Free Childcare for 3 and 4-year-olds

Debate between Karin Smyth and Sam Gyimah

Tuesday 12th July 2016 Westminster Hall

[The Parliamentary Under-Secretary of State for Education (Mr Sam Gyimah)]

I thank the hon. Member for Bristol South (Karin Smyth) for securing this important debate. Successful implementation of the extended free childcare offer is a key priority for the Government. Childcare was included in the Queen’s Speech for the first time after the last election, and the Childcare Act 2016 shows how much of a priority our manifesto pledge on childcare is for the Government.

At a time when there is austerity and a lot of other Departments face budget cuts, the Government have made a strategic decision to continue to invest in childcare, as a result of which an extra £1 billion investment will be made in the three and four-year-old offer from 2019-20, taking the amount going into the early years free entitlement to £6 billion a year. That is more than we have ever spent on childcare in this country. I reassure the hon. Lady that delivering on our pledge continues to be a high priority for the Government, and the passage of the 2016 Act shows that we are well on our way to turning that pledge into a full commitment for parents.

The hon. Lady mentioned the availability of information for parents about the offer. The high take-up rates for current three and four-year-olds indicates that parents are already highly aware of the free entitlement, but it is worth mentioning that we are not necessarily increasing demand but extending an offer. A lot of parents already use 30 or more hours of free childcare. The Government offer encourages those who do not get it to do so, but those who are already using the 30 hours of free childcare will get a subsidy from the Government rather than having to pay for it all themselves.

That principle is particularly important to understand because a lot of the criticism of the 30-hour entitlement, whether it is about workforce, places or whatever, seems to assume that somehow no parent in the market is already taking 30 hours of childcare and that, suddenly, from 2017 every parent will do that. The truth is a lot of parents already take more than the free 15 hours of childcare. By giving them an extra 15 hours, the Government are subsidising the additional hours they buy. We are therefore not necessarily increasing the demand, but extending the entitlement.

That principle is particularly important because it has a bearing on information and how we need to make parents aware of it. A section in the Childcare Act, which the hon. Lady will be aware of, asks local authorities to publicise information about the childcare available in the local area. The new statutory duty in the Act requires local authorities to publish information about childcare services in their local area, which will increase the information available to parents.

We have not stopped there. The Department has provided funding to the largest website in the country on childcare places—childcare.co.uk—to develop an innovative digital solution that will make it easier for parents to find information. Further, in my experience, generally when something that is otherwise quite expensive for people when they pay for it themselves is free, they tend to find out about it. I am very confident that, given the statutory duty, the innovative solutions we are taking and the fact that 98% of four-year-olds and something like 94% of three-year-olds already take 15 hours, parents talking to early years settings will realise that they can get that extended entitlement.

There will be a communications campaign before launch. I chair a cross-Government taskforce with the Minister for Employment, and at the right time we will launch a campaign alongside a new Government website to alert parents. I hope I can assure the hon. Lady that parents will be able to find out about this fantastic offer, delivered by a Conservative Government.

The second issue the hon. Lady raised was about workforce planning. As I said, the Department will launch a workforce strategy later on this year alongside the introduction of the 30-hour commitment. The quality of the workforce is already good and has been improving. Between 2008 and 2013, the proportion of full-day care staff with at least a level 3 qualification—equivalent to A-level study—grew from 75% to 87% and the proportion with a degree or higher increased from 5% to 13%. However, we are not complacent. We want to continue to attract quality staff into the early years and support those already working in the sector to progress. That is why we will publish the workforce strategy to which I alluded—it will be on how the sector can attract and retain people. That is something we are focused on.

When the hon. Lady made the point about workforce, she also talked about places, and places in maintained settings in particular. One thing to be aware of when we discuss childcare is that no one size fits all. It is easy for us in Government to think that every parent should do this, but some parents want only the 15 hours of early education for their children. That is free, and they can continue to get it. Some might want 20 hours and some might want 30-plus hours.

The strength of the childcare sector is that there are different providers to deliver different types of childcare. We have full day-care nurseries that deliver all-day childcare; nurseries in schools that, as the hon. Lady mentioned, will do three hours in the morning and three hours in the afternoon, which are focused on early education; childminders who deliver excellent childcare; and sessional providers operating from, say, church or village halls that offer 15 hours a week.

The strength of the sector is that there is diverse supply to suit different parents’ needs, which is important. We should not try to impose one model of childcare on parents. However, for parents who have been using a nursery in a school, for example, that currently offers only the first 15 hours, there is capital available to enable those schools that want to expand their provision to do so. One of the interesting things we have seen in innovative local authorities such as York, as my hon. Friend the Member for York Outer (Julian Sturdy) mentioned, is the bringing together of childminders and school nurseries to offer a one-stop shop for parents, so that the child can be in the school nursery for a time and then be picked up by a childminder if that is what works for the parent. We will look for a number of different solutions to be available not just to increase the supply of places but to ensure that parents get the childcare solution that fits their working lives.

[Karin Smyth]

I am grateful for that assurance. I agree that diversity of provision is important and valuable—I took great advantage of that when my three children were younger. Will the Minister comment on the security of income for providers? Although I do not have data to verify his assertion that the people who take 15 hours are the same as the people who might take 30 hours—I would be interested in such data—income that gives struggling providers security is important. Choice for parents is welcome, but equally providers need security of income.

[Mr Gyimah]

That is an important and relevant question. We want the childcare sector to be sustainable and we want providers to be able to deliver this offer. That is why in November we published the most comprehensive review of the cost of childcare ever. In order for the Government—we will become the biggest buyer of childcare in the UK—to set a price for the sector, it made sense for us to work out what the unit cost of providing childcare was and set a price that allows providers to deal with increased cost pressures such as the national living wage, which the hon. Lady mentioned, and, given that 80% of the sector is in private and voluntary settings, to enable the sector to make a profit. That was the purpose of the review, which was described by the National Audit Office as “thorough and wide-ranging.” Those are not the Department’s words, so I hope she is reassured that the detailed work that underpins how we will decide the funding rate for providers is there.

That is what underpinned the spending review settlement. The Government’s commitment of an additional £300 million a year to increase the national average funding rates paid for the free entitlement was based on that research. We are also committing £50 million of capital funding to create an additional 4,000 early years places. More money is going into the system than ever before, but we need to ensure that it is distributed fairly. That is what we saw in York. The issue is not just the quantum of money. Because the funding formula is based on local authorities and history, we have a situation where some local authorities are getting £9 an hour per child and others are getting something like £3.50 a child. There is therefore no point in increasing the funding pot without reforming how the money is distributed to local authorities and, in turn, how it goes from local authorities to providers.

Oral Answers to Questions

Debate between Karin Smyth and Sam Gyimah

Monday 4th July 2016 Commons Chamber

[Karin Smyth (Bristol South) (Lab)]

17. What progress the Government have made on providing 30 free hours of childcare per week for three and four year-olds.

[The Parliamentary Under-Secretary of State for Education (Mr Sam Gyimah)]

We are delivering at great pace on our commitment to provide parents with 30 hours of free childcare for three and four-year-olds. With cross-party support, we have already taken the Childcare Act 2016 through Parliament. We announced in the November spending review that we would invest an additional £1 billion a year into the system from 2019-20—more than ever before—and we are not waiting until 2017 to deliver on our commitment: around 5,000 children from eight areas will get their 30 hours a year from this September.

[Karin Smyth]

The Public Accounts Committee, of which I am a member, highlighted the danger that the Government will be unable to deliver their pledge to give three and four-year-olds 33 hours of childcare a week. In view of all our findings, what is the Minister doing to ensure that local authorities manage their childcare markets effectively or intervene if necessary?

[Mr Gyimah]

The hon. Lady asks an important question. I am in contact with a lot of local authorities, and the Department has the local authority working group. In addition to the increased funding we have provided, we are working to ensure that local authorities have the capital they need—an extra £50 million—to create places in their local areas where there is a need.