Childcare Reform Package

Baroness Laing of Elderslie Excerpts

Wednesday 28th June 2023 Commons Chamber

[The Parliamentary Under-Secretary of State for Education (Claire Coutinho)]

With permission, Madam Deputy Speaker, I would like to make a statement about the progress we have made towards delivering the genuinely radical childcare reforms announced in the Chancellor’s spring statement.

The Chancellor announced that from September 2025, working parents will be able to access 30 hours a week of childcare, for 38 weeks a year, from the term after their child turns nine months to when they start school. I am pleased to announce that from today, the Department for Work and Pensions has raised the amount working parents on universal credit can claim for their childcare to £951 a month for one child and £1,630 for two or more children. That is an increase of roughly 50% from the previous limits, which were £646 for one child or £1,108 for two or more children.

The Government are also helping eligible parents to cover the costs for the first month of childcare when they enter work or increase their working hours. Those parents will now receive up to 85% of the first month’s childcare costs back before next month’s bills are due, meaning that from then on they should have the money to pay for childcare one month in advance.

When I have spoken to families on universal credit, many have told me that they have struggled with up-front childcare bills, making it harder for them to get back into work. These childcare reforms support one of the Prime Minister’s five key priorities—to grow the economy—by giving families on universal credit up to £522 extra each month to cover childcare costs. This is a transformational package that is designed to remove as many barriers to work as possible.

The evidence is clear: the earliest years, before a child goes to school, are the most critical stage of a young child’s development. That is when they are learning most rapidly, and when the foundations are being laid for future success.

We are also committed to improving the availability of wraparound childcare. Reliable wraparound childcare, before and after school, helps parents to work and can offer children great activities around the school day. The education and care provided in childcare settings up and down the country is pivotal for children. Visiting and talking to nurseries, childminders and other providers is one of the best parts of my job. I wish to put on record my thanks for the hard work and dedication of the talented people who work in the sector.

I have travelled across the country visiting providers: from Chestnuts Childcare in Shirebrook to Kids Inc in Crowthorne; from Little Stars in Peterborough to Imagination Childcare in Moredon; from Curious Caterpillars in Stroud to Playsteps Day Nursery in Swindon; and from Bright Horizons in Didcot to Acorn Day Nursery in Emberton. I thank my hon. Friends the Members for Peterborough (Paul Bristow), for Bolsover (Mark Fletcher), for Bracknell (James Sunderland), for North Swindon (Justin Tomlinson), for Stroud (Siobhan Baillie), for Milton Keynes North (Ben Everitt), for Cities of London and Westminster (Nickie Aiken) and others for hosting me on those visits. They all share my determination to get this right for parents and providers.

When I am out on those visits, I often hear how much of a lifeline the settings are for parents, allowing them to work and develop their own careers, while providing the high-quality early education that gives our youngest children the best start in life.

I support the ambitious expansion of childcare support for working parents that the Chancellor announced in his spring statement. It represents the single biggest investment in childcare this country has ever seen. It will make sure that parents are able to access the high-quality, affordable childcare that they need.

Today’s changes are just one part of our generally radical plans. By 2028, we expect to be spending more than £8 billion per year on early years education, which is double what we spend now. This will build on the 30 hours of funded childcare for three to four-year-olds that this Government introduced in 2017, extending the entitlement to eligible working parents of children aged from nine-months-old to when they start primary school. It will remove one of the largest hurdles that working parents face, and it will save parents £6,500 per year on average.

We have heard it loud and clear from the sector that getting the funding right is crucial. From this September, we will provide £204 million of extra funding for local authorities to increase the hourly rates that they pay providers, and we will make sure that rates continue to go up each year. That means that, from September, the average hourly rate for two-year-olds will go from £6 per hour to around £8 per hour, and the average rate for three to four-year-olds will be over £5.50 per hour. From 2024-25, the average rate for under-twos will be around £11 per hour. We will confirm the September rates for each local authority before the summer break. We will also ask the sector for its views on how we should distribute the funding for the new entitlements from April 2024, including the rules that local authorities will have to follow when distributing the funding to providers.

Of course, money is not everything. We also want to boost the early years workforce, who are so crucial to the success of nurseries across the country. There are multiple ways that we are doing that. I have heard from many people who manage nurseries that the way that we regulate staffing in settings is stopping providers from making the most effective use of their staff and giving their best people responsibilities that match their abilities.

Likewise, childminders and nurseries have been telling us about barriers to delivering the education and care that they want for children. That is why we have launched a consultation on proposed changes to the early years foundation stage requirements. Every single one of our proposals has come from conversations with people working in the sector. They will give settings more flexibility and help address some of those barriers, while maintaining high-quality provision and keeping our youngest children safe. Indeed, 96% of childcare providers in England were judged good or outstanding at their most recent inspection, which should give parents huge confidence in the standards of provision.

Some of the new measures will help free up staff to pursue professional development opportunities. We are investing up to £180 million in the early years education recovery programme, which offers a package of training, qualifications, expert guidance and targeted support for everyone working in the sector.

To train people up, we need to get more people in, so we are also going full steam ahead with a new national campaign early next year to promote the sector and support the recruitment and retention of talented staff. We will also consider how to introduce new accelerated apprenticeship and degree apprenticeship routes, so that new entrants can build careers at all levels of the sector.

I wish to reassure Members that we will work closely with the sector to deliver these historic reforms, just as we did on previous successful roll-outs of the 30 hours entitlement for three to four-year-olds, the 15 hours entitlement for two-year-olds from disadvantaged backgrounds, and the holiday activities and food programme. We cannot do this without early years providers, childminders and local authorities. We have a strong track record of working together to deliver childcare for parents, and I will be listening closely to them when considering our next steps.

Madam Deputy Speaker, I commend this statement to the House.

[Madam Deputy Speaker (Dame Eleanor Laing)]

I call the shadow Minister.

--- Later in debate ---

[Claire Coutinho]

I thank the hon. Gentleman for his reply. Let me address some of the points that he raised in turn.

The hon. Gentleman talked about the ability of parents to look for childcare in the holidays. We have the £200 million holiday activities and food programme, which is particularly targeted at disadvantaged children. Last summer, more than 600,000 children accessed that. When we did our initial survey of that programme, about 70% of those children said that they had never been to anything like that before, which is a great sign of the opportunity that it is spreading. He talks about the work that we are doing with local authorities. To understand sufficiency and any challenges, we are contacting every single local authority as part of the roll-out.

The hon. Gentleman talked about getting more staff, and we have set out some flexibilities; I talked in my statement about the recruitment campaign we are doing next year. He talks about better uptake, but I would say that the uptake of the offer for three to four-year-olds is in the 90% range; for two-year-olds it is in the 72% range and tax-free childcare in recent years has gone from 172,000 up to 500,000. Yes, there is more to do, but we have very good uptake and any parent thinking about more childcare should look at our Childcare Choices website to see what they might be entitled to.

Overall, however, I get the sense from the hon. Gentleman’s comments that he did not listen to my statement. I talked about the £4 billion extra that is going into the sector, about plans for staff and for childminders and about routes for apprenticeships. I remind him that it was a Conservative Government that expanded the offer for three to four-year-olds and introduced the offer for two-year-olds, and now it is the Conservative Government making the single largest-ever investment into childcare.

What do we know about the Labour party policy? We know the Opposition wanted to do universal childcare, but they denied that last week. That was last week’s flip-flop—or I should say one of last week’s flip-flops. They have talked about means-testing childcare, which would mean taking away childcare from middle-class parents at a moment when we know that families are struggling with their finances. On the Government side we recognise that childcare is important for families and important for growth. Our childcare plans, as announced at the Budget, were called by the International Monetary Fund a serious point of growth in this country. We recognise that that is important.

[Madam Deputy Speaker (Dame Eleanor Laing)]

I call the Chair of the Education Committee.

[Mr Robin Walker (Worcester) (Con)]

I congratulate my hon. Friend on this important statement. I agree with her and, more importantly, I agree with the Treasury that childcare is worth investing in. I welcome the changes to universal credit, which I think will make a significant difference, but I particularly welcome the £204 million of extra funding for local authorities to distribute to providers; from what the Select Committee has heard from providers, that is urgently needed. We need to make sure we have capacity in the system to meet the challenge of providing all that additional childcare for families. I urge her to make sure that as much of that funding as possible is distributed, and to talk to local authorities about ensuring they do not top-slice it too aggressively. When the Government announced the £8 and £11 rates for the younger years, we heard from childminders in particular that they simply did not believe that they would receive that. We want a system in which the providers on the frontline of providing childcare get the funding that the Government announce.