Childcare Bill [HL]

Lord True Excerpts

Wednesday 1st July 2015 Lords Chamber

It is hard enough for someone to leave their baby and return to work, without the additional challenge of struggling to afford childcare. The Bill provides us with an opportunity to correct this imbalance. I beg to move, and urge the Minister to consider how parents of one to two year-olds may be helped by the free childcare offer from the Government.

[Lord True (Con)]

My Lords, surely, as the noble Baroness has acknowledged, there is a key question of affordability here. There is a great danger of good intentions running away with us on this legislation. I ask the noble Baroness for clarification. She speaks from the Front Bench of her party; is she making a commitment that the Liberal Democrats believe that that money should be spent?

[Baroness Pinnock]

My Lords, as the noble Lord, Lord True, and I said earlier, election manifesto promises are important. The Liberal Democrat manifesto gave a commitment to providing childcare in this gap for one to two year-olds. In the end, it is a question of priorities. Either you spend money on things such as Trident or you spend it on children from one to two years old. It is a question, as always, of priorities.

[Lord True]

The answer is yes.

[The Parliamentary Under-Secretary of State, Department for Education (Lord Nash) (Con)]

My Lords, I shall speak to Amendment 10. While I understand the noble Baronesses, Lady Pinnock and Lady Tyler, would like working parents of children between ages one and two to be entitled to additional childcare, the elected Government’s manifesto commitment is to increase the hours of free childcare to working parents of three and four-year-olds.

There is already support for childcare put in place by the last Government. We have increased the child tax credit entitlement to £2,780 per year for families with one child, £480 more per year than in 2010. We have legislated for tax-free childcare, which will save about 1.8 million working families with children under the age of 12 up to £2,000 per child a year.

The Government are also committed to increasing childcare support within universal credit by about £350 million to provide 85% of childcare costs from 2016 when a lone parent or both parents in a couple are in work. This is up from 70% in the current working tax credit system and current universal credit system.

This package of support for childcare as a whole provides help for parents with children between ages one and two and represents significant public investment. These are, however, difficult economic times, and the Government have to make hard choices. We know that more parents use childcare as children move towards school age. We are, therefore, focusing on where there is the greatest demand for childcare. Alongside this, two year-olds in low-income families also receive 15 hours a week, offering both high-quality early education and the opportunity for their parents to move into work.

I hope, for these reasons, that the noble Baroness is persuaded to withdraw the amendment.

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[Baroness Pinnock]

I shall speak to Amendment 30 in this group which is tabled in my name and that of my noble friend Lady Tyler of Enfield. For a serious new investment by the Government, it is disappointing that there is no indication in the Bill of the funding package that will be available for its implementation, because the funding is critical to the nature and quality of the childcare that will be provided. I welcome the funding review that has been opened, and I am delighted that the Minister has already received more than 500 responses to the request for information, but that simply shows the nervousness of the sector over the funding package that may be available.

I know from comments that have been sent to me by various childcare providers that they are very worried that if the funding is not of the right size, the implementation of what is otherwise an excellent proposal will be seriously damaged. There are several reasons for this. We do not know the quantum figure. We know that two figures have been bandied about. One is £350 million, which was mentioned in the Government’s manifesto, and the other is more than £1 billion, which was mentioned prior to the election period. The figure surely must be more than £350 million in order to fund an additional 15 hours of childcare for three and four year-olds. I hope the Minister will be able to explain where the money will come from, even if he is not able, at this stage, to tell us the total figure that will be available.

The other significant issue is that providers will not know the hourly rate that they will get for providing this childcare in the different settings. We know the rate is determined through local authority school forums and that they get the grant via the early years element of the direct schools grant. We also know that that is a flawed system. It is not necessarily a fair distribution of funding to local authorities across the country. We end up with different hourly rates for different childcare providers in different parts of the country which may not be sufficient to meet the costs of provision in those areas. I hope the Minister will be able to throw some light on this area.

There is going to be a significant demand for capital expenditure. For instance, providers in the state sector in nurseries attached to primary schools currently provide 15 hours through a morning session and an afternoon session. If there is going to be only one session of 30 hours, there will need to be a 50% increase in the amount provided. Capital funding will be necessary to do that, and it would be good to know whether any capital money is going to be available for either the voluntary or the state sector to do that.

The last point I want to make is one I raised at Second Reading, on the question of cross-subsidisation. Currently, parents who are working full-time may have to have childcare from eight in the morning to six in the evening. It is obviously quite proper that they have to pay for some of those hours, but people have been telling me that in the hours outside the free entitlement, they might be paying up to twice as much as the hourly rate in order for the private provider to meet the full costs. If, therefore, a private provider or voluntary sector provider is providing not 15 hours but 30 hours free, where is the cross-subsidisation going to come from? I am confident that the Minister, through his request for comments on the funding review, is receiving in his inbox many expressions of concern about the hourly rate that will be necessary to ensure these childcare providers are viable. For those reasons I have tabled the amendment in my name and that of the noble Baroness, Lady Tyler, and support the comments that have been made by the noble Baroness, Lady Jones.

[Lord True]

My Lords, I also have an amendment in this group. Part of it follows from what the noble Baroness was saying. Cross-subsidy—or top-up fees, as it would be more honest to call them, although we pretend that they do not exist—is a problem. As has been established in this Bill so far, that will be a problem if 30 hours becomes the limit and you cannot charge below that for the settings in question.

I am actually really interested in another thing, which is not just money. I do not believe all the problems in the world are solved by money. One of my objections when I saw this Bill published arose when somebody said, “Here’s a great idea. We’ll throw an unspecified amount of money at it and the world will be a better place”. It is not quite as easy as that and what matters are real people, real places and things that actually happen on the ground. This is a fantastically diverse sector, as both my noble friends on the Front Bench have rightly recognised. Of course, I am biased, because over the last 30 years I have come to know hundreds of people who work in the informal education sector, in nursery care, for whom I have huge affection and admiration. They are good educators; women with vocations; people who are passionate about children; but maybe those settings do not all live up to the standards you might want if our country had been erased and you were rebuilding it—they would not be like that. But they are there—in the little church halls, the village halls and parish halls up and down the land—and they are small settings. It may be nine or 10 people who work hard, and the skilled and dedicated principal and manager does not have all the time in the world to fill in forms.

What this amendment is getting at is something that I think is so important. I know my noble friend says that he wants to address this issue—I appreciate what he said both inside and outside the Chamber—and does not want to cause problems for this sector, but a huge number of providers simply could not provide 30 hours of childcare a week, because the constraints of where they provide it do not allow for it. We really should understand, as I ask in this amendment, how many nursery and childcare providers operate in rented premises or private places. These are the people who are under threat. What proportion of nursery and childcare providers could not offer this wonderful 30 hours a week that we talk about in this House and which we would all love to see?

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[Baroness Jones of Whitchurch]

My Lords, of all the issues on which regulations might be produced, as listed in paragraphs (a) to (k) of Clause 1(5), this is the one that has caused the most concern and disquiet.

Our Amendments 19 and 22 would remove the new powers to create new criminal offences leading to imprisonment of up to two years. On the face of it, this appears to be draconian and unnecessary, and we would like to explore the thinking behind it in a great deal more detail.

The Government say in their policy statement that it is their intention to align these new offences with existing schemes involving information-sharing and self-declaration. However, as the Delegated Powers Committee points out:

“There is nothing on the face of the Bill or in the memorandum … identifying the categories of person from whom the information … might be required”.

It goes on to say that the Government have drawn a confusing analogy between their proposals and the 2006 Act, the latter being about childcare premises rather than about the provision of information.

The truth is that we do not know who might be covered by this possible regulation. Would it be individual parents, individual nurseries or childminders, or even local authorities? How severe would their crime need to be? At Second Reading, a number of noble Lords identified how confusing and contradictory the current childcare funding landscape is proving to be. Parents of children aged two, three and four all have potentially different entitlements. The scope for uninformed errors is considerable.

We do not feel able to agree to a part of the Bill that gives so much power to the Secretary of State to determine who will be criminalised in the application of the Bill. Our amendment therefore removes this paragraph. It is a probing amendment but we would need a considerable level of reassurance about the constraints of its application before we were able to support the original text at Report stage. I beg to move.

[Lord True]

My Lords, I raised this matter at Second Reading and, having raised it, it had rather more publicity than I expected. I had a very large number of expressions of concern on the subject. I had tabled an amendment but, seeing that the Opposition had also put one forward, I saw no need to persist with it. However, I think that a very clear answer is needed both on the range of possible forms of entitlement, which we discussed in relation to an earlier amendment, and in relation to the informality of a number of the settings which I described when debating the previous amendment. The fear of criminal offences and potential imprisonment is quite chilling for people who work in this sector.

[Baroness Evans of Bowes Park]

My Lords, the noble Baroness, Lady Jones, and the noble Lord, Lord True, seek the removal of a power to create criminal offences. The Government’s position on this issue was set out in the policy statement that was made available to all Members of this House last week. We take the security of personal information seriously, which is why Clause 1(5)(k) enables regulations to make provision for any criminal offences in connection with the provision and disclosure of information or documents mentioned in subsection 5(i) and (j). These paragraphs relate to the sharing of information and provision of documents for the purpose of checking eligibility for the free childcare provision.

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[Lord True]

My Lords, I do not expect an answer now, but I should like to give an example which comes from the policy statement. It says that under Clause 1(5)(i), the number of hours of free childcare each eligible child takes up may be included. That can only come from a report provided by the provider, which is sometimes a small provider. Inadvertently false information may be given; it could be a mistake or something might be put in the wrong column—things happen. The next paragraph in the statement, which concerns provision for criminal offences, directly relates that to the provision and disclosure mentioned in Clause 1(5)(i) and (j). It may be that the example given is not included in that, but people reading this document could believe that there is scope for the offence to be pushed too wide by certain busybodies. I do not want to continue the point now but I hope that we can have further discussions on that matter of concern.

[Baroness Jones of Whitchurch]

I share the continuing concern of the noble Lord, Lord True. I have to say that the noble Baroness did not address the concerns raised by the Delegated Powers Committee. I know that, separately, the Government have given an assurance that they are going to look at that. However, she will know that they raised some concerns about the analogies being drawn between the 2006 Act and what is in the Bill now. I am not convinced by what the Government have said on this matter so far. I think that we need to have considerable further discussion on this, but I am prepared to allow the noble Baroness to look at the Delegated Powers Committee report and respond to that, and then perhaps we can have a more informed discussion. I beg leave to withdraw the amendment.