Free Childcare Entitlement

Wednesday 6th September 2017 Commons Chamber

12:48

[Tracy Brabin (Batley and Spen) (Lab/Co-op)]

(Urgent Question): To ask the Secretary of State for Education if she will make a statement on the implementation of free childcare entitlements.

[The Minister of State, Department for Education (Mr Robert Goodwill)]

Thank you very much, Mr Speaker, for allowing this urgent question, which gives me the opportunity to highlight the Conservative Government’s determination to support as many families as possible with access to high-quality, affordable childcare and early-years education. We are investing a record amount: our support will total £6 billion per year by 2020. My Department is committed to ensuring that all three and four-year-olds have access to free childcare. All parents, regardless of their income and employment status, are entitled to 15 hours of free childcare for their three and four-year-olds; take-up of that universal entitlement is 95%. In addition, take-up of 15 hours of free childcare for disadvantaged two-year-olds is rising, and it is fantastic that more than 70% of eligible two-year-olds are benefiting from this.

On 1 September 2017, the Government reached a major milestone in delivering our key manifesto pledge to double the free childcare entitlements for working parents of three and four-year-olds from 15 to 30 hours. Today I have tabled a written ministerial statement updating the House on delivery of the 30-hours offer. By 31 August, more than our targeted 200,000 30-hours codes had been issued to eligible parents wishing to take up a place this autumn; indeed, I can update the House on the figure: 216,384 codes issued. These families join the 15,000 families who are already benefiting from 30 hours of free childcare in our 12 early delivery pilot areas. The independent evaluations of these areas were encouraging, showing that more than three quarters of parents reported greater flexibility in their working life as a result of 30 hours, and more than eight out of 10 childcare providers offering the 15 hours entitlement went on to offer 30 hours.

During the autumn, I will closely monitor delivery of all free childcare entitlements to ensure continued improvements to all our offers for parents and providers. I will continue to work closely with Her Majesty’s Treasury Ministers to ensure that parents can access the HMRC-run childcare service smoothly. The majority of parents have successfully applied using the childcare service, but some parents experienced difficulties accessing the service through the system by the 31 August application deadline. Those parents who are eligible and applied before the deadline will have a code to allow them to access our 30 hours of free childcare. They will not lose out.

I am pleased to report that this is yet another key manifesto pledge delivered for working families.

[Tracy Brabin]

Last Friday, the flagship policy of 30 free hours of childcare for working parents was introduced. It was a policy shrouded in secrecy, misinformation and mayhem, and now is the time for answers.

From the beginning, the application process was not fit for purpose. Parents were unable to get their code, settings were run ragged trying to help parents, and this afternoon parents who have been waiting weeks are still in limbo. The Minister has told us that 216,384 parents have their codes. Will he tell us what proportion that is of all parents eligible for 30 hours? How many parents received compensation? How many parents does he expect to pay out to in total? How many of those children have secured a funded place and how many have not? This is basic information that we should already know.

Experts, providers and parents are up in arms about this lack of funding. The Pre-school Learning Alliance found a 20% funding shortfall and three-quarters of providers said that childcare funding did not cover their costs. Shockingly, 38% of providers do not think that they will be sustainable in a year’s time. To stay viable, settings will charge for extras such as trips out, nappies and lunches in order to pay their staff and keep the lights on. Can the Minister guarantee that he will not allow a two-tier system to emerge whereby parents who cannot afford to pay the extras do not have access to the policy and those who can do?

Despite the Minister claiming otherwise, Busy Bees and the Co-operative Childcare group have now publicly said the funding rates are insufficient, so what is his strategy to keep experienced and talented practitioners in the sector? The Minister used the pilot evaluations to defend funding rates, but the truth is that 30 hours had a negative financial impact on providers, so has he spoken to stressed-out providers facing closure or parents at their wits’ end?

Finally, this childcare has been advertised as free but it is clear that it will be subsidised by parents or providers. This risks pricing out the poorest and top providers leaving the sector. Will he now listen and commit to re-evaluating the policy’s funding?

[Mr Goodwill]

I am afraid that the hon. Lady’s rhetoric does not reflect the experience on the ground. I can update her: we predicted that about 75% of eligible parents would apply to the scheme, as there are some parents who for very good reasons, such as family childcare, would not apply. That figure would have been 200,000, so we have exceeded that prediction. I can confirm that only six days into September 152,829 parents have secured a place—71% of those parents. That is a great success story.

We responded to the sector’s concerns about funding; indeed, Frontier Economics carried out some detailed work for us and reported to the Department that the mean hourly delivery cost of childcare was £3.72 an hour. The amount of money that we are providing has increased from £4.56 to £4.94. My experience talking to nurseries up and down the country, including some in London, is that they can deliver for that price. Indeed, the pilot areas have delivered and some 15,000 children have benefited from 30 hours of free childcare, and the lessons learned from those pilot areas are being applied.

[Robert Halfon (Harlow) (Con)]

I welcome the additional money that the Government are putting into childcare, but may I ask my hon. Friend what help and resource is being given to help childcare providers, particularly the smaller ones that are not part of the bigger chains, that are finding cost pressures difficult with the new policy?

[Mr Goodwill]

We certainly understand that the sector will deliver this for us, which is why we carried out so much detailed work. Indeed, a survey published on 31 August demonstrated that eight in 10 of those providers will provide 30 hours. If we look at the pilot areas that have been delivering for a year now, including places such as York and Northumberland, we can see that 100% of their providers are delivering and 100% of the parents who wanted a place found one, despite some reservations being put on the record by some of those providers at the very beginning. The pilots have demonstrated that we can deliver and we are delivering.

[David Linden (Glasgow East) (SNP)]

We of course welcome any changes that increase free early years and childcare entitlements, but it seems as though the Tories’ policies will do more harm than good. In yesterday’s programme for government, the Scottish National party Scottish Government confirmed that the childcare entitlement will double for all three and four-year-olds and eligible two-year-olds to 1,140 hours from August 2020. The Tories have decided to cherry-pick who receives free entitlement to childcare. The Scottish Government will also take action to enable all childcare workers delivering fully funded early years learning childcare to be provided with the Scottish living wage from August 2020, recognising that there are few more important jobs than working with the youngest children, while this Government are restricting which parents are entitled to the 30 free hours, freezing out those on low or unpredictable hours, and have said nothing about those who work in that sector. Should not the Government heed the warnings of the Social Market Foundation and the New Economics Foundation that this version of free childcare is regressive? Will they look towards Scotland’s vision of childcare based on quality, flexibility, accessibility and affordability instead of creating a two-tier system?

[Mr Goodwill]

I will take no lessons from the Scottish Government, no matter what the hon. Gentleman wishes to read out to us. We have committed £6 billion in this area. We talk about childcare, but this is good quality early years education and 93% of the settings are providing good or outstanding childcare. That is great news for education and great news for those parents who, in many cases, find their working lives transformed by access to 30 hours of childcare.

[Nicky Morgan (Loughborough) (Con)]

This is clearly the right policy and has been demanded by working parents and others up and down the country. The shadow Minister talked about the policy being shrouded in secrecy; I do not know where she was in the general election of 2015, but I think that this is an issue that all parties discussed in many different debates.

Let me ask the Minister about the implementation of the policy by Her Majesty’s Revenue and Customs and the operation of its website. He knows that I, as the incoming Chairman of the Treasury Committee, wrote to the head of HMRC over the summer, who replied on 17 August saying that a total of £45,000 or thereabouts had so far been paid in compensation. Can the Minister update the House and will he confirm that, as he said, those parents who had codes by 31 August will be able to access the childcare this autumn?

[Mr Goodwill]

I thank my right hon. Friend for her question. This is indeed a manifesto pledge that is being delivered. It is no secret that there were some technical problems with the IT system and, indeed, my right hon. Friend the Financial Secretary is in his place listening to what we say. About 1% of cases that applied online were stuck—that is, for a technical reason those cases were not processed. Another group of cases could not have been processed online, and we refer to those as amber cases. Let me give an example: a person who applies for childcare on the basis of a job offer rather than a track record of earning in that job. If we were not to have a manual system as back-up, we would have a Catch-22 situation in which the person could not apply for childcare because they did not have a job but could not get the job because they did not have childcare. In such situations, there is a manual system.

When the Secretary of State wrote to my right hon. Friend, I think 2,200 cases were stuck. The figure I now have is 1,500, but they are many new cases, some of which have only been on the system for about a week. I am sure that the Financial Secretary to the Treasury will write to my right hon. Friend with regards to compensation. A small number of people were affected by the system. The system was operational 93% of the time during which people could apply.

[Lucy Powell (Manchester Central) (Lab/Co-op)]

Has the Minister read the report that I published last week with the Social Market Foundation? It shows that, of the extra money that the Government are pumping into early years over the course of this Parliament, 75% is being spent on the top 50% of earners and less than 3% will go towards the most disadvantaged. This comes at a time when the Government’s own evaluation of the two-year-old offer shows that good-quality early education is life-changing for the families who receive it. Is he happy with this distribution of expenditure? What more is he doing to ensure that low-income and disadvantaged families are accessing this high- quality education?

[Mr Goodwill]

I did read the hon. Lady’s report and some of the press coverage. She is absolutely right that the attainment gap needs to be closed between those from a disadvantaged background and those from other families. We are making progress in closing that gap, which is being closed at a faster rate in London than elsewhere. The 30 hours of childcare is for working families. However, many families cannot get into work because they cannot get childcare, so we will be pulling families out of poverty who currently cannot work because of the extortionate cost of childcare compared to their income. Of course, we still have the offering of 15 hours for the most disadvantaged two-year-olds and the early years pupil premium, which is specifically aimed at helping families most in need—the most disadvantaged families—because we need to close the attainment gap.

[Mrs Maria Miller (Basingstoke) (Con)]

When it comes to childcare, parents want affordability and certainty. Many parents listening today will be very reassured by the Minister’s statement, so I thank him for that. Will he take this opportunity to confirm what proportion of childcare providers will offer the new entitlement? I believe it is estimated to be about 80% of providers. Can he confirm that that is still the case?

[Mr Goodwill]

My right hon. Friend is absolutely right. Not all providers were offering the 15 hours. Of those that do offer 15 hours, about 80% are going to offer the 30 hours. We understand that we might need to increase capacity in some areas, which is why we have made £100 million of capital funding available to provide another 18,000 places for 30-hours placements.

[Layla Moran (Oxford West and Abingdon) (LD)]

I absolutely welcome the policy. After all, it was a Liberal Democrat policy that we started implementing while in coalition so I would like to see it succeed. However, I invite the Minister to come to Oxford West and Abingdon because I am afraid that the suggestion that the policy is absolutely fine and working on the ground is simply not correct. In my constituency, the places are not available and they are being heavily subsidised by early and late pick-up fees, and extra money for nappies and lunches. Those costs simply were not there before. Please will you look again at the funding in different parts of the country? The total figure does not matter. It needs to be available where parents are. Have you looked at this and what are you going to do about it?

[Mr Speaker]

I have not done so and I have no plans to do anything about it, but I have a feeling that the Minister might; we will see. Let’s hear the fella.

[Mr Goodwill]

When we selected the areas for the early roll-out pilots, we were careful to select places that were representative of different parts of the country. For example, York would have many parallels with Oxford. Indeed, 100% of providers delivered that childcare in York and 100% of families looking for childcare got it. I would be more than happy to visit Oxford and see the successful policy being delivered for parents who need it so much.

[Wendy Morton (Aldridge-Brownhills) (Con)]

I welcome the Government’s extra investment in childcare. The availability and accessibility of good childcare can make a huge difference to working families. Does the Minister think that the introduction of 30 hours of free childcare will have a positive and direct impact on the finances of working families?

[Mr Goodwill]

My hon. Friend is absolutely right. Evidence from the pilot areas demonstrates that almost a quarter of women and 10% of men are able to take more hours at work. Indeed, the policy has been transformational in some people’s lives. I heard a story the other day of a family who, during the working week, only really met in the car park of the factory where they work shifts. As the husband arrived with the child strapped into the back of the car, the mother got back in the car and drove home, so they were not able to enjoy time together. The delivery of 30 hours’ free childcare will mean that they will be able to enjoy a better family life. The policy will address the situation of people passing in the hallway as one person comes in from work and another goes out.

[Alison McGovern (Wirral South) (Lab)]

Is it not clear from the contributions of my hon. Friends and from the experience of Busy Bees, a nursery chain that provides a service in Bromborough in my constituency, that these low rates for childcare mean that the market is now fundamentally broken? What will the Minister do if we find, after years of this Tory Government, that they have reintroduced the scourge of low pay into childcare?

[Mr Goodwill]

If the hon. Lady had been listening to the Prime Minister in Prime Minister’s questions, she will have heard that we look carefully at the cost of delivering childcare. As I said, that is £3.72 an hour—much less than the funding we are providing. Busy Bees has 267 nurseries across the country, and is delivering 30 hours. Despite the reservations we have heard, the Co-operative Childcare is delivering 30 hours at its 45 nurseries, including 17 in London, which is one of the most expensive places to do that. Bright Horizons is participating in the scheme with its 296 nurseries. The big chains are participating. I go up and down the country talking to small independent and charitable nurseries and other providers including childminders, and they are also delivering with the funding we are putting in.

[Bob Blackman (Harrow East) (Con)]

I congratulate my hon. Friend on delivering on this election promise, but will he keep the funding arrangements under review, particularly those in high-cost areas? Even in these early days, some constituents have complained to me that there is a lack of availability at a local level. That is driven by the money. Will he keep that under review to ensure that the provision is universally available across the country?

[Mr Goodwill]

My hon. Friend is absolutely right. We are creating a lot more places and that creates demand within the system. I visited a nursery just outside Selby in East Yorkshire that was gearing up to provide more places and hire more staff to provide the availability. We are putting £100 million of funding into the system to provide 18,000 additional places. Many nurseries are investing through their own resources to deliver this policy.

[Liz Kendall (Leicester West) (Lab)]

Children in deprived areas of my constituency start school up to 20 months behind where they should be developmentally. High-quality childcare with properly trained professionals can transform their lives. I urge the Minister to take the Opposition’s concerns more seriously. During the general election campaign, I met several providers who will not be able to deliver the policy. Will he look again and ensure that all children get the very best start in life?

[Mr Goodwill]

I agree with the hon. Lady that it is vital to close the attainment gap between disadvantaged children and other children in our schooling system. Indeed, we have 12 opportunity areas across the country where we are looking at ways of specifically addressing that. One way is better provision for early years, but another is working with parents to improve the home learning environment, which is often so lacking in some families, particularly when they have housing problems to address.

[Kevin Foster (Torbay) (Con)]

Many parents in Torbay will welcome the availability of up to 30 hours of free childcare to support them going into employment, but, as with all policies, the proof of the pudding is in the eating. Regarding the early delivery areas, what evaluation has been done of the number of parents who have taken on extra hours at work thanks to the availability of increased childcare?

[Mr Goodwill]

The raw stats indicate that about a quarter of women and 10% of men took additional hours, but I have also heard from people who could not get into employment at all because of the cost of childcare. A lady I spoke to in York said that the fact that she could now work and take up the 30 hours of childcare greatly transformed her family’s finances and life. The system is very flexible. Families can spread the childcare over more weeks or use different providers, including those in the voluntary sector, maintained nurseries or childminders.

[Alex Cunningham (Stockton North) (Lab)]

The Government cannot hide on this issue. During the Childcare Bill Committee, I and others here and outside Westminster told the then Minister that his plans were full of holes, and so it has been proved. What will the new Minister do to fill the gaps in provision, particularly in deprived areas, where the holes are the deepest and the need is the greatest?

[Mr Goodwill]

I am not going to argue with the hon. Gentleman that we need specifically to target some of our more deprived areas. This policy is designed to help working families, but I am all too well aware that many children in the most deprived families, with the most needs, are not in working families. That is why we have the offering for two-year-olds and the additional help that is going in. We are working very carefully to ensure that we do not leave that group of children out, particularly in the opportunity areas.

[Mr Ranil Jayawardena (North East Hampshire) (Con)]

My elder daughter, Daisy, started nursery this week. From speaking to local parents, I know that this policy will, as the Minister says, help hard-working families take up new employment and additional hours, so it is welcome. I am also encouraged that parents will be able to add to the funding the Government are making available through existing schemes, such as childcare vouchers. However, in support of my hon. Friend the Member for Harrow East (Bob Blackman), will the Minister, as he reviews policy in an ongoing way, consider whether flexibility could be introduced for rural or high-cost areas, to make sure those additional schemes can be used to help parents who wish to do so to top up the funding provided by the Government? Instead of always complaining that there is not enough, let us help parents to look after themselves.

[Mr Goodwill]

I do not want to disappoint my hon. Friend, but we are not in the business of encouraging top-ups. Nurseries are perfectly free to charge for additional hours or for lunch, nappies or other items, but that cannot be a prerequisite to accessing the 30 hours. The Government have a number of other packages, including tax-free childcare and other wonderful policies that the Treasury is making available, to help people afford the cost of childcare. However, this particular policy is great news for parents and great news for children, who are accessing quality childcare and education.

[Danielle Rowley (Midlothian) (Lab)]

I have a constituent who is struggling to pay for childcare because of the way universal credit works. She is a working single mother and is expected to pay for her childcare up front—it is over £800 in her case—and then to claim it back, which does not make much sense to me. The cost is more than she earns from her job, and she may need to give up working. How does this system help people such as my constituent get back into work?

[Mr Goodwill]

This system helps people precisely like that, because it is not a system where people pay and reclaim—the money is reimbursed to the nursery by the local authority. Indeed, staff at one of the nurseries I spoke to in York said that one of the best aspects of the scheme is that they would not have to chase parents for money or, on occasion, withdraw childcare because the parent had not paid their bill. This scheme makes the administration easier for nurseries, which are already collecting the 15 hours’ funding from local authorities. That will exactly solve the hon. Lady’s constituent’s problem.

[Robert Jenrick (Newark) (Con)]

I strongly support the Government’s policy, not least because one of my daughters starts nursery tomorrow. In Nottinghamshire, we have an issue with capacity, and particularly convenient capacity, in rural areas. Parents who commute long distances and who live in villages want childcare close at hand—childminders as well as nurseries. Will the Minister highlight the Government’s childcare business grants of £500 or £1,000, which are available to people who want to set up small businesses as childminders or small nurseries, and will he perhaps consider increasing the grants to a level that enables providers to do more?

[Mr Goodwill]

We have talked a lot about nurseries, but I must make it clear that there is flexibility in this scheme. Indeed, we have 5,500 dormant childminders, who could see this as an opportunity to get back into that business, although I suspect that a number of them may be working in other jobs, and particularly in nurseries, as jobs are created in them. However, this is a flexible system, and I hope the voluntary sector will also step up to the mark and increase capacity in its nurseries—indeed, we could see a number of new nurseries opening because of this policy.

[Julie Cooper (Burnley) (Lab)]

I welcome the principle of 30 hours of free childcare, but it cannot come at the expense of quality early years education, and that is exactly what is happening. Many children in my constituency from deprived communities currently have access to quality nursery schools employing qualified nursery school teachers, and those schools are doing tremendous work to enhance the life chances of those children. Those schools assure me that they will not be able to fund the continued employment of those qualified teachers. It is important that we make a distinction between childcare and early years education. I note that Save the Children also raised concerns about this issue yesterday, maintaining that 40% of those who took part in the pilot areas actually reported a loss in profits and, therefore, a threat to their sustainability.

[Mr Goodwill]

I absolutely recognise the importance of the maintained sector. Indeed, many of the small number of maintained nursery schools tend to be in some of the more deprived areas, where needs are much greater. I would just reiterate the fact that 93% of nursery providers are either good or outstanding, according to Ofsted. That is a great sign of the quality that is being delivered on the ground. More hours will mean better quality education, with children starting school more prepared for it. Indeed, a report in the press today showed that children arrive at school without the necessary language skills and simple skills such as picking up a knife and fork. They will learn that at nursery, and that is great news.

[Lucy Frazer (South East Cambridgeshire) (Con)]

Figures produced over the summer show that female employment rates are at a record high, at over 70%. Does the Minister agree that it is important to encourage and support women back into work and that this policy and legislation do that?

[Mr Goodwill]

I absolutely agree with my hon. and learned Friend, while recognising that some mothers and, indeed, fathers may see caring for their child at home as their priority—sadly, many do not have a choice in that because of the finances of the household. However, this policy is delivering the opportunity for more women to get into the workplace, and I have already heard from women who have taken on more hours or started a job when they could not previously afford to go to work at all.

[Tulip Siddiq (Hampstead and Kilburn) (Lab)]

Last year, in a Westminster Hall debate, the then childcare Minister told me I was scoring cheap political points and should be ashamed of myself when I raised the issue of funding policies and of how nurseries were at threat of closure because of this policy. Recently, a Pre-school Learning Alliance survey said that one in three nurseries fears being driven out of business because of this policy. What action is the Minister taking to ensure our nurseries do not close because of this flagship policy from the Government?

[Mr Goodwill]

I am surprised the hon. Lady has been accused of making cheap political points. I have known her for some time, and she has never made such points to me. I can assure her that we have looked carefully at the costs of delivery. There will be nurseries that, because of their business plan, are not going to deliver 30 hours, but there are nurseries that were not delivering 15 hours —indeed, there is one in my village, which is connected to a fee-paying prep school, that will not participate. However, there will be choice for parents who might want to go for a different type of nursery education—maybe with longer hours, or with different types of trips and other services—that other families might not wish to choose.

[Mr Philip Hollobone (Kettering) (Con)]

I commend my hon. Friend for the way he is responding to this urgent question. For the thousands of working parents who are taking advantage of the 30 hours of free childcare, how much is it worth to them on average, per year, per child?

[Mr Goodwill]

It is worth £5,000. That makes a big difference to a family budget.

[Jack Dromey (Birmingham, Erdington) (Lab)]

All children are entitled to expect the best possible start in life, and parents are entitled to expect help with childcare so that they can go out to work. However, with thousands of parents in Birmingham still in limbo, free childcare that is often not free, providers threatened with going out of business, and the closure of 26 children’s centres in the city, does the Minister understand the grievance expressed by the group of parents I met last week in my constituency, who said the Government are long on rhetoric but are simply letting Birmingham’s children down?

[Mr Goodwill]

The hon. Gentleman talks about letting children down in Birmingham, but maybe he should look at some of the children’s services there and see how they could be improved. However, this policy has been tested up and down the country, in rural and urban areas, and it is great news for parents and children.

[Mr Peter Bone (Wellingborough) (Con)]

Having listened to the urgent question—I congratulate the hon. Member for Batley and Spen (Tracy Brabin) on getting it granted, and the Minister on doing a written statement—I think there is agreement on both sides of the House that this is an excellent policy, and the issue is just the implementation. If there is one Minister in the whole House who will make sure something is done properly, it is the Minister at the Dispatch Box today. Will he give the House an undertaking that he will come back later in the year to update the House on this policy?

[Mr Goodwill]

I certainly will. It must be borne in mind that there are three entry times; it is not like reception year, whereby all children start in September. We are already encouraging parents whose children will have turned three by 1 January—and, indeed, those who will turn three after Easter—to apply early to get on the system. Two more tranches of children will come into the system as it builds.

[Lady Hermon (North Down) (Ind)]

The Minister will be well aware that Northern Ireland has not had a functioning Assembly since January. I want to be reassured that childcare entitlement in Northern Ireland is not falling behind because of the uncertainty over the Assembly, or the lack of it. We have no idea when it will come back. Will the Minister enlighten the House and, in particular, parents in Northern Ireland? Who exactly does he liaise with in Northern Ireland to make sure that childcare entitlement is progressing within the United Kingdom, of which Northern Ireland is a part?

[Mr Goodwill]

I have to confess that I have not liaised with anyone in Northern Ireland on this issue, but I will certainly have a conversation with the Secretary of State, who is well equipped to report on all issues regarding Ulster.

[Huw Merriman (Bexhill and Battle) (Con)]

May I welcome a policy that will assist another 400,000 families and increase the amount of money we are spending to £6 billion? Will the Minister review the position in East Sussex? As a county with a low average wage, we are not receiving as much as Brighton and Hove, which is right on our borders. As a result, there is a concern that staff in the industry will migrate to Brighton. Perhaps in a year’s time, could the Minister assess whether those patterns are emerging and, if they are, commit to look at the issue afresh?

[Mr Goodwill]

I will certainly keep these matters under review. Indeed, I have a meeting with Suffolk MPs either this week or next week, because their funding is different from that in Norfolk, which is always a matter of contention.

[Stephen Lloyd (Eastbourne) (LD)]

I respect the Minister, who is making a valiant effort to defend an outstanding policy with holes in it, the biggest of which is funding. One group who have not been mentioned in this debate is childminders, including those in my constituency, who are highly qualified, are often women, have a level 3 national vocational qualification and have been Ofsted assessed. I have been categorically told by a number of my constituents that the county council funding provided from money given by central Government is inadequate. Many of them say that unless that is remedied they will have to pull out of the business. Can the Minister at least assure me that he will review the whole funding arrangement in the coming first quarter?

[Mr Goodwill]

I will certainly continually keep this under review. Councils are encouraged—indeed, they have committed—to pass on 90%. They have some administrative costs, as I am sure the hon. Gentleman is aware, but we will close that gap as the system matures.

[Michael Tomlinson (Mid Dorset and North Poole) (Con)]

I, too, warmly welcome this policy and the fulfilment of our manifesto pledge and commitment. Dorset was one of the pilot areas to introduce 30 hours’ free childcare, and many parents have welcomed the additional flexibility. May I invite the Minister to re-emphasise that message? The policy provides flexibility and gives both parents the opportunity to get back into work or increase their hours of work.

[Mr Goodwill]

Dorset was indeed one of our 12 early delivery areas, starting in April 2017. I am hearing great news from Dorset and I am sure that my hon. Friend will keep me posted.

[Ruth George (High Peak) (Lab)]

Is the Minister not concerned that more than 60,000 children whose parents applied for a funded place do not have one? How is he going to deliver the policy for those parents, who may have been relying on that funded childcare place in order to take up an offer of employment or to extend their hours at work? This is particularly important in rural areas such as mine. The largest chains of nurseries are better able to spread the costs, but three nurseries in High Peak have had to close their doors over the summer. They are all small, independent nurseries that cannot see a way forward on the funding levels that have been set.

[Mr Goodwill]

That was not the experience in the pilot areas, including areas very similar to that of the hon. Lady. Indeed, we have seen areas where 100% of the providers were delivering and 100% of the parents got places. We are only six days into the school term. I heard that, on Tuesday alone, 8,000 parents got their codes validated with a nursery. Parents will still be looking around and deciding in which nursery to get a place. Indeed, many nurseries will now be considering taking on additional staff to provide more places in those nurseries, given the increased demand.

[Ellie Reeves (Lewisham West and Penge) (Lab)]

How many working parents have been excluded from the entitlement because they cannot guarantee that they will work more than 16 hours a week on the national minimum wage? Does he not recognise that the reality of many working parents in my constituency is that their employers will not guarantee them those hours, so nor can they? That makes it even harder for them to earn and work.

[Mr Goodwill]

I thank the hon. Lady for her question. Before I answer it, may I correct what I said earlier? Ninety-three per cent. of the funding has to be passed on by the local authority in 2017-18, rising to 95% from 2018-19, which is even better news than I gave earlier.

The experience is that someone has to be earning the equivalent of 16 hours a week of the national minimum wage. Many mothers and, indeed, fathers are looking to take additional hours, given that childcare will be available. That is the experience up and down the country.

[Ruth Cadbury (Brentford and Isleworth) (Lab)]

Will the Minister acknowledge that the commitment given by his predecessor at a meeting I held with independent small nursery owners in Isleworth last November has not been upheld? They warned her that the funding for the scheme would be insufficient and they would have to close, reduce the range of services to children, charge high amounts for lunch or cut the proportion of highly qualified staff in their settings. She said, “Don’t worry,” and implied that she would sort the funding, but does the Minister agree that their predictions have proven to be true?

[Mr Goodwill]

We did hear what the sector said, which is why we have increased the funding. Indeed, there will be an additional £300 million a year by 2020 as a direct response to those concerns about the funding levels. We have done a lot of work working out what it costs to deliver, and we are confident that the funding is adequate.

[Karin Smyth (Bristol South) (Lab)]

In July 2016 I asked about progress, as a member of the Public Accounts Committee, given the Committee’s concerns. I asked in particular about work to ensure that local authorities were managing childcare markets effectively and whether there would be intervention if necessary. The then Minister told me that I had asked an important question and then announced the amount of capital. I was grateful for his kind words. It would be a cheap political point to say, “I told you so,” so I am not going to do that. I will simply ask the question again: what work is the Department doing to ensure that local authorities are managing childcare markets effectively, and will the Minister intervene if necessary?

[Mr Goodwill]

We are working very closely with local authorities, particularly on the administration. Indeed, we have given very clear messaging to local authorities: if there are parents who have not yet got their codes because of technical or other reasons, they have to show latitude. Of course, it is not the job of the local authority to manage the market; it is the job of the parents to choose the best provision for their child and for the market to respond to that. That is what we are seeing up and down the country, with increased places being provided in existing nurseries, and new nurseries, I hope, being opened, particularly given the grant funding we have made available for another 180,000 places.

[Michelle Donelan (Chippenham) (Con)]

Does the Minister agree that some Members seem to be glossing over the fact that this pilot has proved that the policy will empower and enable parents either to go back to work or to extend their working hours, which will transform thousands of lives in this country?

[Mr Goodwill]

There are colleagues in the House from places such as York, Northumberland, Newham, Wigan, Staffordshire, Swindon, Portsmouth, Hertfordshire, Dorset, Leicestershire, North Yorkshire and Tower Hamlets, which have been in the pilot for a year. I have not heard a peep from anyone saying that the scheme is not working, so obviously the pilot has been successful.

[Dr Rupa Huq (Ealing Central and Acton) (Lab)]

I must confess that I was something of a secret fan of the Minister, because in a previous incarnation he was very helpful to me with an issue my constituents had. No one is arguing against the idea of 30 hours, but if the picture is as rosy as he paints, how come there are allegations of nurseries forced into bankruptcy and a policy on its knees less than a week in? If people such as those in today’s edition of The Times—a friendly Murdoch paper—are saying that it does not add up, surely it is time to reassess the finances and ramp them up so that the policy is properly funded.

[Mr Goodwill]

We will certainly keep all these matters under review, but the experience from the pilot areas and early deliverers has been that they are delivering on the levels of funding we have put in, and we have responded to concerns by putting in additional funding, with another £300 million by 2020, to make sure that it is more than adequately funded.

[Thelma Walker (Colne Valley) (Lab)]

What does the Minister have to say to the parents of children with special educational needs who cannot access childcare for their children?

[Mr Goodwill]

I am absolutely determined to do what we can to help the parents of children with special educational needs. I have had a number of meetings already, despite my short time in the Department, about ensuring that the money that we are spending is spent effectively and ensuring that parents get the support that they need.

[Lady Hermon (North Down) (Ind)]

rose—

[Mr Speaker]

I will, exceptionally, take the hon. Lady’s point of order now, if she so wishes, because otherwise I will not hear it and I might feel sorely deprived.