incredibly efficient - that is why, despite chronic underfunding, the vast majority are rated ‘good’ or ‘outstanding’ and take-up for the three- and four-year-old offer remains high. The fact is, however, that the childcare system has historically survived on a combination of cross-subsidies and the good will of providers, neither of which can be relied on in the long term.”