Ministers said childcare providers will have more flexibility in how they run their businesses while maintaining safety and quality of care.
The Government has been accused of being “pathetic” and wasting time in relation to plans aimed at improving the cost, choice and availability of childcare.
A new consultation will look at increasing the number of children that can be looked after by each staff member in early years settings, with proposals to change staff-to-child ratios from 1:4 to 1:5 for two-year-olds.
Ministers say this will give providers more flexibility in how they run their businesses while maintaining safety and quality of care.
The Government said this could “potentially eventually” reduce the cost of this form of childcare by up to 15%, if providers adopt the changes and pass all the savings on to parents.
But a charity that is the largest early years membership organisation in England has criticised the plan.
Neil Leitch, CEO of the Early Years Alliance, said: “Given the scale of the challenges facing the early years at the moment, it is beyond frustrating that the Government is wasting its time consulting on relaxing ratios, rather than just admitting that if we want to have affordable, quality, sustainable care and early education in this country, we need to invest substantially more into the sector than we are doing at the moment.
“Our own research has clearly shown that the proposal to relax ratios for two-year-olds in nurseries and pre-schools from 1:4 to 1:5 will not only fail to lower the cost of early years places, but in any settings that do adopt the new ratios, will drive down quality and worsen the already catastrophic recruitment and retention crisis the sector is already experiencing.”
The Government said it will also support more people to become childminders, streamline the Ofsted registration process for providers and encourage the growth of Childminder Agencies.
The plans have also been dismissed by the country’s top trade union leader who said they “won’t help”.
TUC general secretary Frances O’Grady said: “High-quality affordable childcare should be available for all.
“But too many parents are spending a massive slice of their pay packets on rising childcare costs, while their wages stagnate.
“These proposals won’t help. Cutting staffing ratios will just put more pressure on underpaid and undervalued childcare workers.
“Instead of making policy on the hoof, ministers should listen to childcare workers.
“It’s time for a proper funding settlement for childcare that delivers high-quality care, keeps the costs down for families and guarantees decent pay and conditions for workers.”
Bridget Phillipson, Labour’s shadow education secretary, said: “This is a pathetic announcement that fails to deliver the ambition families need to tackle spiralling childcare costs.
“Tweaking ratios is not the answer parents want and not the answer children need. T
“The vast majority of providers have made clear this would make no difference to costs for parents.
“What’s more, parents have said the current system of tax-free childcare is too complex to use even once explained. The Government is out of ideas and failing children and families alike.”
Education Secretary Nadhim Zahawi said: “Every child deserves a great start in life and that means giving families the support they need.
“Childcare is an integral part of our economy, and these reforms prove again that this Government is on the side of working families.
“I’m hugely grateful to the thousands of dedicated early years professionals who provide daily care and education to our youngest children, which is why I am determined to support them by giving them greater flexibility in how they run their services.
“This in turn will support thousands of families across the country, helping to develop children’s skills while also supporting parents into work.”