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The Parliamentary Under-Secretary of State, Department for Education (Lord Nash) (Con)
My Lords, I am delighted to be opening the Second Reading debate of the Childcare Bill. I welcome the support for the aims of this legislation and the level of interest and engagement from noble Lords. There is tremendous expertise and experience in this House on these matters. Last night, my honourable friend the Minister for Childcare and I were pleased to have the opportunity to discuss these issues with members of the Select Committee on Affordable Childcare, which has done such important work in this area. I pay tribute to that work and the leadership of the noble Lord, Lord Sutherland, in particular.
The Government’s long-term economic plan is focused on ensuring that working people have a chance to get on, offering them security and opportunity at every stage of their lives. We know that, for many families with young children, childcare is not an issue—it is the issue. Many parents want to go back to work or work more hours, but find the costs of childcare unaffordable. The Government want to reward hard-working families by reducing their childcare bill.
As the Family and Childcare Trust has said:
“The Childcare Bill is great news for working parents and the doubling of the hours of free childcare will make a really big difference to many families. We look forward to working with the Government on the development of the detail around the Bill”.
It is also pleasing to see the support for the Bill from parents. The National Day Nurseries Association’s chief executive, Purnima Tanuku, said that a poll of parents carried out by Netmums shows that the Government’s offer of more childcare is,
“wanted and needed and already eagerly anticipated”.
She said:
“The survey also suggests that reform will encourage more parents to work more hours, bringing the economic boost the Government wants. There could also be a knock-on effect that grandparents, freed up from childcare, may also look for more work”.
Access to childcare is not a luxury but is essential for families in Britain and it is a crucial investment in this country’s economic future. As Vicky Redwood, an economist at Capital Economics, said recently, the plan to double free childcare for three and four year-olds of working parents should help boost employment rates by enabling more parents, especially women, to return to work. She said:
“Fifteen hours is probably not really enough for someone to do even a decent part-time job, whereas 30 hours is, so it could have a disproportionate effect in supporting women who want to go back to work”.
Many in this House worked on the Childcare Act 2006. I pay tribute to the noble Baroness, Lady Hughes, and others in this place. It was game-changing in its time and the world has continued to change for parents and children. The employment rate has increased consistently for women with children aged under five. The recent Labour Force Survey shows that the long-term employment rate for this group has risen over the last two decades from 49% in 1996 to 61% in 2014.
Our business and our economy depend on working parents and those parents depend on access to safe, high-quality childcare. The Childcare and Early Years Survey of Parents tells us that 22% of working couples found it difficult or very difficult to pay for childcare; for lone working parents that rises even higher to 38%. The Government have responded to these challenges. We have made childcare more flexible and affordable so that pressure is taken off household budgets, helping families to be financially secure and able to plan for the future.
In the previous Parliament we increased the free entitlement for three and four year-olds from 12.5 hours a week to 15 hours a week. Take-up of this offer is consistently more than 95%. We introduced a new free entitlement for the 40% most disadvantaged two year-olds and we legislated for tax-free childcare, which will save up to 1.8 million families up to £2,000 per child on their annual childcare bill. We are also introducing universal credit, which includes an element to support parents with their childcare costs, even if they work only a few hours a week. On top of this, we introduced a new entitlement for mothers and fathers to share parental leave.
The Government already invest around £5 billion per annum to support parents with childcare. With this new entitlement working families will receive more childcare support than ever before, creating a saving for families of more than £2,500 a year per child and making more high-quality provision available for parents. The Bill takes that support even further. The Government are delivering their commitment to supporting people at every stage of their lives and reducing the cost of childcare by providing an extra 15 hours of free childcare for hard-working families. I wish to reassure noble Lords that the new entitlement will not impact on parents’ ability to access the current 570 hours of free early education per year for all three and four year-olds. The Bill will guarantee working parents a total of 1,140 hours of free childcare per year.
The Bill places a duty on the Secretary of State to secure that childcare is available free of charge for qualifying children of working parents for, or for a period equivalent to, 30 hours in each of 38 weeks in any year. Parents will have the chance, and most importantly the choice, to work before they have to pay for childcare. I am sure noble Lords will be pleased to hear that I can confirm that the definition of “working” has been determined to include: working parents with children aged three and four; where parents are working part time or full time, the only requirement is that each parent is working the equivalent of eight hours per week, which is the same threshold as the tax-free childcare scheme; the entitlement can be accessed by parents who are employed or self-employed; and lone parents who are working to support their families.
The Government have also made clear their intention to roll out the entitlement in certain areas from September 2016 in advance of full implementation from 2017. The regulation-making powers in the Bill enable the Secretary of State to have sufficient flexibility to do so. Noble Lords have my reassurance that it is, of course, of paramount importance to the Government, as it is for parents, that the additional hours are delivered in safe and secure settings. We have improved early years qualifications and encouraged high-quality entrants to the profession, and it is encouraging to see that in the recent DfE Childcare and Early Years Providers Survey, between 2008 and 2013 the proportion of full daycare staff with at least a level 3 qualification grew from 75% to 87%. By improving the quality of those entering the workforce, parents can have confidence in the people supporting the learning of our youngest children.
The quality and affordability of childcare has been of great interest to this House, notably the work of the Select Committee on Affordable Childcare, and I was delighted to discuss this with members of that committee last night and the Minister for Childcare, Sam Gyimah. In addition to increasing the available hours of free childcare, we recognise that it is crucial that parents are able to easily access information about childcare and other services in their area. We want to ensure that parents are able to access such information through a range of sources and this is why, through the Bill, we will require local authorities to publish information which will support parents to make informed choices about childcare. Let me reassure noble Lords that the childcare sector is healthy, vibrant and growing. Eighty-three per cent of providers are rated good or outstanding by Ofsted, up from 69% in 2009. There are around 230,000 more childcare places than in 2009—a 12% increase—and there has been a significant increase in the take-up of childcare provision in low and middle-income areas. The noble Baroness, Lady Jones, has previously quoted a figure of 40,000 fewer childcare places between 2009 and 2014. I would like to clarify that this figure excludes the growth of childcare provision in the maintained schools sector, which has contributed greatly to ensuring that parents have access to flexible, affordable and high-quality childcare.
Over the last five years we have worked closely with the profession to help raise its status, and as a result the number of staff has increased, they are better paid, and more providers are rated good or outstanding. However, we are not complacent. That is why we are committed to working to raise the status of the profession further and increase the average funding rate that providers receive—a move that has been welcomed by the providers. Noble Lords will understand that it is important that the hourly rate for the childcare entitlement strikes the right balance between being fair for providers as well as delivering value for money to the taxpayer. We are addressing the concern that has been highlighted by the sector and have already committed to increasing the average funding rates. To get this right, my honourable friend the Minister for Childcare is leading a review of the cost of providing childcare. I am delighted to confirm that, as he set out in the other place yesterday, this is already under way. It is extremely important that we get this review right and so we will appoint external experts to contribute to and validate the review. So that the views of providers and parents are reflected, we have issued a call for evidence which can be accessed via Directgov. The review will report in the autumn.
The system needs to work for parents. It is of the utmost importance that we take the time to listen to the views of parents and providers, and we will be consulting them about the features of a system which best meets their needs. The additional entitlement will be delivered in a way that is flexible, affordable and high quality for parents, and the Bill enables the Government to set out further details in secondary legislation once we have listened to parents and providers. I intend to share more details of that consultation with your Lordships in Committee.
I hope that the principles behind the Bill are ones that everyone in the House will support. The measures in the Bill will have a direct and significant impact on the lives of children and families across the country so it is right that it is subjected to the most thorough scrutiny and debate. I look forward to listening to the debate and I look forward to working with your Lordships on the Bill.
Lord Richard (Lab)
My Lords, before the noble Lord sits down, perhaps he can help me with a point that is slightly worrying me. According to Clause 1(2):
“‘Qualifying child of working parents’ means a young child who … is in England”.
According to Clause 4:
“This Act extends to England and Wales only”.
Does it extend to Wales? Is it the Government’s intention that the Act shall apply in Wales? I had thought it was a devolved matter.
Baroness Jones of Whitchurch (Lab)
My Lords, I thank the Minister for the very clear way in which he set out his aspirations for the Bill. They are aspirations we share, and we hope to work collaboratively as far as possible to make the offer of 30 hours’ free childcare for all working parents of three and four year-olds a reality. However, as the Minister knows, the devil is in the detail and, sadly, we are being massively constrained in our scrutiny role because of the lack of fairly crucial information today.
First, a great deal of excellent analysis has already been prepared for us in the form of the Lords Select Committee report, Affordable Childcare, which we debated just before the election but has yet to have a formal government response. That would have enabled us to have a better quality discussion today. Secondly, as the Minister said, the Government have launched a rather crucial funding review to ensure that providers can be properly recompensed for the free places they supply, and they have separately launched a consultation with parents and carers. The outcomes of both reviews are fundamental to the success of the scheme and yet, as far as we can see, they will not be available until the Bill has long left this House. Thirdly, as the Bill is constructed, it subsumes all the detail of the proposals into secondary legislation, which we have not yet seen, and it is not clear whether we are intended to see the draft regulations before we start to scrutinise the Bill in detail.
I am taking the Prime Minister and the Minister at face value when they say that they want this to be a flagship policy which transforms childcare provision and helps hundreds of thousands of parents back to work. Equally, I am sure they were committed to the previous policy of providing 15 hours’ free childcare. But as the Lords Select Committee report shows, there has been very little evaluation of the impact of that policy and whether it achieved its intended outcomes.
We do not have the previous evaluation, we do not have the funding formula and we do not have the draft regulations. This all begs the inevitable question of why the Bill is being rushed through, when a little bit more time and preparation might have delivered a popular and workable scheme. Unless the noble Lord is able to provide some reassurances on the availability of that documentation today, we believe there is a strong case for delaying the future stages of the Bill until the information is available and we are able to carry out our responsibilities effectively.
In the mean time, I would like to raise the following issues. First, I would like to clarify how much this policy is currently estimated to cost. I understand that a review is taking place but it would be helpful to know the baseline calculations. When the Children’s Minister gave evidence to the Lords Select Committee, he was asked about the prospect of increasing the free offer, which was then 15 hours, to 25 hours a week. He said:
“Going from something like 15 hours to 25 hours would cost an extra £1.5 billion at least”.
Meanwhile, the Minister stated in response to an Oral Question on 3 June that the new proposals for 30 hours are currently estimated to cost £350 million. Clearly, there is a huge disparity here, so can the noble Lord tell us who is right? Can he explain the basis of the calculation and the estimated take-up among working parents?
Secondly, there is concern about where the money will come from. Again, the noble Lord was quoted as saying that it would be paid for by,
“reducing the tax relief on pensions for those earning more than £150,000 a year”.—[Official Report, 3/6/15; col. 412.]
Can he confirm whether this is still the case, and what happens if the funding review makes it clear that childcare providers need to be paid more to keep the service afloat? Where will those additional funds come from? Can he reassure us that other children’s services budgets in the department will not be raided to fund the extra costs? Can he also reassure us that local authorities will not be expected to fund the increased provision without a commensurate increase in their dedicated school grant allocation?
Thirdly, even if an acceptable formula to fund the additional free hours can be found, it is doubtful whether the sector has the capacity or desire to expand its provision, particularly at short notice. The Children’s Minister admitted as much in his evidence. When asked about the private voluntary and independent sector, he said:
“I am not sure that providers necessarily want to deliver 25 hours of state-subsidised childcare, because it limits their ability to offer other childcare that may come to them at a higher rate, to be brutally honest”.
I suspect that this might be right. It is a real challenge for the success of the policy, so does the noble Lord agree with his colleague, the Children’s Minister, on this matter?
Meanwhile, we have to face the fact that capacity in the maintained sector is in a minority, and is dwindling. A recent report of the British Association for Early Childhood Education claimed that there are now 49 local authorities in England without a single maintained nursery school, and a recent FOI survey found that nearly half of councils said that they would not have enough places to meet the last government offer of places for disadvantaged two year-olds—let alone the new provision now being planned. We are all well aware that the most logical area for expansion, which would be the growth of nurseries attached to schools, will be considerably hampered by the pressure on accommodation in primary schools caused by the increase in school rolls. So can the Minister share his thinking on how the capacity can be expanded, both in the PVI and the public sectors?
Fourthly, we have debated many times in this Chamber the importance of quality early years provision for child development and children’s future achievement. The evidence is compelling and the arguments overwhelming; I do not need to repeat them today. However, there is a concern that this policy has moved too far away from a focus on child development and is targeted instead solely at getting parents back to work. Of course there is some crossover in these objectives but if we are serious about tackling the attainment gap, we should be concentrating on providing quality childcare at a younger age. We should also ensure that children in the most deprived communities receive the best childcare when, sadly, the opposite is currently the case. It would be helpful if the Minister indicated whether he shares the objective of getting the best quality provision to those in deprived communities, and what policies the Government are pursuing to achieve this.
Meanwhile, the need to improve the training and qualifications of nursery staff remains paramount. In replying to the debate before the Recess on the affordable childcare report the noble Baroness, Lady Garden, said that parts of the Nutbrown report into training were still “under review” by the Government. I would be grateful if the noble Lord updated us on how that implementation is going.
Finally, detailed questions remain on the definition of working parents and who will qualify for the additional hours. Does it have to be one working parent or two? What about lone parents, people in training or people actively seeking work who need time to job hunt? What about grandparents and carers? Can those working flexible or zero hours average out their employment history to qualify? What about parents of disabled children who need extra support? These are just some of the issues we want to explore in more detail as the Bill progresses through the Lords, and there is a strong sense of frustration among all those interested in this issue that we have so many unanswered questions at this stage. It feels like we are starting with a blank script when we want to debate a fully formed policy, and while we understand the need for the parents’ consultation, the funding review and a pilot scheme, we are not prepared to hand over the detail of the policy to a series of negative and affirmative resolutions which may or may not have the parliamentary scrutiny they deserve. I hope the noble Lord can clarify when the information we have requested will become available, and that he will consider postponing debate on the Bill if our legitimate request cannot be met. We want the policy to succeed and to play our part in shaping the details to make it a success. In this spirit, I look forward to working with the noble Lord on a much more detailed set of proposals in the weeks ahead.
Baroness Pinnock (LD)
My Lords, of course we very much welcome the basis of this Bill, which is the additional 15 hours a week of free childcare for three and four year-olds whose families are in work. However, as the noble Baroness has just said, the devil is very much in the detail of this offer. I have four broad areas of concern: funding—there must be sufficient funding allocated to cover the cost of a high quality offer; flexibility—to really help working families, there must be flexibility built in to the offer; focus—childcare provision must be primarily for the benefit of the child; and fairness—this provision must be of equal benefit to low-income and higher-income families. Our concerns are the four Fs—funding, flexibility, focus and fairness. I want to expand on each of these issues.
On funding, one of the key concerns is that the Government provide adequate levels of funding for the scheme. On this, sadly, the Bill is completely silent. However, we know that the manifesto commitment was for an additional £350 million. I hope that this is one manifesto pledge that will be broken. Even combined with the estimated lower demand for the tax-free childcare and a transfer of any of those savings, the scheme appears to be grossly underfunded. This potentially underfunded proposal is then subject to the unfair vagaries of the early years funding element of the local government grant. Consequently, some council areas will have the double hit of the combination of an inadequate funding package that is then unfairly divided. This leads to private providers making up for losses incurred on the free offer by charging highly inflated rates for hours outside of the scheme. One parent told me that he pays £8.36 an hour for these extra hours for a non-London nursery. The Government are undertaking a funding review which may report before the end of the year. However, that does not help us in our consideration of the Bill or, more to the point, the parents and children who will want to know what quality of childcare will be provided.
The second concern I have is flexibility. The needs of parents and carers who are working are many and varied. Many women, particularly, often have two, three or even four short-hour jobs in cleaning and catering. Their needs are often for childcare to meet early-morning shift working and for after-school cleaning jobs. Often jobs in this area of the labour market are unstable both in terms of hours worked and in length of contract, so having a flexible offer is vital for both the child and the parent. Then there is the constant pressure on parents to find childcare in the school holidays. This can be very expensive. One mother of three children has told me that it costs her £2,000 in childcare during the six-week holiday. Even with the tax-free childcare, her costs will be £1,600. I have asked parents to let me know their comments on the flexibility provided—or not provided—in the Bill. They have said that being able to spread the 30 hours per week over 52 weeks rather than the 38-week school year would be of enormous benefit. I urge the Minister to consider that proposal.
I have considerable concerns about the Bill’s focus, which seems to be on providing the means to encourage more women into the workforce. That in itself may be a laudable aim, but these are children’s lives we are dealing with and the primary focus of attention must be the impact on their lives, not just an economic argument about the labour market. I urge the Government to make adjustments to the Bill so that it becomes child centred. Making that change would change the thrust of the debate towards focusing on the quality and type of provision. We know that poor-quality childcare can actually damage a child’s development. An underfunded scheme may well result in lower quality, but the thrust of any childcare provision, especially that funded by the Government, must surely be to provide care of the highest quality. Focusing on the needs of children would force consideration of the effect of spending 30 hours in an institutional setting and thought about the potential benefits of childcare being shared between different providers. Wraparound care also needs to be thought through. A parent who may well need care from, say, 8 am until 6 pm will need more than provision that is just school based. Private providers are understandably reluctant to provide care just for an hour or so each side of the school day. It does not add up, for them, to a successful business model. I hope the Minister will be able to give us categoric assurances that the Bill will put the needs of the child first and foremost.
Finally, fairness needs to be at the heart of the Bill, and I am not convinced that it is: fairness to parents trying to juggle work and parental responsibilities, when they are in jobs that may last only a few months; fairness in defining the eligibility, so that parents in education or training also qualify; fairness to the child in ensuring that the free childcare is of a high quality; and fairness for children with disabilities and from dysfunctional families through actively encouraging their take-up of any offer which is adjusted to meet their specific needs. It is, therefore, only when we see the detailed regulation and, importantly, the funding package that we will be able to be certain that this measure will be positive both for children and their carers.
Lord Sutherland of Houndwood (CB)
My Lords, many of us are very pleased to see the Minister back in his place. Following a time of new Governments and reshuffles, we are reassured, and the evidence of that showed last evening when we had a very good discussion, which the Minister chaired, on how we might take things forward. I welcome the Bill, just as the Minister generously welcomed the 2006 Bill from the previous Government. It is a sign that Governments of all hues want to see progress in this area, and that is a very substantial move forward. It is a welcome development and we look forward to taking this Bill further down the line.
However, to mirror some of the remarks of the noble Baroness, Lady Jones, when I saw the Bill I was reminded of a comment by the great Danish philosopher, Søren Kierkegaard. After noticing a review of one of his books, he referred to it as, “somewhat of a review and something of a breathless shriek”; and, although it would not be a full and adequate description of the Bill, I wondered whether there was just a hint of that in the speed at which we are accelerating down the road. However, I would like to say, “So far so good”, as the direction in which we are travelling is a good one. I welcome the Bill very warmly as a sign of the Government’s commitment, manifested in their pre-election statements.
The first clause, which I approve very much and support, shows the Government’s commitment to move and will secure something essentially worth while. The rest of the Bill is a series of regulations and definitions. Finally, in Clause 3, the requirement of a duty to publish information about the service is very good, and, again, I support that. I also support the activity that has been outlined to us being now undertaken by the Government: a review of funding and a consultation with those who will be affected most by the Bill. That is very welcome and very important. There is, however, a question of timing and of the availability of the outcome of both of those reviews, which I hope will be public documents available to all Members of the House. In the proposed timetable that was indicated to us, I especially welcome the use of pilot projects. We have often let down good political intention without piloting the practice and the practicality to ensure that we do not have unintended consequences.
The Bill, as it stands, shows real and worthwhile commitment, but there is a list of “to do” jobs. I have a file at home labelled “Jobs to be done as soon as possible”. Unfortunately, it grows faster than it diminishes. There is a risk here that the jobs to be done will grow faster before the Bill has finally passed through both these Houses. I want to mention some of the issues that we have rehearsed informally and that were laid out in the report of the Select Committee.
The first issue relates to funding. The review is welcome, but the outcome of that review will have to answer some very specific and difficult questions. For example, evidence was provided to the Select Committee that the allowance paid for the current so-called “free” childcare is not adequate to support the system. Those who are in the private sector are finding it hard—and we did not think, “Well, they would say that, wouldn’t they?”—to ensure that they can continue the service. They will be expected not only to continue the service but to expand it. Of course, it means doubling the number of hours available, and it is doubling it by taking away one of the routes by which the current service is funded.
The private providers tell us that how they square the books is to offer additional hours at an increased price. Of course, these hours will now be provided free—a good thing in itself, but there may well be an unintended consequence. We need to know how carefully that is being scrutinised. Will the Minister undertake further scrutiny of the possibility of an unintended consequence? The current funding covers pay costs at the current level. Will adequate pay be available to attract the additional number of carers that will be necessary to run the system and, indeed, to improve the quality? We hope that these carers will have additional background, training and qualifications. Ofsted and others have argued that the danger is that the lowest-quality provision is in the areas where care is most needed, and it is important to pay attention to that detail.
The Select Committee was concerned about the Government’s awareness of the need to co-ordinate strategy, and we asked a number of questions about this. I remind noble Lords that at least three government departments were involved: the Department for Education and Skills, the department responsible for employment and, of course, the Treasury. All three departments have to co-ordinate responses to some of these questions, not least the funding review. However, the issue is not simply about money; it is about objectives. Again, I think that this point has been raised.
There are two main objectives, as we saw it in this Bill and in possible other legislation. First, there is the development of the child, to make sure that all children entering primary school have the capacity, the opportunity and the background necessary to benefit from it. Clearly, many children arrive at school from the early years unprepared for what is involved in the process of education and learning, as primary school teachers will tell you. This provision in the Bill, enhancing provision already there, should help with that; it is a major objective, and certainly one to which the Select Committee gave a lot of time. The second main objective for the Government is to maximise choice and opportunity for many married couples who wish to increase, start or extend their working lives. Sometimes it is not simply a wish but a necessity.
Those two objectives are both marvellous, and I am sure that all Members of the House will approve of them, but reconciling them would be difficult, because, as we stress in the committee’s report, there are some hard choices in how you spend money. A limited sum is available at the end of the day; which way is it going to be weighted? For example, employers would like 10 hours a day, because that is how you ensure that somebody has time to go to the nursery or playgroup, do eight hours work, collect their children and go home. However, although that may well suit employers, on the evidence that we have it is not the best way in which to provide for the enhancement of the children in the groups in question. So there is a question of reconciling different objectives.
The evidence that we have is that child development is best enhanced by a more modest daily provision—rather than 10 hours a day for three days, having six hours a day over five days. From all the evidence, that seems to be the best way in which to prepare children for future schooling and to maximise the opportunities that they otherwise would not have.
Equally, there is the question of how many weeks in the year funding is available for. It is put at 38 weeks, which is a generous extension—but many employers will find 38 weeks in the year an inadequate basis for planning employment and the development of the company. Could this be looked at so that, in appropriate cases, provision could be extended?
The question for the Government that the Select Committee proposed is: what forum is available to analyse and consider these competing elements in government policy? We would like to hear from the Minister the extent to which there is a cross-government committee or interdepartmental work going on to deal with these quite tricky detailed problems.
There are other specific issues, and I am sure they will be raised by Members of the House as the debate goes on. We asked the Government to look at prioritising expenditure. This is based on the work of the IFS on extending childcare provision to 15 hours. The IFS estimated that,
“12,000 additional women moved into work as a result of the policy, mostly working fewer than 30 hours a week … but, at over £65,000 per extra person employed”.
Looked at as a financial provision, that is perhaps not the best way to spend government money creating jobs. We desperately ask the Government to take a detailed look at that sort of question.
That being said, I stress again that I welcome the Bill and the initiative, but I hope we have time to go into some of these questions in some detail before it leaves this House.
The Lord Bishop of Durham
My Lords, in welcoming the general intent of this Bill, I wish to raise a number of concerns. It seems to me that there are already several common threads in what is being said. It may well be that they will be addressed—they will need to be—in the secondary legislation, but to be able fully to support the Bill I believe this House needs some assurances regarding these concerns. In raising them, I wish to point out that I have consulted some who are engaged in this work already, and also those for whom it is intended to be a benefit—parents and, indeed, grandparents.
The first concern is the 38-week period. I recognise this is the pattern already established and ties in neatly with schools being among the key providers, either directly or by others using their premises. However, most working parents have only four to six weeks’ holiday per year, so they need childcare provision for 46 to 48 weeks a year. They end up having to pay for eight to 10 weeks. Potentially, providers under the new arrangements might insist that it is 30 hours for the whole year. That would mean doubling the costs in school holiday periods for those working parents. That would certainly prove to be a financial difficulty. It would certainly mean that the extra help of the 30 hours in the 38 weeks is reduced by eight to 10 weeks’ worth. So I have two questions for the Minister. Will the regulations make it clear that providers offering childcare outside the 38 weeks will not be able to insist that parents take up 30 hours each week in those other weeks? Alternatively, can the Minister confirm that, as I think he indicated in his opening speech, parents will be allowed to spread their entitlement of 1,140 hours per year over either a 48 or even a 52-week period? If it is 48 weeks, it amounts to almost exactly 24 hours per week.
The second concern is the capacity for providing all these extra hours. Let me illustrate. A Baptist church in the East Midlands noted:
“Many providers are not in purpose built facilities and will have to consider that children may need a sleep due to being on site for more hours. We would also need to provide meals–possibly hot, and neither facility is necessarily available”.
It asked whether help would be given help to pay for new equipment to supply that sleeping and catering facility. On a different issue, a nursery in east London wrote:
“Our nursery is almost 100% funded children only accessing their 15 hours. There are 45 children in the morning and 45 in the afternoon. We are at capacity so currently can offer 90 children a place. If all the children qualified for 30 hours we could not increase capacity further so we would only be able to take 45 children instead of 90 therefore effectively halving the amount of places we have to offer to local children. Financially it would make no difference to us but for parents their choice will be reduced”.
The doubling of provision will create major issues of capacity. There is some time for those to be addressed, but this House needs assurance that serious thought has been given to how this doubling of capacity will be handled, remembering that many providers use church and community halls and that the hours they already have may be the maximum that the hall owners can offer. Some will simply not be able to extend to 30 hours in their current premises. Will they be helped to find and establish new premises, or will they have to close? If the latter, the diversity of types of provision available to parents at present will be in serious jeopardy, which will be a weakening of the policy, not a strengthening of it.
Thirdly, there is the financing of this increased provision. Here is a comment from a provider in east London boroughs:
“We have 5 nurseries generally in the PVI sector … the funding for 3 & 4 year olds is already not covering the cost and we rely on parents wanting/needing more than 15 hours who will pay an hourly rate that makes up the difference. In 3 out of 5 of the nurseries this doesn’t really happen and parents just take 15 hours free care. 30 hours a week free will really put a strain on our finances”.
I already noted concerns about capital costs. There is an added concern about proper salaries. The same east London provider comments:
“Our Nurseries are all in London boroughs, we are trying so hard to get to a point where we can pay London living wage £9.15 ph to all our staff meaning an increase in all salaries to differentiate qualification etc but hourly funding rate of as little as £3.56 leaves little room for manoeuvre”.
While I recognise that this increased provision is already a major call on the public purse, the opportunity needs to be taken to ensure that staff are paid properly, ideally at the living wage.
On finances, we must note that the increase in provision may not be cost-free for the working parents. As one parent of twins in County Durham noted to me about the existing provision:
“Childcare costs are so expensive especially when having twins to pay for. This provision would take a lot of pressure off my in-laws who are currently doing the majority of the childcare, as we currently only get 15 free hours each child per week however we still have an invoice to pay at the end of the month to cover the shortfall and meals and we can’t afford to pay for more childcare”.
That mother notes that her husband is self-employed, so has intermittent income, and that they pay a shortfall cost for meal and other provisions. They are concerned that with 30 hours, that will increase.
Finally, I return to a concern I raised during our recent debate on the gracious Speech, which is of the impression increasingly often created that a parent choosing not to work but to raise their child themselves is somehow not doing the best for the nation or the child. Here is what a couple of providers of childcare—I stress that point—wrote to me for this debate:
“My concern about the new Child Care Bill is that we are going further down the road of putting pressure on parents and mothers in particular to be valued as economic units rather than having the most important role of parenting their children valued. I did take a break from employment when my children were young and I am very pleased I was in a position to do so although it was to mine and my family’s financial detriment; the value of it to my children’s well being cannot be measured”.
I had this from another provider:
“I remember speaking to you”—
that is, me—
“about the domination of the ‘childcare’ agenda and how mentioning ‘stay at home parenting’ was met with a brick wall. I am increasingly concerned about the promotion of childcare as it is giving the implicit and not so implicit message that it is better to put your child in childcare and go out to work than stay at home and look after your own children. I would far rather be advocating looking at why the cost of living is so high ie housing crisis etc. which forces people out to work. I’ve had parents ‘apologising’ about their desire to stay at home—as if it’s a sin. I really wonder what kind of society we will have in the next 20 or 30 years if this push for more childcare continues unabated. I feel like the 0-3 year olds in this nation should not be ‘robbed’ of the opportunity to be cared for by their own parents and more could be done to make this possible. They are vulnerable members of our society who seem to have no voice”.
This is perhaps the greatest concern that I have. The whole agenda seems to be about the adult first—their right to work, their economic well-being, rather than the child first. What is the best for the young child? They cannot speak for themselves in this debate. In conclusion, then, on behalf of the well-being of the children themselves, if we are going to make this increase in provision, which I am sure we will and indeed should, let us try to ensure that all the regulations that follow place the child at the centre, not the adults, whether those adults be the parents, the providers or the politicians.
Baroness Eaton (Con)
My Lords, I declare my interest as a former chairman and current vice-president of the Local Government Association. The introduction of the Childcare Bill is a welcome move by the Government to make childcare more affordable for parents and help them to work.
Alongside the Bill, I warmly welcome the announcement by the Government of a review of the funding rates paid to providers and the commitment to increase the average rate paid. The sector has long argued that the current 15 hours of free childcare is underfunded, which has a consequent impact on both the quality of the care that children are getting and the fees for paying parents. It is enormously positive that the Government have listened to the concerns of the sector and are making progress on funding, and I am sure that most of us here will agree.
At four pages long, this is a short Bill, leaving much to regulations. I hope that we will have early sight of these so that they can be thoroughly considered alongside the Bill, as clearly they will set out much of the detail. As such, I have a number of questions about the mechanics of how the additional free childcare will be provided. From the local government perspective, I am keen to understand how the Government intend the 30 hours of free childcare to be delivered. Under existing legislation, councils are required to secure 15 hours of free childcare. The Bill, however, places a duty on the Secretary of State to secure 30 hours, including the existing 15 hours that councils are obliged to secure. This would appear to create a dual system where both local authorities and the department will be involved in delivery.
The childcare system is already incredibly complex for parents to navigate, and I would be concerned if the Bill were to exacerbate this and unwittingly create inefficiencies. Alternatively, is it the Government’s intention that councils should no longer be involved in the delivery of childcare? I would also be concerned if this were the case. Local government plays a key role in helping to achieve a childcare system that supports both parents and children. I note further that the Bill includes regulation-making powers to allow the Secretary of State to establish and impose functions on a corporate body to deliver the free childcare. While there is clearly a need for the Government to have access to a range of ways in which to deliver childcare, I would be grateful for clarification from the Minister about his intentions here.
As I have said, a review of funding rates for providers is much needed and therefore warmly welcomed. The hourly rate has been frozen in cash terms for the last three years, and, as the funding received is based on historic spend and levels of disadvantage, not all councils receive the same amount. Councils receiving a lower level of funding have reported to the Local Government Association that providers are telling them that it is insufficient to cover their costs.
Councils do all they can to ensure that good-quality, affordable childcare is available. However, the level of funding is closely linked to quality and, therefore, to children’s progress and outcomes. I have no doubt that the review will examine the rate needed to ensure high-quality provision. Nevertheless, I emphasise that the funding rate should be set at a level needed to ensure that standards are likely to improve children’s outcomes. I am also keen to know whether the Government have considered whether capital funding might be needed by providers to expand provision to meet the commitment to 30 hours of childcare.
The question of eligibility has been raised and expanded on by many noble Lords today, but I, too, would like to touch briefly on this. I would welcome more detail from the Government on which parents are eligible for free childcare and the criteria by which eligibility will be determined. If councils are required to assess eligibility with new eligibility criteria, any additional costs incurred must surely be fully funded.
The policy aims behind childcare have changed over time, moving from an emphasis in the 1990s on increasing maternal employment in low-income families to, more recently, its benefits for both parental employment and child development. The coalition Government’s report, More Great Childcare, cited findings that high-quality preschool childcare is especially beneficial for the most disadvantaged children, thus introducing a third policy aim: closing the gap between disadvantaged children and their peers.
There is a real emphasis in the Bill and the Explanatory Notes on childcare being for working parents. While this is commendable and much needed, childcare should aim to meet both the needs of working parents and the developmental needs of children, and be funded commensurately with this.
I look forward to the Minister’s response to the points raised in the House today. I will of course continue to champion local government’s role, with its statutory duty to secure, as far as is reasonably practical, sufficient childcare. To this end, the Bill has real potential to create a childcare system which is affordable and of high quality, and which supports parents getting back to work and, early on, sets children on the path to achieve their full potential.
Baroness Andrews (Lab)
My Lords, I join other noble Lords in welcoming the Bill and the promise of extended childcare that it offers, as indeed I welcome the extension of long-overdue childcare over the most recent years.
The Bill has also been welcomed in principle by the people in the field who know most—the expert organisations and the providers. However, like them, the House has already identified some of the key issues that we have to address during the passage of the legislation, and the crucial one is: how workable is the Bill? Can free, quality childcare be expanded from 15 to 30 hours without putting the existing system at risk? To help solve the problem, it is welcome that the Government have set up a funding review and a consultation programme for parents, and we look forward to the findings. Yesterday the Minister was good enough to hold a briefing session to explain the Bill to noble Lords, and we learned that the review and the consultation will report in the autumn. However, that presents this House—and I suggest that it presents the Government—with a genuine problem. I am afraid that I have many questions and I hope that the noble Lord will be patient with me.
Can the Minister tell me whether he expects the Bill and the regulations to reflect the findings of the funding review and the consultation, and, if so, how does he expect the present timetable for the Bill to work? Would it not have been eminently sensible to hold back on the Bill until the Government knew what the recommendations of the funding review would bring forward and design the regulations around those recommendations so that we could indeed debate them, as he says, as thoroughly as we should? Better still, why not put some of the design and detail in the Bill so that we would have a proper opportunity to challenge and change what we thought could be improved? We cannot amend regulations, as the Minister knows.
If the Government do not intend to reflect the changes that must be under consideration in the funding regime in the regulations, how does the Minister actually intend to implement them? If he does not intend to reflect these changes, what is the point of this Bill in this form now? This matters profoundly to this House. The Bill has been introduced here and it is our duty to test and scrutinise policy against what the Government claim are their policy objectives and in terms of its sheer workability. That is what we are for.
The Prime Minister, as we know, is not a man for detail, but even he has to concede that getting this massive expansion of childcare provision right is going to take time. As he said, for,
“the best way of making sure that”,
childcare providers are being,
“properly paid for the level of childcare that they provide”,
the time must be provided to get it right. Given the challenge of finding the right balance so that providers and parents are not, as now, cross-subsidising the system, and providing sustainable as well as better- quality childcare, I have to ask the Minister why we are discussing this Bill before we have the answer to some of these questions. I think that it is almost an abuse of process, because we are not able to discuss this Bill in the way that we need to in order to have an impact on the process itself. I know that the Minister will want to explain the logic of his position in his summing up.
My second point is the nature and scope of the regulations in the Bill. I do not think I have ever seen a Bill that is, frankly, so vacuous but on which hang so many regulations, some of them novel and contentious, such as that to create a new criminal offence. The Bill and the regulations raise the question, as has already been alluded to by the noble Baroness, Lady Eaton, of who will be held accountable for its delivery. The Bill creates a new duty on the Secretary of State to provide for childcare. This is, in many ways, very welcome. However, the question surely is, how does this new duty sit alongside the existing duties on local authorities to provide for childcare? Is it intended that the Secretary of State will police the local authorities to establish more consistency in terms of access and funding? Whatever happened to localism? I would be very grateful for a specific answer on that point.
On a related point, what will be the function of the new and mysterious “body corporate” set out in the regulations mentioned in Clause 1(5)(g)? Why is this not in the Bill? This is nothing less than a new quango. I wonder whether the Minister has brought this new quango to the attention of the Cabinet Office on the grounds that none of the existing agencies can actually manage the complexity of the existing or new system.
This underlines the point that I want to make: these regulations are not technical—some of them may be technical—but they provide for substantial new delegated powers. Which of them will carry the affirmative orders? We await the report of the Delegated Powers Committee with unusual interest.
My third set of questions is around how this will actually work and what difference it is going to make. I welcome the consultation in principle because it is always good to see government wanting to take evidence. However, there is no need to look very far for solutions as to what needs to change. It is all set out in the report of the Select Committee on Affordable Childcare and in the response to the Bill by the childcare agencies and providers.
There is consensus around the failings of the present system. There is a lack of capacity, with 40% of providers saying that they have no spare capacity. There is a lack of flexibility in the hours provided, which means, as we learned from the noble Baroness, Lady Pinnock, that many parents who work irregular hours have not been able to access the provision that is already there. There is a lack of trained and qualified teachers, particularly in the private and voluntary sector, which means that the poorest children in particular are not getting the enriched childcare to lift their learning and life skills. In short, the Minister will hear from all the organisations involved that the childcare system is hugely stretched, unfair and locally erratic in terms of funding and delivery, inchoate in relation to the benefits system, and missing some of its key objectives. The Minister and Ms Patel will hear, loudly and clearly, that unless the extension to 30 hours’ funding provides for the right degree of uplift for providers, which means that they no longer have to subsidise the system themselves, there will be a meltdown. These are not my words but those of the Pre-school Learning Alliance. Does not the Minister agree that this is an obvious opportunity to put these failings right and to create a more robust and fair system of provision?
Will the Minister do as the Select Committee asked—the noble Lord, Lord Sutherland, alluded to this in his speech—and clarify the objects of the policy in the Bill? What is the prime aim of this policy? Is it about boosting child development, through childcare, for the poorest children, or is it about working parents? Of course they are both important and fit together but the policy objectives need to be integrated and articulated in such a way that we can see where the funding is going and what impact it will have. Cheap low-quality childcare gives to parents an opportunity to park their children, but it does very little to lift child development.
In the letter the Minister sent to noble Lords he referred to working families and reducing the cost of childcare, but there is no mention of providing quality childcare as an objective. I am sure that was an oversight rather than a deliberate omission.
However, if the prime objective is to close the attainment gap for children, which disables so many from accessing the curriculum, will he provide in his new plans for more early years specialist teachers in the voluntary sector? Will he follow the leading example of Wales and provide for cultural enrichment to aid language, social and reading skills for the most disadvantaged? Will he correct the situation whereby the poorest children are in settings which are neither good nor outstanding in many cases? Will he now provide for additional provision for disabled children? In short, will he commit to developing a proper strategy for the early years workforce to improve training and qualifications and to increase capacity?
If the prime aim of the policy is to get as many parents back into work as possible, the Minister will know that the evidence suggests, as already quoted, that it is reaching far fewer working parents than anticipated at a formidable cost. Does he accept the findings of the IFS? Can he tell the House how the Bill intends to enable providers to move to full daycare and greater flexibility? How much will it cost to do this? How much of that will be capital investment?
Finally and fundamentally there is the question of funding. What does the Minister think the Prime Minister meant when he spoke of the providers being properly paid for the level of childcare they provide? Does it mean, for example, that the Prime Minister and the Minister agree with the Pre-school Learning Alliance that the existing commitment to £350 million is around a quarter of what is needed? That evidence was provided to the Select Committee by the Minister in the other place. We need an answer on that. Does he agree that unless this is provided there are real fears of more and more providers withdrawing from the system, which will undermine and railroad the entire policy? Again I quote the Pre-school Learning Alliance.
Yesterday we heard the Minister, Mr Gyimah, suggest that the funding issue was less challenging than everyone seems to think because a high proportion of the extra 15 hours to be provided will be accounted for by parents who now pay for childcare but who will, under the 30 hours extension, be able to access it free for the first time. This raises some profound questions to which we need answers. What proportion of parents do the Government think will simply transfer from paid care to free care? If this is intended to bring more parents into work, what proportion will be likely and able to access free childcare for the first time? In short, if the test is to expand the provision for working parents and economic benefit, who will the policy provide for and what will be the outcomes for parents and the system? At the moment, as we have heard, parents who pay are, in effect, subsidising the shortfall in the cost of free places, which varies hugely from place to place. What will be the impact on those precariously funded providers, as we heard from the right reverend Prelate?
Will the Minister guarantee that the uplift in funding will cover the cost not only of extending hours but of enhancing the skills and the capacity of the workforce to provide the high-quality, rich learning experience which will make a real difference to poorer children when they start school?
The Select Committee produced a devastating forecast of what will happen if underfunding in the system is not addressed. We understand the call for additional free hours of early education to help working parents. However, in light of the evidence of underfunding of free early education in the PVI sector, we believe that an extension of the entitlement to free early education would be unsustainable for the private sector at current funding levels. It would not be possible for providers to recoup the losses made on the delivery of free early education places if this were extended to 25 hours a week. We are talking here about 30 hours, not 25.
This report was the obvious place to start building a new and improved model of childcare. Quite simply, I fear that, by proceeding as they are, the Government are at risk of not taking advantage of thinking this through and creating a better start for the most disadvantaged children and poorest parents, and that this extended model could build on—and actually compound—some of the failings of the existing system. It is almost certain to do that unless the funding review finds the money with which to build, rather than undermine, capacity. I very much hope that the Minister will think again about the scope, as well as the process, of the Bill.
Baroness Bakewell of Hardington Mandeville (LD)
I too welcome the Government’s proposal for extending the availability of free childcare to 30 hours per week for three and four year-olds. Affordable, good-quality childcare is key to ensuring a good start for children and to getting their families back into work with that peace of mind that is so crucial to the parents of young children. This extension of childcare is of great benefit.
Like others, I am concerned that there is sufficient, good-quality provision available to cope with the increased demand this legislation will create. As other noble Lords have said, children deserve the very best provision in order to help them achieve their full potential and take their place in life. Childcare provision can be patchy and the price paid for it often determines the quality received. However, this is not always the case. We all want to be assured that the provision for those who qualify is top notch and not—that appalling Ofsted term—“adequate”.
The issue of the quality of childcare is extremely important. The provision of the first 15 hours of childcare free for three and four year-olds, and two year-olds from disadvantaged backgrounds, was drawn up with consideration to the impact on child development and outcomes for the children. The offer for two year-olds was specifically designed to ensure these children were school-ready. I am concerned that the extension of the scheme may not have the same ethos running through it. Can the Minister reassure me that the quality of the childcare, coupled with availability, will be paramount?
Despite it being desirable, there is not an endless supply of good-quality childcare. Although those living in urban areas may find it easier to travel to a childcare provider, in rural areas this may be impossible. The lack of buses between villages and towns means that those on very low incomes and without access to a car will have little or no choice over provision. In many villages—even quite large ones—there are no pre-schools and no nurseries attached to the primary schools. In other villages, it is years since the primary school closed down. Can the Minister give reassurance that those on low incomes, living in villages, will indeed be able to access the free childcare they are entitled to?
I am also extremely concerned about the availability of childcare for the parents of children with disabilities. Very specialist care is needed for these vulnerable children and it is often non-existent or expensive. What safeguards are in place to ensure an adequate supply of free places of sufficient quality to meet the needs of children with disabilities? Only if the provision is suitable will the parents be able to leave their child knowing that they will be safe and happy.
The Conservative manifesto committed to,
“increase the hourly … rates paid to providers in different parts of the country, and will consult on the appropriate level and design of the uplift”.
Concern has been flagged up by those in this House and various children’s organisations that the money provided by the Government is insufficient to cover the real cost. The Family and Childcare Trust tells us that the difference in childcare charges runs from £9.17 per hour in Camden to £3.24 per hour in Solihull, with the average for local authorities being £4.51 per hour. Some providers find that the money allocated by the Government for the current free 15 hours does not cover the cost of the provision, and some cover their costs by increasing the fees to those parents who pay. That is likely to lead to an invidious position whereby fee-paying parents feel that they are subsidising those who receive free childcare. That is unlikely to lead to community cohesion.
The requirement that the additional hours will be available only if both parents of the family are in work, work more than eight hours a week and receive the minimum wage is also of concern. As we all know, in many cases, a wage far below the minimum is paid. Many low-paid employees are on zero-hours contracts or very short-term contracts. It is likely that these parents will not therefore be eligible for free childcare. This makes them doubly disadvantaged. Will the Minister say how the Government will ensure that those on the lowest incomes will not be penalised if they are earning below the minimum wage or are on zero-hours contracts?
It is a terrible wrench to leave a young child when one returns to work, for however short a period each day. Feelings of guilt can be overwhelming. Mothers leaving their children often turn away choking back the tears, although the child is perfectly happy and skips away unconcerned. This feeling of guilt is exacerbated during school holidays. That was the time when I wished with all my heart that I had trained as a teacher, or had been a classroom assistant or even a dinner lady. While the increase in hours to 30 during term time is to be greatly welcomed, what of the school holidays? Parents will be forced to pay for their childcare during the 14 weeks that are not covered, which will place an intolerable burden on the household budget or may lead to some having to give up work in order to care for their child. Where there is more than one child under school age, the strain on the budget will be immense. Like others who have spoken, I ask the Government to look again at extending free childcare beyond the current 38 weeks.
I welcome the Bill. It is a huge step in the right direction but I remain concerned about some of the finer detail and look forward to the Minister’s response.
The Earl of Listowel (CB)
My Lords, I thank the Minister for introducing the Bill and for his kind words about those of us who worked on the Childcare Bill in 2006. At that time, we reflected that we were 30 years behind Scandinavia. I think we can all agree that huge progress has been made since then, which the Minister pointed to in what he said.
I also had the pleasure of working with the Minister on the then Children and Families Bill. As noble Lords who worked on that Bill know, the Minister is very prepared to work with Members of your Lordships’ House. He was very open-minded and very helpful, particularly with regard to noble Lords’ concerns about children staying put in foster care. I encourage noble Lords to take every opportunity to work with him on specific items regarding this Bill. I think he would be pleased to do that and that we will see a good outcome if we do.
I also thank my noble friend Lord Sutherland and his colleagues for their important report. I should like to highlight what they said about the importance of nursery schools.
I welcome the principle of the Bill, but I share the deep concerns that many have expressed that whatever is offered must be high quality. It is perverse to offer more of what is not that good. That is not helpful. It would be worse to encourage parents to place their children in poor-quality care than to do nothing at all. We have to get the quality right.
There has been some concern about the need to deal with so much of this area in secondary legislation. I would be grateful if the Minister could reassure the House that he will be directly involved in a lot of that secondary legislation as it comes through the House. It would be helpful certainly for me to know that he would be involved in that.
I welcome the principle behind this, which is, in part, to help parents into work. We know that this will be a helpful factor in helping children out of poverty. It is also helpful for adults’ mental health to be in work. Obviously, caring for a young child is a job in itself; it can be quite isolating. It is good that we are giving parents a choice between being full-time parents, which is a very important job, or going out into the wider workforce and working. Probably the optimum mix for children aged three years is a few hours of group care and spending time with their principal carers.
The chief ask that I have for the Minister and for your Lordships’ support is an opportunity to stand back and look at childcare as a whole. We were grateful to hear from the Childcare Minister last night, and I thank the Minister for agreeing to that. The Childcare Minister said that childcare provision as it has evolved today has been a very British process, in that it has evolved piecemeal—I do not think that he quite used that word—over time. He also said that the childcare we have in this country is significantly more expensive and that we get less value for money for what is offered than on the continent. I know that the Minister has been concerned about this in the past.
I ask the Minister and colleagues to think about some kind of opportunity to step back a bit further—even behind the welcome consultations on funding and on the workforce—to think about how this market works and how it might be made to work better. It is very depressing that we all agree that nursery schools provide the best qualified and most stable workforce in this area, yet, as we heard from the noble Baroness, Lady Jones, this has been declining over the years. I have met with nursery school teachers who have told me that. Something seems not to be quite right in the overall policy, and we need to address it.
I turn to quality, which has been talked about so much today. Professor Jay Belsky and others pointed out in the EPPE research—I am sorry to use that acronym as I cannot remember the details of it; maybe someone will help later on—that high-quality childcare can be shown to have beneficial effects to the age of 16. Professor Melhuish pointed out that children who had had high-quality early years care would still be doing well through primary school to the age of 11, even if they went to a poor primary school, because the high-quality early years care provided a protective factor against a poor primary school experience. So we know that high-quality early years care makes a difference in outcomes for children, which we very much want.
Many of our concerns are about quality. The noble Baroness, Lady Pinnock, put this very well, as did the right reverend Prelate the Bishop of Durham. In all this we must not forget the children; we must put them first. I am afraid that the report from the Children’s Society’s Good Childhood inquiry highlighted how we have forgotten children as a society. The OECD report of 2011 highlighted that about 22% of our children were living without a father in the household, compared with 25% or so in the United States and 15% in Germany, but we are set to overtake the United States. The Good Childhood inquiry suggested that this is because very often parents, understandably, put their own concerns before those of their children. There are cases, obviously, where children do better without unhappy parents together, but we need to put the interests of children first.
The Minister was reassuring to some extent about the workforce and highlighted the fact that we had moved from 75% to 87% of the workforce having at least one NVQ level 3. That is encouraging and there has been much progress, but that is only one O-level. What percentage of the workforce is now comprised of graduates and what percentage of group settings are managed by graduates? I do not expect him to answer that now, but I would be grateful for a response.
In my experience, one often finds that very young people move into this field who may have been subjected to poor parenting experiences themselves. The youngest and most inexperienced are often put in charge of the baby rooms. This seems to me a recipe for a not very good outcome for those children. I consider that the concerns expressed by noble Lords around the House in that regard are valid.
What is needed is a strategy for the workforce, as I have hinted at already. In schools, there are “Baker days”, which provide time for staff to be away from their pupils to enable them to think about the work they are doing. Coram schools are the best examples of this provision and have for many years allowed early years practitioners time away on a regular basis to sit and talk about their relationships with their children. For instance, one could think about having one teaching qualification so that teachers going into primary, secondary or early years teaching would all have the same qualification. If one gets qualified as an early years practitioner, one can move into primary teaching. That would raise the status of early years care tremendously. A lot of good things could be done in terms of the workforce.
We need to build up nursery schools. It was good to hear that the Chief Inspector of Schools has called for statues to be put up of head teachers of schools. I am told that a very good candidate would be a Ms Curtis, who is the manager of Everton nursery school in Liverpool. I hope that we might see a statue erected to her some time soon.
I do not wish to detain your Lordships too much longer. As I say, I am concerned that we should stand back and look at the market to see whether it works efficiently enough, given the money we invest in it.
In addition, I hope that the Minister and your Lordships might be open to thinking about whether homeless families who are not in work might be able to benefit from this free early years childcare. Their children are living in an uncertain environment and being moved around so will face particular developmental difficulties and would benefit from the high-quality 30 hours a week free childcare offered in the Bill. I hope that some thought will be given to giving those homeless children this opportunity. There are 90,000-plus homeless children in England, Wales and Scotland and there were more than 2,000 families in bed and breakfast last year. It is a very serious problem and hard to see how it will be dealt with. The least we can do is try to mitigate the harm to the children in those homeless families by giving them all the support that we can.
I look forward to working with the Minister and look forward to his response.
Lord True (Con)
My Lords, it is always a privilege to follow the informed and compassionate interventions of the noble Earl. I declare an interest as leader of a local authority whose duties and costs will be increased by prescription under the Bill. I declare another interest as my wife is principal of a nursery school, and a very experienced and highly respected Montessori education professional. So if I, like others, concentrate on the concerns that I have about the many unknowns in the Bill, I hope that it will be understood that I recognise without demur, as others do, the value of high-quality nursery education—and I do believe that the greater availability of that is welcome. This is a manifesto commitment and it must be implemented. I know that the commitment to it of my noble friend Lord Nash, for whom I have unqualified respect, will ensure that it is implemented with care. I am grateful that I have already had the chance to speak to him.
However, as others have said, a manifesto aspiration does not leap fully formed like Athena from the head of Zeus into thought-through law or practice in under four weeks. Speaking as a superannuated policymaker, I do not believe that a rushed skeleton Bill is a good way to make policy or to draw on the wisdom of Parliament. I guess that I am just an old-fashioned Whitehall beached whale when I think that there might first have been an appraisal of what we have now—whether it is capable of providing 30 hours’ free childcare—and a completed funding review rather than the welcome news that one is beginning; and maybe even a White Paper. In the absence of that, I join those who have praised the work of your Lordships’ Select Committee on Affordable Childcare, which was so ably chaired by the noble Lord, Lord Sutherland of Houndwood. I agreed with almost every one of his wise words today.
The challenge as laid down by that committee in respect of evaluating the potential deadweight costs of this policy, its effectiveness in practice, its impact on the private and voluntary sectors, the adequacy of funding and the role of local authorities—among others—surely deserves an answer in detail before Parliament completes the passage of legislation that will award Ministers quite enormous regulating powers. Can my noble friend confirm when the response to that Select Committee will be published?
Many have questioned the adequacy of resources for what we have now, let alone what is proposed, so I will not go further on that. My noble friend had estimated £350 million a year, and it would be interesting to know if that is still stood by. But even if that is correct, I feel that for this policy to be implemented best—and it could then have very considerable merit indeed—it might be targeted and phased, and I welcome the fact that the piloting mentioned today already envisages that. The policy could first address disadvantage, single parenthood, special needs, inadequate parenting and areas where provision is limited—and then move on, if and when we know it is deliverable and can afford it.
Despite my noble friend’s words today, we still know too little of the eligibility criteria. There is reference to “working people” and homes where, we are told in the notes, “all parents”—I suppose in the modern world that means two or more—work, but for how many hours and on what? How is that going to be assessed and by whom? I am sorry that the right reverend Prelate is not in his place, because I follow the point that has been made by others that there is always a risk of institutional bias in policy-making when those involved in making or commenting on policy are by definition working people. But there is a danger of forgetting the enormous contribution made by many remarkable mothers who are now classed, rather slightingly, as people who do not work. Has the state really resolved to discriminate against families where one partner does not work but instead devotes their time to childcare?
If so, that leads to a second question, which others have touched on: just who and what is the policy for? I think that this is the nub of the question. As others have said, surely the centre of any education policy, particularly for the youngest children, must be the child, not increasing household disposable income. Great stress is laid on the economic value of getting more people into the workplace, yet, as has been pointed out, the research of the IFS, and indeed the finding of the Select Committee, was that the proven behavioural effects might be limited and that there was a risk of a substantial deadweight cost. This needs to be teased out because that would be just the kind of policy a country in parlous and deepening debt can least afford.
What we have is a proposal that parents of children aged three and four will be rewarded for putting them—looking at it from the child’s point of view—in other hands for 1,140 hours a year. This compares with rather less time spent in the classroom by many older children. Are we certain that actively promoting at every level of income this way of bringing up very young children is for those children the most beneficial? I wish that I could be so sure, so I agree with others that there needs to be greater clarity about what we are after here. Is it the maximum hours of free childcare—although not enough to cover full-time work—or the best possible education for balanced child development? The two are not the same. Indeed, as others have pointed out, one may work against the other.
One thing I know is that the needs of every child vary and that there are many good ways to provide for education, so I disagree profoundly with the contention that all operators must meet the same criteria. Touching on the private sector, despite the deeply unfair imbalance in regulation between the PVI sector and the state sector, we have enormous reliance on the private and voluntary sector—for 60% of three year-olds nationally, and for 76% in my own authority. Setting aside the resource point, which others have made, many of these are sessional settings with part-time workers. Yes, nursery teachers, too, are working people with their own needs. Many are in rented premises whose times of rent cannot be increased. Nearly half of all settings in London are operating at full capacity. The sector is not capitalised to build new provision, except in the large chains. They simply cannot adapt to meet the demands of flexible working. Local authorities, I assure your Lordships, certainly do not have the resources—or in cities, the space—to provide replacements.
My noble friend knows from our work together, which I so appreciate in my own authority of Richmond, the immense difficulty of finding places in cities for primary schools, let alone new-build nurseries. It is already widely asserted that the 15 hours of free education is underfunded, but what is true is that in many places, so-called free education is an open fiction with, as others have said, settings that are theoretically not permitted to charge top-up fees sometimes charging loaded fees for time outside the so-called free hours to survive. Without that possibility—and we must note that 30 hours would be more than many sessional carers or schools do or could provide—much private and voluntary provision might become unviable, be driven private or be ruinously expensive to the state to finance in full. That is a troubling prospect and might mean the loss of many often skilled part-time jobs for women. I know that my noble friend, with his typical wisdom, will find time to consider these issues and meet providers—including, I hope, the Montessori Schools Association—to discuss these concerns.
I am afraid that I agree with others that the regulation-making powers in the Bill are disturbingly wide, disturbingly ill-defined and draconian. Potentially, they could lead to effective state control of the whole sector by the back door, just at the time when my noble friend is so rightly and so boldly liberating the maintained schools sector to be diverse. As others have asked, will we see the draft regulations, because that is important? We have already had one long, costly and failed attempt to find a single funding formula for the whole sector. I hope that we do not now plan another. The Bill gives power to the state to specify descriptions of childcare. What does that mean, precisely? As to the nature of nursery education, since 2006 we have already had the 2008 EYFS, the Tickell review, the 2012 revised EYFS and the 2014 EYFS revisions. What now? Can we be confident in all these regulations that my noble friend’s department will this time get it right first time—and how will we protect diversity?
Finally, I am troubled to see in the Bill proposed criminal penalties. I would like this to be explained either now or in Committee. Penalties on whom? Would nursery teachers be sent to jail for up to two years, as the Bill allows, if they fail to find out the whole truth about the private affairs of every one of their parents, or if they fail to disclose confidential details of their businesses to a local authority? I think we need to know.
On local authorities, I will not add to the questions asked by my noble friend Lady Eaton, with which I agree, but local authorities already publish details about local provision under the 2006 Act. What more is required? That more officers be appointed to probe the affairs of local nursery schools? Surely that cannot be the intention. We must avoid an intrusive bureaucracy, there in part to police a boundary to exclude so-called non-working mothers from help with childcare. Is there a risk of a social and administrative cost in that which is greater than the benefit?
This is a praiseworthy ideal. If properly planned and implemented, it can be a great boon, giving room to the rich diversity of provision and differing development of every child. Yet there is so much more we need to know. It is a fine idea in urgent need of better definition. That lack of definition, combined with a major increase in state power made possible by the Bill, might be a benefit—but it may be a danger. I look to my noble friend, in the extensive consultation he has promised and I know will deliver, to ensure that it is the former.
Lord Sawyer (Lab)
My Lords, I agree with the noble Lord, Lord True, that this is a political Bill. It was in the election manifesto of the Conservative Party and therefore it is right and proper that it be acted on. I also agree with much of what was said by the noble Lord, Lord Sutherland, with whom I had the pleasure to serve on the Select Committee.
When I wanted to know a little more about the Government’s intentions in relation to the Bill, which are not clear from the Bill itself, I looked at the letter that the noble Lord, Lord Nash, sent to all noble Lords a week or so ago. It said the Government were a one-nation government acting in the interests of all. Therefore, I take this to be a one-nation Bill for childcare and I welcome that. He also said it was essential for families, and for the economic development of the country, to improve children’s educational outcomes and to help narrow the gap between disadvantaged children and their peers and, of course, to help families and parents to work. All those aims are good and are what I will measure the Bill on as it works its way through the House.
I think they are the right aims. The Government now have to start fulfilling them and have first to be honest about the shortcomings of the previous Government’s policies and how they intend to deal with them and meet future commitments. We have to be honest with parents and say many of the things that have been said today, particularly that the present offer is far from perfect and where through underfunding the PVI sector cannot meet it, it is often subsidised by parents, both those who accept and enjoy the offer and others. We have to tell parents that the current offer is often low quality because it does not allow for qualified staff to be paid in some PVI settings. We need to deal with some of the shortcomings to give parents the belief that they will be addressed and, more importantly, to say what the current offer will mean for them.
I hope the new offer will do something about the scandal of low pay for nursery nurses in the PVI sector. It is a big issue but I do not think we can keep sweeping it under the carpet. In this week’s Nursery World there were nursery nurse jobs advertised at 30 hours a week for £9,000 a year, and 37 hours a week at £8 an hour or £15,000 a year—£8 an hour, of course, is £1 an hour under the national living wage. Try getting a plumber, roofer, gardener or anybody to come to your home for £8 an hour and you know what the answer will be. Yet this is what we are offering to pay nursery nurses in a brave new world. This morning I could engage a dog walker in Barnes for £15 an hour, which says it all. Will the Minister explain to the House how these rates of pay fit with the one-nation policies that he believes underpin the Bill?
The National Day Nurseries Association has just reported that 43% of nurseries are unable to find staff with the right levels of qualifications. The chief executive officer of the association said that,
“staff who picked childcare as their career choice are leaving because they can earn more”,
and work fewer hours in a supermarket. Again, I would like the Minister’s observations on that.
I hope the Minister will tell parents that the Government will not damage the maintained sector through their policy developments and that they will not try and move salaries down in it, thus endangering the long-term sustainability of the sector, which provides some of our best nurseries in some of the most deprived areas.
We are going forward to parents with an offer whose details we do not yet know. I accept that—I have to. We do not really know about the funding either, which I also accept. It could be £350 million or it could be £1.5 billion. I am not really bothered about that in a sense; what I would like is to see the offer being worked out comprehensively and the funding for the offer, which is the common-sense way of dealing with it.
I welcome the consultation, which is absolutely right. The consultation mentions providers, but little has been said about staff. The professional organisations, such as the trade unions, will need to be included in the consultation. I hope we will be able to do that, because it is the people on the ground who always have so much to offer and who know how it is. I hope the Minister will talk to the TUC and the CBI. They can help and have much to offer, and the Government need their experience in this consultation. They know, through their wide experience in all industries and sectors, how to get long-term sustainability. They could help with this sector, as well as with fair wages, with how to attract staff and with how to build sustainabilities. We should engage the TUC and the CBI in the discussions. I am confident they will want to help.
The Government should also engage the CBI and employers, probably even more than the TUC, as they are providers, which we tend to forget. A big change is taking place with employers and employees as to what parenting is about and how child development can fit in with being an employee and a parent. We are missing that, which maybe goes back to some of the contributions this afternoon asking whether it was all going to be about massive, monolithic state provision. I do not think it can be, and employers have a very important role to play and something to say. More and more employees and employers want to work this out together, and employers recognise the importance of highly skilled, highly trained and highly intelligent staff who say, “Actually, I want to spend some time looking after my children”. When I was young, I would have been told to go and jump in a lake if I had said that, but that is not so any more: employers are now much more receptive to this and much more prepared to work with employees on how to develop children. The Government should talk to the CBI and employers about this issue.
The Government have made this offer. It is the right offer and they need to fulfil it through this comprehensive debate that we are going to have. I welcome that and will be looking for the outcomes that will take everybody forward, particularly nursery nurses, who often get forgotten or not talked about properly, work for appalling wages and need some help. I am not saying the help will come overnight or that overnight they will go from £8 to £16 an hour, but we should have a long-term sustainable plan for raising the kind of salaries we can pay these people so that at least we can hold our heads high in some kind of respectable way, given that we have taken their contribution to our economy. I will be looking for outcomes that take staff forward, for sustainability and of course, most of all, for adequate funding.
Baroness Janke (LD)
My Lords, I welcome the Bill and the extension of free childcare. The issue of childcare is of great importance to families, particularly those on low incomes. Cost, availability and accessibility are all factors that can put huge pressures on family incomes, limit the opportunities available to parents and result in problems and anxieties for all members of the family. In this context, the provision of an additional 15 hours of childcare for three and four year-olds is a very positive move.
Nevertheless, as others in the Chamber have said today, there are some concerns about the Bill before us. There are a number of areas where more information and clarity is needed, particularly as much is to be delegated to secondary legislation. I am sure we all hope that the Bill will be a Bill of opportunity. Many noble Lords have mentioned the importance of supporting child development; of closing the attainment gap; of giving disadvantaged children a fair chance in life; and of providing opportunities to enable parents to work, many of whom are prevented from doing so for all sorts of reasons. It is therefore essential, as we have all said, that high-quality provision for every child who needs it is top of our list of priorities.
Others have said today that the present system is underfunded and the hourly cash rate has been frozen for the past three years. We know also that there are significant shortfalls to the private and voluntary sector providers. I would like to put in a word for those providers today because, as others would say, every child is different and has different needs. Children have a whole range of needs, and diversity of provision is a real strength and something we must seek to protect through the Bill. Capital funding really needs to be considered in an overall analysis. We have heard from the LGA that there is a lack of clarity between councils and the Government. I hope that this issue can be sorted out because I want us all to be united behind such a positive step; I do not want it to be criticised by those who want to criticise public sector provision or spending on what they believe are unnecessary social objectives—there are people who do that.
There needs to be more clarity as to what the eligibility criteria are. I very much welcome the definition of working parents that the Minister has given today and I hope that we can go into that in a little more detail. Lower-paid jobs are often less secure, and flexible and short-term contracts are less stable. If lower-paid parents are able to access the free entitlement, they may easily lose it, with all the resulting pressure on the child, the family and the care provider. So I hope that the assessment of eligibility is sufficiently flexible to take account of those circumstances and the uncertainties of the job market for lower-paid parents. Equally, barriers to gaining employment are often related to skills shortages. Training and back-to-work support are the means of getting better-paid employment and moving out of poverty and disadvantage. I hope that this will be taken into account as the Bill progresses, and that the eligibility criteria will include parents who are seeking to improve their employment prospects in this way.
I very much welcome the principles underpinning the Bill of supporting child development and enabling parents who want to work to do so. It can be very frustrating for parents who are ambitious and keen to do their best for their families to find that they are quite unable to afford childcare, and I hope the Bill will take account of that. The introduction of free childcare is extremely positive, as long as it is backed by realistic levels of funding. Local authorities are key partners, and I very much hope that government and local authorities will work together on this. Local government should be fully included in funding considerations.
People in lower-paid employment must be helped to benefit from additional free childcare and not disadvantaged as a result of their working conditions. For this to be the case, we must be flexible in taking account of the uncertainties and precarious nature of lower-paid work.
In welcoming the Bill, I look forward to further consideration of the detail and hope that the issues raised today will be resolved during its passage.
Baroness Howarth of Breckland (CB)
My Lords, over the years my experience in this place has been working to add principles to the face of complex Bills. This is my first experience of a Bill that is a principle with little other substance, and the contents do not even address the issues and concerns outlined in the report of the Select Committee on Affordable Childcare. The Bill does not meet the government objectives of coherence of the various policies nor explain how the tension between the two central policy planks—improving child outcomes by narrowing the attainment gap and facilitating parental employment—will be addressed. Nevertheless, together with many of my colleagues, I welcome the central objective and principle of the legislation to secure 30 hours of free childcare for working parents. I hope that, in specifying the descriptions of such childcare, the Government will ensure not only that there are enough places but that they are in flexible packages and it is good childcare—points made by noble Lords time and again during this debate. No parent wants to leave their child in a placement that is less than satisfactory, but some parents are desperate enough to do so.
Again, we have heard time and again that to provide a level of excellence is not cheap—unless, of course, you are paying below the minimum wage to some of your staff. That is an issue that needs to be seriously addressed. The Select Committee report quotes evidence to suggest that money allocated for free care policy and distributed by local authorities does not even cover the cost of delivering the free hours. Indeed, the Local Government Association, of which I am a vice-president, points out that the present system is seriously underfunded. I welcome the Government’s promise to review, and the pilots, which I hope will bring some answers to all this. However, I understand why the Government want to get on with it and perhaps do these two things in tandem.
Instead of going through what everyone else has said, I shall mention a couple of other areas that need to be teased out. Clause 1(2) states:
“‘Qualifying child of working parents’ means a young child who … is under compulsory school age … and … is of a description specified in regulations”,
whatever that means. The Government have said separately that, to be eligible for the additional hours, both parents should be in work or be a lone parent in work. Where does this place the families of disabled children in terms of eligibility for the extra hours? In addition, could the Government clarify the continuing role of local authorities in delivering this cost? How will that work together with education—otherwise there will be a further level of confusion? Sometimes those who work for local authorities feel that the whole package is being squeezed into something that looks like a school curriculum rather than a package of childcare for children.
As my central plank, I raise a specific problem in the voluntary sector, where to ensure the development of children in specialist settings, particularly those with disability, even greater flexibility, imagination and funding are required. Under statutory guidance, providers are not allowed to charge top-up fees for extra time. When this is for extra help for a child with special educational needs, it seems that local authorities vary in how they respond to this guidance. I have direct experience of this problem as a patron of a charity called TRACKS autism, and I declare an interest. It provides specialist early intervention for children aged two to five with an autistic spectrum condition. These children are challenging in the extreme, but there is clear evidence that early intervention yields significant long-term benefits which enable many of them to integrate into mainstream education with obvious benefits to the state which does not have to provide places in special education settings.
In the case of TRACKS autism, more than 58% of the children attending have been able to receive ongoing education in a mainstream setting, which is a pretty good track record. Autistic nursery-age children need extra staff with extra training, ideally one to one, to provide the necessary level of care, education and safety. This works with demonstrable long-term benefits, but it needs to be paid for. The same principle applies to most children with special needs.
Many parents and carers of these children are invariably hard pressed, and although in many instances they receive extra state funding because of their child’s special needs, they are prevented from spending it on the extra level of care their child needs in a nursery setting. This is unjust and illogical, just as it is to expect nursery providers to have the extra levels of staff and care required for special-needs children without access to extra funding. The original legislation, which I was involved with in 2006, was intended to prevent private providers adding costs to increase profit, and it has had unintended consequences. We need to take this opportunity to correct the wording of the legislation or the regulations to ensure that parents are able to choose to pay for extra levels of nursery care where the top-up charges clearly and solely relate to a child’s special needs and to providing the appropriate level of staffing such children require where it is not paid for in a local authority grant. What would be best would be for the local authority to pay the proper charges for these children and meet the total cost.
TRACKS autism has an outstanding Ofsted rating, but more than one in four two year-olds—28%—is attending settings delivering free entitlement to early education that have not been judged good or outstanding. We do not know how much this is due to continual funding problems, but early education and childcare provision should be of a quality to narrow the gap for the most disadvantaged. According to the briefing from the National Children’s Bureau, 60% of parents of disabled children do not believe that childcare providers can cater for their child’s disability. How will the Government ensure that providers can provide not only the hours but the quality to enable a parent to go to work without anxiety about what is happening in the placement? Will the Government be developing a strategy for expanding and improving the quality of provision as well as its numbers?
I hope there will be enough time in Committee to look at how the 30 hours will be packaged. The noble Baroness, Lady Pinnock, and the right reverend Prelate the Bishop of Durham mentioned that there is a variety of need. We need childminding, wrap-around hours and out-of-mainstream hours and to see how the needs of each child will be met. A mum goes to work at eight and gets home at six at night and therefore will need more than one provision during the day. Babies and two year-olds will need to be placed where they can get sleep and rest, so we will need different kinds of training.
Giving parents the right to work at any cost to a child’s development is simply unacceptable, but to take away financial burdens and give parents childcare choice and quality would make a real difference to the lives of working families, which is why I support the Government’s intention and will work as best I can with the Minister to ensure that this legislation goes forward.
Baroness Stedman-Scott (Con)
My Lords, I am pleased to speak on the Bill. I applaud the Government for bringing it to the House, as it is so important for working families, but also, most importantly, for children. The Bill honours the Government’s manifesto pledge to provide 30 hours of free childcare for working parents of three and four year-olds. We all know the value of work and its importance for the financial stability of households, as a result providing a more secure environment for families and children. I thank the organisations that have provided briefings on the Bill. From what I can see the issues raised are broadly consistent, and I am sure that by now the Minister will understand where his homework on the Bill needs to be done.
Rather than me setting that exercise, I will give my view of what the Bill needs to do. While increasing the capacity of childcare provision, we need to ensure that quality is delivered consistently across the country; the increased capacity can only be achieved by investing in a highly skilled and motivated workforce; and we need to make sure that the review of cost and funding required to do the job properly will be undertaken and measured in the way we contribute to that in every sense. The Government are making a huge commitment to double free childcare from 15 hours to 30 hours, which will be a real help to working families. That will generate some long and intense debates in the consultation period and will help the Bill in its passage through the House.
When introducing Bills such as this, I expect that there is an element of “not being able to do right for doing wrong”. I have been involved in a number of things where people have almost set the answer before the questions have been debated. Therefore, as questions have already been asked about the lack of detail, I congratulate the Minister on setting out the Government’s intention to consult with parents and the childcare sector on how the extra hours will be delivered and funded. With added input from this House, I am sure that the detail will become clearer.
I was disturbed to read in the briefings I received from Save the Children that one in four children arrive at primary school with poor language and communications skills, which rises to one in three children in the poorest communities. As we all know, that has a knock-on effect, because it leaves children in a position where they struggle to progress at school, and if it is not dealt with it has a further negative impact on their continuing educational attainment and working lives. I understand that almost half of independent nurseries do not employ a single early years teacher. Such a role would go a long way to help with the development of language and communication skills. Therefore, can the Minister say whether that issue will be given due consideration in the review of quality and funding? We all know and sign up to the value of early intervention, and such an investment at this stage in a child’s life would generate significant returns and save costs further down the line.
Another point, which was already raised by the noble Baroness, Lady Howarth, is that we must ensure that childcare services for children with special educational needs and disabilities are given due consideration in the Bill. I understand that many childcare providers give excellent services to children with special educational needs and disabilities, and I know that all of us want to see those standards of excellence consistently provided across all provision. I hope that we can work to get the Bill to do that. Can the Minister ensure that that will be an important part of the review?
I support the aim and principles of the Bill and look forward to the dialogue that we will have as it progresses. I hope that we will all be mindful of the opportunity we have to increase and improve the childcare that children will receive as a result of the Bill.
Baroness Massey of Darwen (Lab)
My Lords, I thank the Minster for setting out the Bill and for meeting with Peers yesterday. I have the greatest respect for the Minister, and hope that he will be able to convince the Government that there are a number of issues, already eloquently stated by other Members of this House, which need to be resolved before the intentions of the Bill can be achieved—intentions which I support. However, any Bill, especially a Bill with “child” in the title, must reflect, as set out by the UN Convention on the Rights of the Child, that the welfare of the child is paramount. Frankly, I see little mention—in fact, no mention—of the child in this Bill at all; I see it only in the Minister’s letter.
I return to the Bill as it stands. I want to reinforce two initial general points. First, if the Government want to improve the system of childcare, they need to look at the whole system of childcare, not just the employment of parents. Much work is needed to be done on the Bill, and soon. My second general point is about the publishing of information by local authorities. Before information can be published, it must be reliable, clear and accurate. At the moment, childcare systems are not clear and parents can be confused. I shall say more about this shortly.
A great deal of work has been done on analysing childcare needs, by government departments, the voluntary sector, Ofsted and recently by a much quoted Select Committee on Affordable Childcare—ably and, if I may say so, superbly chaired by the noble Lord, Lord Sutherland—of which I was a member. The committee reported to your Lordships’ House in February but, somewhat surprisingly, we have not yet had a government response. When can we expect one? The Ofsted early years annual report will be published in July, and we need to look at that carefully as well. There is evidence both of good practice and of concerns. How will the Government take these concerns and good practice into account?
I want to reflect on some of the issues mentioned by those who were witnesses during the Select Committee sessions—there were 80 witnesses. All those concerned about childcare agree that childcare has two functions: one is to improve the life chances of children, particularly those in deprived areas, and the other is to help parents into employment. We cannot simply get more parents into work, and children into an extension of hours, without looking into the quality of childcare. The Select Committee learnt from more than one witness that deprived areas have the most substandard childcare, and that schools in general provided better early years education than other settings.
The committee states in its first recommendation:
“We share the concern expressed by our witnesses about the lack of coherence in the Government’s … objectives for childcare”,
and that there was no evidence that the Government acknowledged,
“the trade-offs necessary to achieve the separate strands of policy—improving child outcomes, narrowing the attainment gap, and facilitating parental employment”.
The system is bureaucratic and difficult for parents to negotiate. Funding is complex and the quality of care is uneven. Some 28% of two year-olds in free childcare, for example, are in settings that have not been rated good or outstanding by Ofsted. Most of those settings are in areas of deprivation. I think that 28% of children in inadequate childcare is rather a lot of children. The funding system should certainly be simplified. The committee saw the potential for using the new tax-free childcare scheme as an opportunity for a single mechanism for childcare subsidy. What options have the Government considered?
On reducing the cost to parents, the committee concluded that,
“in light of the evidence … an extension of the free early education entitlement would be unsustainable for the PVI sector”,
as others have already mentioned. Providers would not be able to,
“recoup the losses made on the delivery of free early education places if these were extended to 25 hours per week”,
as my noble friend Lady Andrews also said. The Government need to spell out as a fundamental issue the costed element of the Bill, as well as how the quality of child welfare and education will be guaranteed within those costings.
The Select Committee, in fact, recommended that,
“the Government should reconsider the current allocation of resources”,
and,
“consider whether the evidence supports targeting more resources at those children most likely to benefit”.
Has this been, and will it be, considered? A lack of coherence, a lack of detail about funding and a lack of priorities already make me think that the Bill needs a great deal of work—as the noble Baroness, Lady Stedman-Scott, said, a lot of homework.
I have talked about quality and systems and I now want to turn to some confusions, which I share with others, including the noble Baroness, Lady Howarth. Who is the Bill for? Is it, as stated, for working parents, where all parents in a household must be earning the equivalent of eight hours a week at the national minimum wage? How does this square with Clause 1(12) of the Bill, which states that the term includes,
“any individual who … has parental responsibility … or … care of the child”?
For example, would it apply to a 65 year-old non-working grandparent who has charge of children due to the incapacity or death of their own child and needs childcare for their own welfare—I almost said “sanity”—and that of the child or children? Who will be responsible for delivering the content of the Bill? What will be the future role of local authorities, as mentioned before, and the Secretary of State? The Bill includes powers to allow the Secretary of State to establish a body corporate to fulfil the duties under the Bill. What exactly does that mean? How will it be used? Are there terms of reference for reviews or task forces? If so, what are they?
As I said earlier, the information needs to be clarified before it can be provided. Parents and others must be made aware of entitlements. Under the Childcare Act 2006, local authorities must establish and maintain a service offering advice and assistance. I understand that not all family information services are providing information about childcare. Children’s centres could be a good source for supplying information and advice, but they have been closing at a fearful rate—800 in the last few years, a drop of 35%. Where is the information and advice to come from?
There is no mention in the Bill of parents who have disabled children or children with special educational needs, as was discussed earlier. The parliamentary inquiry into childcare for disabled children in 2014 found evidence that the system is not working well. There is a huge lack of provision and parents are struggling to access entitlement to free early education. This is of course a barrier for those wanting to go to work. The Government must recognise and take account of additional costs to support the needs of disabled children, as well as the fact that the workforce and facilities are often not equipped to deal with disabled children or children with special needs.
Will the Government examine the system of delivery of childcare? Liz Truss, when a Minister, posed the question of why schools could not be open for longer hours, providing after-school and nursery childcare. The Select Committee heard of local “hubs”, as they were called, where childcare might be partly in schools and partly in the private, voluntary and independent sector. What would the financial implications of such a service be? Have the Government looked at various models of delivery and costed them?
I have, like others, posed many questions. We may all be in favour of increasing free childcare, but costs and an analysis of the options are important. Will the Minister, with his care about child development, urge the Government to provide a comprehensive review of childcare and to resist piecemeal approaches? Children deserve the best-quality system, but we do not have the best possible system by any means. The Bill pays little heed to that fact. Work needs to be done before the childcare system can best serve parents and children. I look forward to working with others to help produce that better provision.
Lord Browne of Belmont (DUP)
My Lords, I broadly welcome this Bill and the commitment that the Government have made to provide free childcare for children under compulsory school age. This commitment should go some way to help families.
In expressing general support for the Bill, I want to ask the Minister what parallel provisions will be made for one-earner couple families with pre-school age children. One-earner families face a number of challenges when compared with other families. In the first instance, they bear a higher proportion of the tax burden in the United Kingdom than is the case across the OECD countries on average. International comparisons based on 2012 figures reveal that, on the OECD average wage of £35,883, the tax burden for a single parent with two children is 34% higher than the OECD average; similarly, the tax burden for one-earner married couples with two children is more likely to be 45% higher. How is this fair?
In the second instance, the way in which the Government have sought to help families, through raising the personal allowance, is not in the best interests of one-earner families. Although policies that raise the personal allowance are good for both single people and two-earner families, personal allowance increases only perpetuate the difficulties that one-earner families with children face. This is primarily because one-earner families are unable to take advantage of two personal allowances. For instance, how is it fair that a couple family with two children and a household income of £40,000 that comes from one income pays far more tax than the couple family next door with two children and an identical household income of £40,000 through two incomes of £20,000 each?
In the third instance, life has also become more difficult for one-earner couple families through the introduction of the higher income child benefit charge. This charge means that, once the main breadwinner’s income is above £50,000, the family’s child benefit entitlement will be eroded, and then removed entirely once that income reaches £60,000. This is despite the fact that some families in the poorer 50% of the population will be caught by this charge. For example, the one-earner couple family with four children on a household income of £50,000 will be in only the fourth decile of income distribution. By contrast, the household income next door can rise to nearly £100,000, if both parents work and earn just under £50,000 each, and they will keep all their child benefit. The family that gets to keep all its child benefit will be very much in the top half of income distribution. Again, how is this fair?
In this context, I have to say that the provision of yet another innovation that will further assist two-earner families, and by definition thereby leave one-earner families in a poorer position, is seen by many as compounding an existing injustice. Indeed, it has been suggested by some that there is a concerted effort to try to convert all one-earner couple families into two-earner families without regard for those who want the freedom to be one-earner couple families, certainly before their children are in school.
The charity Mothers at Home Matter has said that,
“many parents would prefer to care for their children themselves if they could afford it and this vital element appears absent in all the debates on ‘affordable childcare’… the government, in supporting double earning families with tax allowances and subsidised childcare while at the same time disadvantaging single earner families is urging women to choose their career above their family”.
The early years report from the Centre for Social Justice notes that the Government’s narrow focus on subsidising formal childcare, without parallel policies that increase choice for those parents who want to spend more time with their children or use other forms of care, means that choice is increased only for some and many parents feel even more pressurised to return to work.
The social policy charity CARE, meanwhile, has said:
“The message communicated by this lopsided policy is that a child’s time with their parents is irrelevant to their well-being and healthy development. Our relational experiences in childhood dramatically impact on how we behave towards one another in all aspects of life. It is the quality of relationships that ultimately define our society. Thus young infants require secure attachment, physical contact and physical affection”.
It is important for taxation policy to recognise that not all stay-at-home parents remain at home because circumstances mean that they cannot access the employment market when they would otherwise like to. While it is true that this may be the case for some, it is not so for all families. Some families choose to have one parent staying at home looking after the children because this arrangement works for them. This choice must not be taken away from them. Many families suggest that they would like to retain this option or, in other cases, access it for the first time. In a 2010 survey conducted by the parent organisation Netmums, it was revealed that they would like better support to stay at home with their children when they are small. Of the 5,900 members who completed the poll, 57% of mums would like to see this.
Families also choose to have one parent staying at home with the children because they feel that it is better for the children. Research by Sigman examined the mental health of teenagers who attended day-care centres when they were children, and of those who received care at home. The research showed that at the age of 15, centre-based day-care children were more prone to stress. Similarly, research carried out by Stein and others associated poor child behaviour with low maternal care giving, more time spent in day-care centres and more time with child minders.
Mindful of this and the need to keep the rights of the child pre-eminent, I was particularly disturbed to note that on page 6 of the report of the House of Lords Committee on Affordable Childcare it states:
“Many of our witnesses acknowledged the trade-offs inherent in a policy which seeks on the one hand to promote child development, and on the other hand to facilitate parental employment. For example, cheap, low-quality childcare might help parents to work, but it would not meet the Government’s child development objectives. There is therefore an inherent tension which must be managed; hard choices have to be made. No evidence was presented to us to suggest that the Government formally recognised the need for such trade-offs”.
Whatever one makes of the childcare argument—I recognise that there is also research which shows that children do just as well in professional, centre-based care, although this tends to be intensive and expensive—we should not try to press one-income families into becoming two-income families if that is not their choice.
It is important at this stage to recognise that the way in which we now recognise marriage in our income tax system—a hugely important provision on which I warmly congratulate the Government—has helped many one-earner families. While this provision is welcome, it is limited, in that at its current level it does very little to address the substantive disproportionate tax burden on such families. I ask the Minister to assure the House that it is not the Government’s intention to compound the way that one-earner families are currently disadvantaged by introducing a Bill with no parallel provisions to help them.
I was extremely encouraged to see that the Prime Minister committed to increasing the transferable allowance in an interview with the Telegraph on 28 March. I hope that this proposed increase will constitute an important component of the Government’s efforts to support one-earner families going forward. I look forward to the Minister’s response.
Lord Suri (Con)
My Lords, it is a noteworthy effort of the Government that, within a few weeks of being in office, they have embarked on discharging their duties and, in that context, I welcome this Bill. The Childcare Bill is important because we promised it to the people of the country; hence it is an issue that must be dealt with. Although it means spending more right now, investing further money into this policy has many long-term socioeconomic benefits. Childcare is, primarily, a parental responsibility and in difficult circumstances the Government provide the necessary assistance. A child is the foundation and future of our human race and its survival is of the utmost necessity. It is, indeed, the great determination of working parents to have jobs and maintain childcare alongside.
The current help of 15 hours of childcare for working parents is not enough and providing more is merited. The contribution of working parents plays a multi-faceted role towards the development of our country. Implementing the Bill will improve our financial security; more people working for longer hours means more money is coming into the country. Looking at the bigger picture, it will allow hard-working parents to support their families without the worry of paying large amounts of money for childcare, which they may not be able to afford without this Bill.
Providing parents with accessible childcare gives them the option to work more and, perhaps, receive better jobs and a better income for their home. This increases the number of people who are able to have a more stable and comfortable life due to financial security: free childcare aiding the reduction of families’ overall expenses. Having both parents working is beneficial to the child’s upbringing and to see both mother and father working allows present and future generations to know that both women and men can have successful careers while raising a family. Clearly, the more people that Britain has working, the better. The Bill will help more families to work and improve the economy, and will be especially beneficial to children of households where a single parent is the sole provider for their family.
Entitlement to education is also a key aspect of the Bill. Providing children with early education, right from the age of two, allows for the gap to be narrowed between those who are disadvantaged and those who are not. This narrowing of the development gap will allow the younger generation to be more educated and hence, in the future, more people will be able to work with better-paid jobs.
Implementation of the childcare policy will help to deal with the increasingly ageing population in Britain, which is causing a 4:2:1 ratio within families—everyone in the new generation will have to look after their elders in the previous generations. This dependency ratio is unbalanced and each person will have to work to provide an income to cover six others. The childcare policy is likely to encourage couples to start a family and hence aid the creation of a more youthful and educated population. It was this Government’s constructive planning and foresight to include childcare in their electoral commitment. We must support this Bill to ensure that it is put into practice and I hope to see it go through very soon.
Baroness Tyler of Enfield (LD)
My Lords, like many noble Lords today, I welcome the intent of this Bill to extend free childcare from 15 to 30 hours a week for the three and four year-olds of working parents. I am hopeful that this policy will help to achieve the important aim of supporting more parents in returning to work. In particular, it may help single parents return to work or add more hours without being out of pocket by having to pay for additional hours of childcare. I am also pleased to see that the Bill will improve parents’ access to information about available provision in their area as this will allow them to make more informed decisions about childcare. I add my thanks to the Minister for making his time available for a valuable briefing session yesterday.
I had the privilege of sitting on the Lords Select Committee on Affordable Childcare, about which we have heard much this afternoon. Noble Lords will hear a little more from me. It was very ably chaired by the noble Lord, Lord Sutherland, who has already spoken compellingly today. He made it clear that one of the committee’s primary findings was that, for some years, childcare policy in England has sought to achieve and reconcile multiple and sometimes conflicting aims, with the result that policy has sometimes felt quite muddled and confusing. The goals to which the noble Lord, Lord Sutherland, and others alluded essentially are threefold: namely, to promote child development for all children; to help narrow the attainment gap between advantaged and disadvantaged children; and to enable more parents to work. Those are all laudable aims but can often pull in different directions. As so many noble Lords have said today, the Bill appears to address only the last aim.
I was proud that the Select Committee, which comprised Peers from all Benches, as Select Committees do, agreed that the overriding priority should be given to providing high-quality early education to disadvantaged children as they are the most likely to receive the greatest benefit, and that this priority should be reflected in the way in which resources are allocated. That is where I shall focus my remarks today. There is tremendous potential for high-quality childcare to help disadvantaged children achieve better educational attainment and greater lifetime earnings, and to help break the cycle of intergenerational poverty.
The Select Committee’s report states:
“High quality early education has a crucial role to play in helping disadvantaged children to reach their full potential … Greater value for money in terms of child outcomes is obtained by investing in early education for this group, than for all children”.
Given this, I am concerned that, in focusing on the aim of supporting working parents, the Bill fails to address these critical issues. Its silence on these matters raises many questions, which have already been covered. However, I will briefly give my thoughts on them. What will be the impact of the extension of hours on the quality of early education provision and child development? What are the implications for the early years workforce? How much money will be needed to ensure that all hours, including the existing 15 hours, are properly funded and where will that money come from? Will additional resources be offered to the disadvantaged, as recommended by the Select Committee, or will this be a flat-rate scheme that, in effect, favours the better off?
If the Government really want to support child development and improve outcomes for disadvantaged children—I am certainly not suggesting that they do not—surely they must ensure that the Bill not only leads to more childcare, but provides early education provision of a higher quality than is currently provided. As things stand, disadvantaged children are particularly likely to receive childcare of an insufficiently high quality. For example, 28% of disadvantaged two year-olds taking up their free entitlement attend settings that have not been judged “good” or “outstanding” by Ofsted. As we have heard, this is largely because private, voluntary and independent childcare providers in deprived areas are less likely to be rated “good” or “outstanding” by Ofsted than equivalent settings in more affluent areas. We know that disadvantaged children are very likely to receive their entitlement from these very providers. Indeed, 60% of three year-olds and 96% of disadvantaged two year-olds access their entitlement through a PVI setting.
As the Select Committee report said very clearly, it really is a false economy to provide these children with early education but fail to ensure that the care that they receive is of sufficiently high quality to achieve those better outcomes. Hence my concern, which is shared by so many other noble Lords, that the Bill is silent on what will be done to ensure that early education entitlement will be of sufficiently high quality. I say “sufficiently” because I recognise the trade-offs that need to be made between affordability, availability and quality—again, other noble Lords have referred to that.
It is important to make it clear that PVI settings often struggle to provide high-quality childcare largely because they are currently underfunded. As we have already heard, the Pre-School Learning Alliance has estimated that private, voluntary and independent providers currently face a total funding deficit of £177 million. Given the underfunding of the existing 15 hours, some organisations, such as the National Day Nurseries Association, have expressed concerns about how the Government propose to fund the additional hours. According to the National Children’s Bureau—I declare an interest as its president—the figure widely reported in the press of £350 million of additional funding, while welcome, will not be enough.
In view of those substantial concerns about funding, echoed by so many noble Lords, I genuinely welcome the Government’s plan to review funding arrangements with a view, as I understand it, to increasing the hourly rate to providers. That will be very welcome. I sincerely hope that that will allow us to make progress towards ensuring that all settings are properly funded. In particular, it will be critical that the current underfunding of the PVI sector is not in any way exacerbated by the increase in hours. I hope that that gap is reduced.
The Bill is curiously silent on how the Government will ensure that the early years workforce has the qualifications necessary to deliver high-quality provision. Disadvantaged children are especially likely to receive their entitlement from staff with lower qualifications. Although graduate leadership is widely acknowledged as the key factor helping to narrow the gap in quality between settings in advantaged and disadvantaged areas, we know that in the 30% most deprived areas only 10% of early years staff working in the PVI sector are at a graduate level. That compares with 35% of those working in nursery schools.
It is welcome that qualifications in the sector as a whole have been steadily rising—a point that the noble Lord, Lord Nash, made in his opening remarks. However, the additional pressure of the proposed extension of hours may make it difficult for the sector as a whole to recruit and train qualified employees. Therefore, and echoing the recommendations of the Select Committee report, I urge the Government again to consider implementing the recommendations of the Nutbrown review to help support the sector in raising qualifications over time. I ask the Minister to say something about this in his concluding remarks. Specifically, will he commit to develop an early years workforce improvement plan as part of the programme to expand the free childcare offer?
Given all these factors, if the Government really aim to improve outcomes for disadvantaged children through their childcare policy, they will surely need to take additional steps to ensure that this happens in practice. It is clear that a flat-rate scheme will not do enough to make up for the hurdles that disadvantaged children already face. The Bill does not make any special provision for disadvantaged children. Without going into any detail—I accept that a funding review will take place—will the Minister say whether in principle the Government intend to direct additional resources to the most disadvantaged children?
The Bill does not address how it will ensure that all children are able to access their full entitlement with regard to the availability of childcare places. Many local authorities are still struggling to provide an adequate number of places for disabled children. In fact, only 28% of local authorities reported that they had sufficient childcare for disabled children. My concern here is that the current funding of the universal hours fails to take into account the additional costs of caring for disabled children, and the pressures already imposed on the childcare workforce make it difficult for them to gain the skills necessary to work well with disabled children. As a consequence of this, we know that too many parents who would otherwise like to return to work cannot do so. Eighty-eight per cent of parent carers of disabled children who do not work said that they would like to return to work and 83% said that the lack of suitable childcare was their main barrier. Therefore, what provisions are being made to ensure that all children, particularly disabled children, will be able to access their full entitlement?
To conclude, I welcome the Bill’s stated intent but, as has been made abundantly clear in today’s debate, many crucial questions remain unanswered. There will be much work for this House to do in its detailed scrutiny to ensure that the Bill addresses head on the questions of funding, quality, workforce development, capacity in the sector and, indeed, flexibility—a point made very cogently by my noble friend Lady Pinnock. That adds up to the overall workability of the Bill. From where we start today, with what I politely call a very slim Bill, I feel that that is a big ask. However, the Minister has a very strong track record in improving Bills out of all recognition from the shape in which they started their parliamentary passage. His skills will be much needed on this Bill.
Lord Touhig (Lab)
My Lords, some Second Reading debates attract a very large number of speakers. We may not have had a very large number today but, my goodness, we have had contributions of the highest quality. The Minister should consider himself a lucky man to have such knowledge and experience from all sides of the House to help him make this somewhat thin Bill, lacking in detail, a better one.
Like my noble friend Lady Jones of Whitchurch, I give the Bill a welcome—but, like her and many other noble Lords, I give it a very conditional welcome. The Bill stands before us in gargantuan splendour, all six clauses testimony to the titanic venture the Government intend to embark on. There is just so much room for comment—although, sadly for the Minister, this is by virtue not of the thorough and comprehensive nature of the Bill itself but of the conspicuous absence of much of what it purports to be. It is a missing Bill. Its objectives are worthy and noble, but in 20 years’ service in this House and the other place I have never seen a Bill so lacking in detail and so dependent on secondary legislation to give its ambitions practical meaning and outcome.
The noble Lord, Lord Norton of Louth, has written in many academic accounts of this House that our essential function is to act as a scrutinising body for legislation that passes through the Houses of Parliament. But I ask the Minister: how can we carry out this crucial function if we are given very little to work with by the Government? With so much of the Bill covered by regulation that we have yet to see, we are completely in the dark as to how this measure will achieve its objective. So far as the regulations are concerned, despite many attempts to solicit information from the Government, answer came there none.
The Government must understand that if they want to get this flagship piece of legislation on to the statute book, we must see the regulations and have an opportunity to consider them in the context of the Bill. I am convinced that the Minister understands that, although after our very useful meeting yesterday with him and his colleague, the Minister for Childcare and Education in the other place—for which we thank him—it is clear to me that his colleague needs a crash course in understanding how this House works. An example is the funding review. It was only yesterday that the Government issued their call for evidence to be submitted to their review on the cost of providing childcare. Responses have to be submitted by 10 August. Perhaps the Minister can outline the timetable for digesting and publishing the findings. He has spoken of the autumn, but the autumn is a long period: when in the autumn? We had an assurance from the Minister yesterday that the findings will be made public.
We know that the Government want to take legislation through both Houses, gain Royal Assent and pilot the scheme next year, prior to its full launch in 2017. They have precious little time. Charities and sector bodies have stated that funding underpins the central needs of childcare provision, ensuring that it is both accessible and satisfactory. There has been no serious indication on the part of the Government that they acknowledge the necessary trade-offs between cost and quality in childcare. It would be a disappointing outcome if the Government were to continue on a path that would stretch limited resources and undermine conditions of good care in order to push more parents into the labour market.
This Second Reading debate has had one key characteristic: an almost endlessly repeated request for more information. The Minister and his staff will be working overtime to answer so many questions by the time we get to Committee. I have a few more for the Minister. There is already a lack of childcare for disabled children. How will the Bill help this? Together with the noble Baroness, Lady Eaton, I was a member of the Parliamentary Inquiry into Childcare for Disabled Children, which found compelling evidence that policy developments to improve the affordability and quality of childcare provision have to date failed to take into account the reality of childcare for disabled children. The inquiry found that disabled children are being denied the opportunities for educational and social development that non-disabled children enjoy, and that parents are being denied the same opportunity to choose to return to work.
The case for a concerted government plan to tackle the inequality faced by this group is a strong one. The scarcity is caused by two major factors: a lack of consistent funding to meet the additional costs of providing childcare to disabled children; and a workforce that is poorly qualified to provide quality childcare. Without addressing these issues, it is likely that disabled children will continue to be disadvantaged by childcare provision that does not take account of their particular needs. This is a question of equality. If we are introducing a new entitlement, we must ensure that it is accessible to all children and that the settings are properly supported so that they can include disabled children with additional needs.
On other matters, how will the Bill ensure that more trained and qualified staff will be available? How will capacity through recruitment and retention be improved? Almost half of independent nurseries do not employ early years teachers. How will this help incentivise nurseries to employ them? How is the impact of childcare on child development being measured? The Bill’s clear objective is to enable parents of young children to find and remain in work—a point made by the noble Baroness, Lady Pinnock. There is nothing wrong in that, but an investment of tens of millions of pounds should do more than simply pay for childminding. Surely good childcare should be child-focused, offering learning and developmental opportunities.
We must make sure that standards will not be sacrificed for affordability, that the work interests of parents do not override the development needs of the child and that, ultimately, the poorest and neediest in our society will benefit most from these proposals. I am thinking here of those parents who need to work to provide for their families and those children, such as those with special needs, who will benefit from the proper attention and care.
The Bill will help only those parents in work with childcare. What measures are planned to help those looking for work? The consultation on funding has just been launched. Will it consider the actual cost of childcare? How many providers are already finding it difficult to stay in business? What modelling has been done to ensure that additional hours provided at a payment level which is at best marginal will not drive more providers out of business? The 30 hours a week will now surely cover lunchtime. Is the cost of the lunch to be included in the free 30 hours? Many providers will not have facilities to provide lunches; this could be a capital cost. Will there be help for this? The noble Baroness, Lady Eaton, made this point.
The level of regulation-making powers that the Bill gives to the Secretary of State is unprecedented for a Bill of this size. Why is this, and when will the draft regulations be published? What plans are there to consult on the regulations and who will be consulted? How are the Henry VIII powers in Clause 2(2)(d) to be justified? Is the Bill being rushed through without sufficient time and preparation?
I will not comment on a lot of the remarks that noble Lords have made, but I will highlight one or two points. The noble Baroness, Lady Pinnock, and the right reverend Prelate the Bishop of Durham highlighted the problems of childcare during holidays. I was discussing with my eldest son this weekend the problems that he and his wife are going to have in the summer finding childcare provision and being able to afford it. The noble Lord, Lord Sutherland, welcomed the pilot projects that will be undertaken. They are worth while. When I sat in the other place, I was for a time on the Public Accounts Committee and time and again we saw government schemes go awry because they had not been piloted—so clearly piloting is a good idea. My noble friend Lady Andrews made an important point about the ability under the regulations for the Secretary of State to set up a quango. She is right that it should be in the Bill and not covered just by regulations.
The noble Lord, Lord True, has been a good friend of the Government. He talked about the Government’s manifesto commitment and aspiration but then warned about a rushed skeleton Bill—one that gives Ministers enormous regulatory powers, which he called draconian. Those were wise words and good advice from a government supporter, and I hope that the Minister and the rest of the Government will take heed.
Ultimately, we are being asked today to pass a hollow piece of legislation. We go into Committee in two weeks to consider—what? Without details of the regulations, the Bill is little short of a blank cheque. The Government are playing a dangerous game and if they are not careful, this cheque will bounce and their creditworthiness on the key issue of childcare will be wiped out. I am sure that that is not what the Minister or any Member of the House wants. It is certainly not what the Opposition are seeking. However, the Government have to wake up and listen.
Lord Nash
My Lords, the debate today has been constructive, heartfelt and highly useful. I thank all noble Lords who have taken part. The contributions made highlight the extensive knowledge and experience of childcare policy across the House and, as the noble Lord, Lord Touhig, said, I am very lucky to have received so many helpful comments. I am delighted that so many noble Lords across the House have offered their support for the aims of the Bill and the Government’s commitment to doubling the entitlement to free childcare for working parents of three and four year-olds. I hope that noble Lords will forgive me if I am not able this evening to respond to all the points made in detail, but I will do my best. I also commit to writing before Committee to all those who have spoken today and I expect to be able to provide further detail on some important issues at that time.
As we have heard today, the first few years of a child’s life are critical to shaping their future development. That is why the current entitlement ensures that all three and four year-old children can access 15 hours a week of quality early education to prepare them for school, improving their life chances. It is the Government’s intention that extension of the free entitlement will enable families to make choices about what is best for their circumstances. Doubling the amount of free childcare available for working families will give parents the chance to go back to work or take on additional hours at work—increasing their income but crucially not seeing their childcare bill rise as a result.
My noble friend Lady Eaton and the noble Earl, Lord Listowel, raised the importance of the developmental needs of children and the importance of high-quality early years care. The Effective Pre-School, Primary and Secondary Education project provided highly influential evidence on the benefits of high-quality early years education and explored pre-school as a predictor of outcomes over time for children aged three and four. The project showed, as the noble Earl, Lord Listowel said, that attending pre-school had a positive and long-term impact on children’s attainment, progress and social-behavioural development.
Many noble Lords mentioned quality, which is of course vital. This Government remain committed to driving up quality in the early years. A qualified, high-quality workforce is essential and the Government have helped nurseries to recruit the staff they need through generous funding for early years teacher training. I am pleased that the quality of providers continues to improve. More than 83% of providers are now judged good or outstanding compared with 69% in 2009.
The noble Baroness, Lady Jones, asked, as did the noble Baroness, Lady Tyler, about how the implementation of the Nutbrown review is going. The noble Baroness, Lady Andrews, the noble Earl, Lord Listowel, my noble friend Lady Stedman-Scott and the noble Lord, Lord Touhig, asked about the early years workforce. The workforce is better qualified and better paid than in 2009. We have established more robust qualifications at level 3 and level 6, raising the status of the profession and the quality of provision. We have supported that with bursaries for level 6 early years teachers and support the sharing of expertise and skills across the sector—for example, using teaching skills networks to get private and school nurseries working together.
The noble Earl mentioned Dr Lesley Curtis. She is helping us through teaching school alliances to support quality improvement in private, voluntary and school nurseries. Her nursery school is one of the leading lights in this innovative new approach to schools and nurseries working together. Sir Michael Wilshaw yesterday launched a new common inspection framework, which places a very strong focus on the quality of teaching and learning and improved outcomes for children in all registered early years settings.
The noble Baronesses, Lady Bakewell and Lady Tyler, talked about the importance of childcare for disadvantaged children. We agree and that is why in the previous Parliament we introduced the two-year-old offer and the early years pupil premium, and why the entitlement to 15 hours of free early education is universal for all three and four year-olds. It is important to consider that disadvantage is not a simple divide of working and not working. Indeed, we know that around half of the families who are entitled to a place for their two year-old are working. These families are working hard to support their children and in future will be able to plan ahead to their children turning three knowing that they will be able to receive 30 hours of free childcare a week, reducing their childcare costs and giving them a real choice about returning to work or taking up more hours. We must do all we can to support families out of poverty, as the noble Earl, Lord Listowel, said, and I am delighted that the Child Poverty Action Group has welcomed the extension of the free entitlement, describing it as an “extremely positive move”.
I also take this opportunity to reassure noble Lords, including the noble Baronesses, Lady Bakewell and Lady Tyler, the noble Lord, Lord Touhig, and others, who asked about disabled children accessing this new extended entitlement. I wish to be very clear that parents with disabled children must have the same opportunities as other parents to access the entitlement. Where parents of disabled children would like to go out to work we want to make it easier for them to do so. We are committed to helping families with disabled children and since the passage of the Children and Families Act we have introduced new EHC plans, provided £30 million for families to access independent supporters and given more rights to parent-carers of disabled children so that they have same assessment rights as other carers. I am sure that the funding review will consider significant evidence on the funding issues for disabled children that noble Lords have raised.
The noble Baroness, Lady Howarth, asked about the Government’s position on using private funds to supplement publicly funded early education places. I am happy to meet her to discuss this further. Local authorities have a statutory duty to secure early education places free of charge for two year-olds from low-income families, looked-after two year-olds and all three and four year-olds in their area. It is an important principle of the early education entitlement that access to a government-funded early education place is not conditional on the payment of any fee or the purchase of additional hours or services. This would be a significant financial barrier for many families and we do not want any child to be prevented from accessing the benefits of early education.
The noble Baroness, Lady Howarth, asked about providers working with children with additional needs. Local authorities have the flexibility to pay a higher rate to providers working with children with additional needs, in respect of the additional costs of meeting those needs, in order to ensure that all eligible children can take up their fully funded early education place. The Government are reviewing the cost of providing childcare and have committed to increasing the average funding rate. We want this new entitlement to be available to all eligible parents who want to take it up. As I have said, the review will take a broad look at the costs of providing childcare for all children and will therefore include children with additional needs.
I am pleased that noble Lords have welcomed the clarification that “working” will be defined as the equivalent of eight hours per week, will include self-employed work, and that lone parents will be able to access the entitlement. Further, more detailed criteria will be subject to consultation in due course, but so far as the point of the noble Baroness, Lady Massey, is concerned, it is not intended to apply to grandparents. However, I must take issue with her on her numbers in respect of the closure of children’s centres. The important point is that we have a record number of parents and children using children’s centres—more than 1 million.
I will deal now with a couple of technical points. The question was raised that the Bill extends to England and Wales but a “qualifying child” of a working parent is a child in England. The Bill, when passed, will form part of the law of England and Wales as a single legal jurisdiction, but Clauses 1 and 2 apply only to children in England, and Clause 3 applies only to English local authorities. This is normal in legislation relating to childcare, since it is a devolved matter and dealt with by the Welsh Government.
My noble friend Lord True, who I know is very well briefed both as the leader of Richmond Council and by his wife—who I understand was Montessorian of the Year in 2011—raised a point about criminal offences. I can assure him that this is intended for serious cases relating particularly to the protection of people’s confidential data, as is the case now for the current provision, and for cases of fraud.
The right reverend Prelate the Bishop of Durham and my noble friends Lord True and Lord Browne raised questions about stay-at-home parents. There is no intention to undermine the vital importance of stay-at-home parents. The formation of attachments at an early age is crucial, and we are supporting stay-at-home parents with the marriage tax allowance and through changes to the pension scheme. My noble friend Lord True also asked whether I would meet the Montessori Schools Association and other providers. I will be delighted to do so, and will discuss this with him. The noble Lord, Lord Sawyer, raised a point about pay rates for early years. We hope that the funding review will raise the average hourly rate.
The noble Baronesses, Lady Jones, Lady Pinnock and Lady Andrews, and other noble Lords raised questions about the overall funding for the scheme. It is imperative that we carefully cost this policy and ensure that we find the right balance between being fair to providers and delivering value for money to the taxpayer. In doing so, there are a number of factors to consider: how many three and four year-olds there will be in the future, obviously; what proportion have working parents; how many four year-olds will have a reception place; how many parents will take up the offer; how many of the 15 hours they will take up; the savings that will result from working tax credits and other subsidies to parents; and, of course, the average funding rate to providers. On the last point, the funding rate is of course central to the debate, and we have taken note of the sector’s concerns. That is why we were the only party to commit to a review of the cost of providing childcare and the only party to commit to increasing funding. As I clarified to the noble Baroness, Lady Pitkeathley, on 3 June,
“our current estimate is that this will cost around £350 million, to be delivered from reducing the tax relief on pensions for those earning more than £150,000 a year”.—[Official Report, 3/6/15; col. 412.]
We want to make sure that funding for providers is sufficient, which is why we committed to the increase in the funding rate.
The noble Baroness, Lady Jones, my noble friend Lord True and others asked about the capacity of the system to deliver this increase. We know that working parents with children use many different forms of childcare, depending on their income, working pattern and the age of their children. It is important now that the market can be flexible in how it responds to the choices that parents wish to make. The market is healthy and growing, delivering childcare through a broad range of providers.
As I mentioned in my opening remarks, our latest figures show that we now have 230,000 more childcare places than in 2009. The UK childcare market was worth £5 billion in 2013-14, and a recent report suggested that demand further increased by over 50% in the current year. So this is a vibrant sector with a demonstrable ability to respond to previous changes to entitlement, as it has to the two year-old offer and the expansion of the three and four year-old offer. But, of course, expansion must be delivered in a way that is flexible and affordable for parents and provides quality. We have committed to consulting parents and childcare providers on how this will be implemented.
The noble Baroness, Lady Jones, asked about primary settings for nurseries, and the noble Baroness, Lady Massey, pointed out that they tend to be of very high quality. Under the free school programme, we now allow applications for primary schools to include applications for nurseries. Although it is true that many primaries may be full, many have capacity; it varies substantially by geographic location. I take the points made by the right reverend Prelate the Bishop of Durham, my noble friend Lord True and others about the specific capacity of certain providers.
The noble Baronesses, Lady Pinnock, Lady Andrews and Lady Bakewell, and the noble Lord, Lord Sutherland, raised important points about the actual costs of nurseries and the question of cross-subsidy, and the noble Baroness, Lady Pinnock, about flexibility. As I mentioned in my opening remarks, a review of the cost of providing childcare is already under way. The reviewers want to see as much evidence as possible, and I encourage interested organisations to respond to the call for evidence. This is available on Directgov, and I will write to Peers with the details of how to find it.
The right reverend Prelate the Bishop of Durham, the noble Baroness, Lady Pinnock, the noble Lord, Lord Sutherland, the noble Lord, Lord Touhig, and the noble Baroness, Lady Bakewell, raised the question of stretching provision over a longer period than 38 weeks. The Bill will allow this, as is already allowed for the 570 hours offered at the moment. Regarding the current 570 hours—15 hours a week—we say in guidance that parents and providers need to be aware that there is no requirement for all early years education to be delivered over 38 weeks. Local authorities should enable parents to take the current entitlement in a pattern of hours that stretches the entitlement by taking fewer hours over more weeks where there is sufficient parental demand and provider capacity. Delivering flexibility for parents is an important principle for government in this Bill and will be important in consultation and in the funding review.
The right reverend Prelate the Bishop of Durham raised a point about providers insisting that parents have to purchase hours during holidays as a condition of getting the free entitlement. We are clear in our current statutory guidance, and therefore in the contracts between local authorities and providers, that the 15 hours of early years education should be free of charge to parents. We do not want to see conditions or extra costs attached. The Childcare Bill gives us full powers to impose similar requirements, and we will be examining this carefully in consultation.
My noble friend Lady Eaton asked how the provision will be delivered. Obviously these matters will be considered in consultation in the funding review. Specifically, as my noble friend rightly says, local authorities play a very important role. We fully intend and need them to continue to do so. They have delivered a 95% take-up of the current free entitlement, and I look forward to further discussions on the importance of their role.
The noble Baroness, Lady Andrews, my noble friend Lord True and others talked about the pace of legislation. The introduction of the Bill, with a strong duty on the Secretary of State, sends a clear message to parents and providers about the Government’s commitment. They are expecting us to deliver on our manifesto commitment. They will be able to plan in the knowledge that they can expect this further support for working families, and the market can continue to grow in anticipation. Although the detail that will go into regulations is important, so are the primary powers that we are taking. We will listen very carefully to the issues that the House has raised tonight and will raise in Committee, and I will write with further details to support scrutiny in Committee.
By considering and challenging us on the legal framework at this stage, the House will contribute significantly to the shaping of this policy, but it is equally important to take time to consult providers, parents and local authorities before operational details are fixed. We do not intend to proceed at the pace of a “breathless shriek”, as the noble Lord, Lord Sutherland, said, although I have to admit that that sounds to me rather like a contradiction in terms, even for a philosopher.
The noble Baronesses, Lady Pinnock and Lady Massey, along with the right reverend Prelate the Bishop of Durham and others, talked about the thrust of the Bill and the needs of the child. I assure noble Lords that quality will be central to our provision, and in all things my department seeks to put the child first.
The message is clear: this Government are on the side of working people, helping them to get on and supporting them at every stage of their lives. That is why we are pressing ahead with these reforms, so that not a moment is lost in getting on with the task—going further than ever before to help with childcare costs, helping hard-working families and giving people the choice to get into work or more hours, as my noble friend Lord Suri has said. Having the right childcare in place means that more parents can have genuine choice, security and peace of mind when it comes to being able to support their family. As I have said, noble Lords will understand that it is not yet the time to draft regulations. We are committed to substantial consultation with parents, providers and local authorities first. We must take advantage of that, as we must of your Lordships’ expertise.
I am grateful to all noble Lords who have spoken today for their wisdom. As I have said, I will write to them before Committee, and I will set out further details of our plans for consultation and a policy statement of the principles that will inform delivery of the extended offer. I look forward to further meetings with noble Lords—with the noble Baroness, Lady Jones, and the noble Lord, Lord Touhig, with members of the Select Committee and others. I am confident that that will support your Lordships in homing in on the issues, enabling us to benefit from noble Lords’ customary high-quality scrutiny. I look forward to discussing this in more detail in Committee, and I ask the House to give the Bill a Second Reading.