Early Years Education Funding

(Limited Text - Ministerial Extracts only)

Wednesday 21st July 2021 Westminster Hall

[The Parliamentary Under-Secretary of State for Education (Gillian Keegan)]

It is a pleasure to serve under your chairmanship, Ms Fovargue. I congratulate the hon. Member for Bath (Wera Hobhouse) on securing this debate. I am grateful for the opportunity to discuss this important topic, and it is great to be joined by the chair of the APPG on childcare and early education, my hon. Friend the Member for Winchester (Steve Brine).

Nurseries, childminders, teachers and parents have continued to support and educate our youngest children, providing crucial support throughout the pandemic. I would like to put on record our continued appreciation for their hard work. Taking a lead from my hon. Friend, I would also like to put on record our thanks to maintained nurseries in particular. I am a regular visitor to Chichester maintained nursery, which does a fantastic job, and I place on record my thanks to Ruth Campbell and the team at Chichester maintained nursery.

The early years experience is, as Members have said, a vital part of a child’s education, developing the cognitive, social and emotional skills that set them up for life. Evidence shows that high-quality childcare supports children’s development, prepares children for school and, of course, allows parents to balance work and family life. We are doing more than any previous Government to ensure that as many families as possible can access high-quality, affordable childcare. Some 96% of childcare settings in England are now rated “good” or “outstanding” by Ofsted. In 2019, 71.8% of children achieved a good level of development at the end of the early years foundation stage profile. That is where children have met the expected level across a wide range of learning areas, and compares to 51.7% in 2013—quite a remarkable achievement.

The Government invest heavily in high-quality early education. That includes the universal 15 hours of childcare for all three and four-year-olds, plus the additional 15 hours for working parents of three and four-year-olds. That was introduced in 2017 under a Conservative Government. The 15-hour early education entitlement for disadvantaged two-year-olds helps to improve the educational outcomes of disadvantaged children, to give them the best start in life. In fact, we have spent over £3.5 billion a year in each of the past three years on our early education entitlements, and we continue to support families with their childcare costs.

At the spending review last year, the Chancellor announced an extra £44 million for 2021-22, so that local authorities can increase hourly rates paid to childcare providers for the Government’s free childcare entitlement offers. At the same time, we increased the minimum funding floor, meaning that no council can receive less than £4.44 per hour for the three and four-year-old entitlements. To maximise the amount of funding reaching the frontline, we require local authorities to pass on to early years providers at least 95% of the Government funding for three and four-year-olds.

Further, we are varying our approach to funding the early years sector over this financial year to give local authorities and providers better certainty about their funding income. For the spring term 2021, we provided top-up funding for authorities that could demonstrate rising demand for free early education entitlements. For the next three terms, we will fund each authority based on attendance data they provide to us for each term. That will ensure that our funding aligns with attendance, which should provide very welcome reassurance for providers that funding for the entitlements will be commensurate with up-to-date data. The last 18 months have been particularly difficult. Nurseries, carers and parents have demonstrated a heroic effort in supporting the youngest members of our society. That is why we have provided significant support to the early years sector throughout the covid-19 pandemic.

Early years settings have had access to a range of business support packages during the pandemic, including the coronavirus job retention scheme, which is now extended to the end of September 2021. As long as their staff meet the criteria for the scheme, early years providers are still able to furlough them if they experience a drop in income. Findings from the childcare and early years provider and coronavirus survey have shown that in November and December 2020, 74% of the group-based providers had made use of the coronavirus job retention scheme at some point.

Eligible nurseries may also have qualified for business rates discounts to help reduce their bills. Eligible nurseries could get 100% off in the first three months of the 2021-22 tax year, with 66% off for the rest of that tax year. From 6 April, eligible nurseries have been able to access our new recovery loans, which were set out by the Chancellor on 3 March. Those help with access to loans and other types of finance, so that nurseries can recover from the pandemic. There has also been help for childminders, who are usually self-employed. The self-employment income support scheme has also been extended until the end of September 2021.

Our support for the sector goes wider than that. We are reforming our technical education. In September 2020 we introduced new T-levels, which are designed by industry experts and employers to bridge the gap between what they need and what young people can offer them. I am delighted that we have our first cohort of around 650 students now studying the T-level in education and childcare, which includes a large work placement. I thank the sector for its support for T-levels, which will provide a much-needed skills pipeline. Our investment in T-levels will benefit the early years sector.

[Wera Hobhouse]

Does the Minister not recognise that, however good the training is—and of course good, qualified staff are absolutely what our children need and our parents want—the qualification itself is not what brings staff into the sector? They must actually get wages so that they can pay their own bills. Unless we pay them more, we will not get staff into the sector, however good the training and qualifications are.

[Gillian Keegan]

Of course there is a relationship between pay and the work, work-life balance and type of job, but the sector still attracts a lot of young people. There is a lot of demand. In fact, the T-level in education and childcare is the biggest of the three T-levels that we have launched. There is the most demand for it.

In June, we announced £153 million of funding for training for early years staff to support our very youngest children’s learning and development, as part of a wider recovery package. In response to the pandemic, we announced £27 million to support children’s early language development, £17 million of which is to deliver the Nuffield early language intervention, or NELI, which is making a real, positive difference in schools up and down the country.

The Under-Secretary of State for Education, my hon. Friend the Member for Chelmsford (Vicky Ford), recently visited All Saints’ Church of England Primary School in Merton and spoke to staff delivering the NELI programme about the children’s increased confidence with language and communication. That excellent programme is proven to give children the equivalent of around three months of additional progress. Some 40% of primary schools have already signed up, helping 60,000 children in this academic year.

Funding of £10 million will support language development for pre-reception children in the next academic year. Children in reception year will also benefit from the Government’s £650 million catch-up premium for schools, which will ensure that they are supported to make up for any lost teaching time.

Thanks to the financial support provided by the Government, and the hard work of settings to remain open since June 2020, I am pleased to report that we have not seen or heard of a significant number of parents being unable to access the childcare that they need. In fact, the number of places available to parents seeking childcare has remained broadly stable since August 2015. The majority of eligible two, three and four-year-olds have continued to access free childcare, despite the challenges of the pandemic.

Since 2013, more than 1 million two-year-olds who otherwise might not have received any early education have benefited from the childcare entitlement. Ofsted data published on 30 June shows that there were 72,000 childcare providers registered with them on 31 March 2021—a dip of 4%, or 3,300, since 31 August 2020. The data shows that the dip is largely driven by a fall in childminders, not nurseries.

Numbers of childcare settings on non-domestic premises are fairly stable over time, with a drop of just 1% since 31 August 2015 and a decrease of 2%, which is 400, between 31 August 2020 and March 2021. As Members would expect, the Department continues to work with the early years sector to understand how it can best be supported to ensure that sufficient safe, appropriate and affordable childcare is available to all those families who need it now and in the longer term.

I welcome the interest of the hon. Member for Strangford (Jim Shannon), who has now left his place, and all hon. Members who joined this important debate. All the information and data that we collect is valuable because the Government obviously have to consider that in the forthcoming spending review.

[Steve Brine]

The Minister is coming to the end of her remarks. I quite like the point she made about there being places in the system and people being able to access those places, but they have been able to access them at great inconvenience to themselves. When Kings Worthy Pre-School in my constituency closes later this year, if indeed it does, people will access other places, but people who cannot drive will do so at huge expense and great personal cost. That is the issue: as suppliers come out of the system, it creates problems for parents. That is why we need a meaningful policy review.

[Gillian Keegan]

Of course, this is in the private sector. Places come in, there are mergers and acquisitions, businesses develop and businesses also exit the market. In fact, there were 3,929 settings left, but 2,108 new companies joined the market, providing 1.7 million places, so there is some volatility in the market. Clearly, if there is enough demand—that will obviously change over time, and demographics have an impact on that as well—the most important thing is to make sure that local authorities and parents can access childcare, and that there are sufficient places in the system. That churn will continue, because it is impacted by demographics, and obviously children move around the country.

I thank the hon. Member for Bath for scheduling this debate and for giving us the opportunity to discuss this vital issue, ahead of the spending review; it was very well timed. I hope she is reassured that the Government have the interests of children at the heart of our decision making. We are supporting our incredibly hard-working early years sector, and we appreciate it. It has risen so spectacularly to the extraordinary challenge presented by covid-19. We always look to continue to work with the sector to make sure that it continues to provide that fantastic service to families, parents and children across the country.

Question put and agreed to.