Childcare Bill [HL]

Baroness Howarth of Breckland Excerpts

Tuesday 2nd February 2016 Lords Chamber

I suppose that it is a stark contrast, really. What the Government are saying is that parents whose household income is £200,000 a year will qualify for the additional 15 hours of free childcare, while parents whose income is less than £10,000 a year will not. That tells the full tale. I am very disappointed that we are not putting more focus on offering greater support to the families who need help the most. I would urge the Minister to explain to the House why the eligibility criteria have been changed so dramatically and perhaps give us some hope that in the future they will be revised.

[Baroness Howarth of Breckland (CB)]

My Lords, I thank the Minister for the work that has been put into this Bill and I welcome it. I also thank him for the meetings that he arranged, which were extraordinarily informative and helpful, together with the documentation, which I have looked at but needs quite a lot of study to get a grip on the numbers.

I have two points. Like the Minister, I am keen to see implementation, so I am delighted that there will be projects moving forward early. How will the lessons that are learned from these early projects be applied to looking again at regulations, and how can we improve any further projects, which look rather like pilots, if I can use that word? I should be pleased to know how that learning is carried forward.

Listening to the noble Baroness, Lady Pinnock, I, too, have a concern that some of the poorest and most disabled children will not gain access to this funding. I have spoken to the Minister on a number of occasions about autistic children and children in specialist care provided by the non-governmental sector where it is very much at the whim of the local authority as to whether someone gains funding for their project. Can we at some point look at that? As far as I can see, the eligibility criteria have been changed because of the financial ceiling that is available for this work to go forward. Knowing how keen the Minister is on children and their education, and on giving them a good start, maybe in the lifetime of this Parliament, more children will be able to enjoy the benefits of early childcare places. When we learn about the benefits, maybe another childcare Bill will be introduced in the future.

[Lord Nash]

My Lords, I thank the noble Baronesses, Lady Jones, Lady Pinnock and Lady Howarth, who have spoken in the debate. Their contributions in today’s debate emphasise the extensive knowledge and experience of childcare policy across the House. This is a widely supported manifesto commitment, much anticipated by parents who want the Government to provide more help with their childcare costs. It is very pleasing to hear support across the House and the other place for the aims of the Bill and the Government’s commitment.

As has been highlighted during the passage of the Bill, we all recognise the benefits that free childcare can bring. This includes supporting those who are most disadvantaged by increasing their social mobility through providing opportunities to work or work more, rather than the availability of quality affordable childcare being a barrier to getting on. The amount of detail and certainty about the funding settlement for early years has increased significantly since noble Lords last debated this Bill, as I said earlier. As we have heard today from the announcements of the spending review, we are looking at a really positive position for early years. We have gone over and above our promise by investing a record amount in childcare and making a clear commitment to paying more to those providers who wish to deliver the free entitlement.

We want the increased rate to enable and encourage providers to deliver the entitlement. Following our comprehensive review of the cost of childcare and our significant additional investment, we are confident that this will happen. We firmly believe that we have established a sustainable rate for providers, taking into account the evidence that we gathered throughout our cost of childcare review. The upfront nature of our funding uplift, coupled with the introduction of a national funding formula, will help providers to manage future cost pressures, such as the introduction of the national living wage. We are confident in the work of the cost of childcare review, and there is no case for establishing a bureaucratic and costly process that repeats the review on an ongoing basis. The Government will monitor the implementation of 30-hour free childcare, for example, through the early implementers, and if any issues arise relating to funding they will be considered in the context of delivery of the whole policy.

The noble Baronesses, Lady Jones and Lady Pinnock, talked about eligibility. Parents will be eligible where they work the equivalent of 16 hours at national minimum or national living wage, whichever applies to them. The Government have also taken the decision to introduce a higher earnings threshold, so that where parents earn more than £100,000 per year each, they will not be eligible for the additional hours. I remind noble Lords that all three and four year-olds remain eligible for the first 15 hours of free childcare, which remains universal. We estimate that the additional 15 hours will benefit around 390,000 children.

As noble Lords will be aware, the free entitlement hours sit within a wider package of childcare support available to parents. This package includes the universal 15 free hours for three and four year-olds and disadvantaged two year-olds, tax-free childcare, and universal credit, under which parents can receive up to 70% of their childcare costs, increasing to 85% from April this year.

The noble Baroness, Lady Jones, is quite right about the 600,000 figure. This was the original estimate of the families who could benefit from the extended entitlement, but that included children in reception classes who could choose to stay in an early-years setting. The effect of the revised eligibility criteria is nowhere near as dramatic as the noble Baroness, Lady Pinnock, referred to. It is a reduction of 50,000 places, of which 9,000 are as a result of the income cap. Parents on zero-hours contracts will be included if they meet the minimum income requirement. In addition, part-time workers may well be able to access the entitlement and remuneration. It is important to note that they will all access the existing early education entitlement.

I thank the noble Baroness, Lady Howarth, for her remarks. The intelligence from early implementation will inform us about operational issues and market challenges as we finalise the functioning of the operational delivery system, enabling us to adjust our plans as we move towards full rollout in September next year. Shared learning from early implementation will provide us with early intelligence on how we can refine the system ahead of that time. The department has established a local authority working group, which the Minister, Sam Gyimah, met with in January. It will feed real-time intelligence back to the department on learning from the early implementers.

The noble Baroness also raised the case of disabled children, which is obviously an extremely important issue that was discussed at length by the Bill Committee in the other place and which I know is of interest to many noble Lords. The review found that the nature and level of support required by children with special educational needs and disabilities can vary significantly for each child, as does the prevalence of additional needs across each setting. The cost estimates reported in the review made allowances for these factors, but the review is very clear that funding for children with additional needs in the early years cannot be solved with a one-size-fits-all approach. In response, the Minister for Childcare has committed to consider early-years funding for children with special educational needs and disabilities as part of our wider consultation on allocation and a fairer funding system. The department is now working with the sector and local authorities on how this might work.

The message is clear: the Government are on the side of working parents, helping them to get on and supporting them at every stage of their life. That is why we are pressing ahead with these reforms, going further than ever before to help with childcare costs, help hardworking families and give people the choice to get into work or work more hours. This will all lead to having the right childcare in place, which will mean more parents can have a genuine choice, security and peace of mind when it comes to being able to support their family. The Bill clearly delivers on those objectives, and I hope that noble Lords will support the Government’s amendments.