A newly-published evaluation of the Department for Education’s (DfE) Early Years Financial Incentives pilot scheme has found that it failed to meet its objectives.
The pilot scheme, launched in January 2024 and concluding in March 2025, was introduced to support recruitment efforts of early years staff to aid the rollout of the expanded entitlement offers. It included a £1,000 recruitment bonus for eligible new and returning early years staff across 40 local authorities with high levels of deprivation or low workforce sufficiency in early years.
However, the evaluation found that the scheme had “no measurable increase in … the number of applicants per vacancy”.
It also identified the following:
- A limited effectiveness in attracting suitable candidates, with providers stating that “the financial incentives did not address the underlying causes of persistent vacancies”, such as a lack of qualified, experienced and motivated candidates.
- Misalignment between the pilot aims – which targeted individuals new to the early years sector – and provider needs, with providers indicating that “it was more economically viable to employ fewer qualified staff […] rather than invest time and resources in mentoring new, unqualified recruits”.
- Financial incentives had little influence on applicant decisions, with survey data demonstrating that most new recruits were unaware of the financial incentives when they applied for a role.
A further rollout of financial incentives began in July 2025, with the aim of resolving issues raised in this evaluation.
Commenting, Neil Leitch, CEO of the Early Years Alliance, said: “Given that the incentive scheme did absolutely nothing to address the fundamental issues facing the early years workforce – not least the consistently low rates of pay that have resulted from chronic government underfunding – it is unsurprising that this policy has had such limited success in improving recruitment rates in the sector.
“What’s more, it is telling that the modest increase in applications as a result of the scheme came from candidates who ‘lacked the qualifications, soft skills, or interest in the work necessary for early years roles’. Being an early educator is a vocation, and until it is treated as such, ad hoc quick fixes like incentive schemes will do little, if anything, to tackle the sector’s long-running staffing issues.
“In light of publication of the Best Start in Life strategy, we hope that the government is now ready and willing to move away from ad hoc, short-term measures and start thinking about how best to make a career in the early years sustainable in the long run.”
