These are my thoughts on it. If someone is in work, they are paying tax, the nursery payments help pay nursery workers wages, they in turn pay tax, everyone is spending money.
Most people who have children still have more than one child. If someone stays off work til they don't need childcare any more (say until the youngest child is in 30 funded hours so 3) realistically that's likely to be at least 5 years off work.
After such a long time I think they are going to struggle finding a job, that is going to pay for wraparound care plus holiday care or be flexible enough for this not to be needed. You see it all the time on here, by then the fathers job is more important, the mother wants to work but is by this time very confident and struggles to find anything to fit in with family life hours that she wants
It's much easier to request part time or flexible hours from an existing job.
I wouldnt be as against paying women to stay at home for longer if it didnt affect their longer term employment but the fact it that it does.
If there was spare money in the pot for children I'd rather pay it towards promoting extended shared paternity pay so that dads were more involved in the basic care of their children and mums weren't so affected in the workplace.
I do get your point though, but overall I think keeping people in work is more beneficial for the economy and helps gender discrimination and pay gaps etc and also I think for the children, going to pre school helps prepare them for school