Childcare: Affordability and Availability
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The Parliamentary Under-Secretary of State for Education (Claire Coutinho)
It is a pleasure to serve under your chairmanship, Mr Hosie. I thank everybody for coming to this end-of-term debate, and for their continued presence in all of the debates we have had on this important subject. I congratulate the hon. Member for Slough (Mr Dhesi) on securing the debate today.
I know how crucial early years are for children’s development and for their parents to get into work. I also recognise that this is a critical time for the sector and I put on the record my thanks for the dedication of the staff in settings across the country, who are working tirelessly to give our children the best start in life.
I have been privileged to go on so many fantastic visits in my time in this role. Just this week, I went to see a childminder in action and was reminded of the brilliant developmental work that they do. Last week, I was with my hon. Friend the Member for Ruislip, Northwood and Pinner (David Simmonds) at Harefield Infant School, speaking to the headteachers there about the way they work with the local children’s centre. It was excellent to see that provision in place. I also recognise the quality of their work. Some 97% of our early years settings are good or outstanding, something of which we can be very proud. That comes down to the dedication of all the workers in those settings.
To give our children the best start in life, we have invested more than £3.5 billion in each of the last three years on our early education entitlements for two to four-year-old children and more and wider offers. We know that the sector is facing economic challenges, similar to the challenges that people are facing up and down the country. We have already announced additional funding of £160 million in 2022-23, £180 million in 2023-24 and £170 million in 2024-25, compared with the 2021-22 financial year. I assure everyone that improving the cost, choice and availability of childcare for working parents is very important to this Government and very important to me.
As well as providing support for families, the sector is facing difficult challenges. That is why we want to give providers help to continue what they do best—educating and developing young children. One of the things we are doing is making sure that we are investing in the workforce.
Claire Coutinho
I am not entirely familiar with that figure. Perhaps we can discuss it after the debate and I can come back to him with a fuller answer. As I have said, over the last five years, we have spent £20 billion on early years. Not only are we supporting the sector with the money that I have set out today but we are also supporting it with energy support. I know from talking to lots of people in the industry that one of the things they are worried about is energy bills. We have set out significant relief over the winter to help with that issue.
Funding increases are taking place across England. In the constituency of the hon. Member for Slough, I am glad to say that the hourly funding rate for two-year-olds will increase by 62p to £6.87 an hour, and the rate for three and four-year-olds will increase by 6p to £6.27. We have also already announced an additional £10 million for maintained nursery schools supplementary funding from 2023-24. We are introducing a minimum and maximum hourly rate that a local authority can receive for their maintained nursery schools supplementary funding, to create a fairer distribution of that funding. The minimum rate will be set at £3.80 in 2023-24. Slough is one of the local authorities that will benefit from this new minimum hourly rate.
As well as increasing our support to providers, we also want families to benefit from the childcare support they are entitled to, saving them money and helping to give their children the best start in life. We know that childcare is a key concern for parents and recognise that cost of living pressures are impacting families across the country, which is why we are committed to improving and refining the offers that we have in place. We have also put many direct cost of living measures in place, from furlough to energy support relief, and direct family household support this year as well.
One of our key areas of support is the 30 hours free childcare entitlement, a Conservative commitment introduced in 2017, which has helped hundreds of thousands of working parents get back into the labour market, with nearly 350,000 children registered for a place this year. The entitlement saves those families up to £6,000 per child per year. That offer of 30 hours of free childcare is making a real difference to the lives of eligible working families. In our 2021 childcare and early years survey of parents we found that 73% of parents reported having more money to spend since they used their 30 hours and 38% thought that without the 30 hours they would be working fewer hours.
Alex Sobel (Leeds North West) (Lab/Co-op)
I acknowledge the huge benefit that has for parents, especially those getting back into work, but we have a real issue with providers, because the gap between the funding and the cost to providers is around £2 per hour for those voucher places. Nurseries in Leeds have closed because of that funding gap and others are under severe pressure. What will the Minister do to ensure that those nurseries can survive and thrive, not just at a price to the provider because the vouchers are in place?
Claire Coutinho
As of last year, we had set out half a billion pounds of extra funding to go into the sector. We have also set up energy support, as I mentioned, which will help with the increased costs, which we know lots of providers are facing this winter. Of course I will continue to look at everything that I can do in this area and I am committed to ensuring we can make this work.
David Simmonds
The last year for which we have figures available shows that a total of £62 million in unspent funds was ringfenced within the dedicated schools grant for early years. That is money that the Government have made available that cannot be spent because the funding formula means that a council, for example, cannot reallocate it to increase the funding rate to its local settings and it can be spent only in accordance with the constraints of the national funding formula. While that would not go all the way towards bridging the gap, will the Minister consider looking again at the funding formula regulations, so that local discretion could allow funds that are already allocated to be redistributed in a way that might help address some of the policy issues that she has outlined?
Claire Coutinho
As ever, my hon. Friend makes a detailed and interesting point that I will take away. I will look at the underspend and see what can be done, and I will come back to him as soon as I can.
In addition to the 30 hours, we remain committed to continuing the universal 15 hours of free early education, which this year helped over 1 million children get a positive start to their education.
Government support for childcare is not limited to three and four-year-olds. In 2013, the Conservative- led coalition Government introduced 15 hours of free childcare for disadvantaged two-year-olds. Some 72% of disadvantaged two-year-olds were registered for a free early education place in January 2022, and over 1.2 million children have benefited since its introduction.
Following a consultation in May 2022, we extended eligibility for this entitlement to children in no recourse to public fund households; that was first implemented in September this year. I urge all hon. Members to encourage families from lower income backgrounds to take up that generous offer. Children who take it up do better at school and it gives them vital skills that set them up for life.
I recognise that childcare must be accessible to parents as well as affordable. That is why the Government continue to monitor the sufficiency of childcare to ensure that childcare places are easily available. The key measure of sufficiency is whether the supply of available places is sufficient to meet the requirements of parents and children. Ofsted data shows that the number of places offered by providers in the early years register has remained broadly stable since 2015.
Under section 6 of the Childcare Act 2006, local authorities are responsible for ensuring
“that the provision of childcare…is sufficient to meet the requirements of parents in their area”.
The Department has regular contact with each local authority in England, and if a local authority raises concerns about sufficiency issues we will, of course, support it with any specific requirements. We are currently seeking to procure a contract that will provide reactive and proactive support to local authorities in fulfilling their childcare sufficiency duties.
The majority of early years childcare places— 68% in England—are provided by private, voluntary and independent group-based providers who continue to provide high quality childcare for families. The number of places, as I said, has remained broadly stable, and 96% of those early years childcare providers are rated good or outstanding. That is testimony to the many people who work in that brilliant sector.
Once again, I thank the hon. Member for Slough for securing the debate. The early years sector is an integral part of our economy and education, so my Department treats any changes to the system carefully. Our childcare offer is co-ordinated with other Departments to allow parents a range of options, depending on whether they want their children to receive childcare in a formal, nursery-style setting or from a childminder in a home.
Finally, I reassure the hon. Gentleman, and all hon. Members present, that my Department continues to evaluate what more can be done to help parents access a childcare place that not only suits their working arrangements or family circumstances but gives their child a positive start to their education. I look forward to working with him in future to hear his further thoughts on making our childcare system the best it can be.