Free Childcare

Katherine Fletcher Excerpts

Monday 9th March 2020 Westminster Hall

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

Thank you, Mr Davies. I crave your indulgence: this is the first time that I have contributed to one of these debates, so please forgive me if I do not follow the protocol exactly. I am sure you will be quick to draw to my attention any failings on my part, as the Minister was when she kindly pointed out that I had sat on the wrong side of the Chamber when I came in.

This is a timely opportunity to discuss these issues. As one of the many parents directly affected by them—I have two nursery-age children—when I heard the list of issues that the Government need to consider, it resonated with me. Having had those discussions about how best to allocate the cost of childcare, what impact the costs would have on two working people, and whose salary and career prospects would be most impacted, those issues feel very personal, and I know they are on the mind of my constituents in Ruislip, Northwood and Pinner. I will reflect back some of the solutions and points that arose in my time in local government, as I was responsible for this issue both in my local authority of Hillingdon and, to look at the bigger picture, at the Local Government Association, which represents local authorities.

I will start with the cost and its impacts. When the free childcare policy was first implemented, one of the debates that local authorities had with the Department was about the fact that, as is clear from providers’ feedback, the funding that comes through this mechanism is unlikely to be sufficient to ensure that childcare is always free to the user. I have spoken to a number of the Ministers who have been responsible for this area over the years, and they have been very candid about this. The fact that the commitment was in a Bill meant that they needed to speak of that childcare as free, but providers recognised that there was scope to charge for elements of childcare, such as nappies, food and trips—elements quite explicitly laid out in the legislation—which those of us paying the monthly bills would assume were part of the overall cost. That made it a slightly different conversation.

It is fantastic that the Government have invested in providing what is, in practice, a massive subsidy for childcare—about a 90% subsidy in most places. However, there will always be an ongoing debate when, although we talk about something being free, families have to pay an additional contribution to secure the hours—although for most parents, the funding covers the cost of the care that, in the Department’s analysis, it is intended to cover. My children’s nursery and many others, recognising the fact that the free element is term-time only, have spread that time out, so that in practice it becomes a subsidy over the course of the year. That is extremely welcome, given the overall cost of childcare, but clearly it leads to this dilemma whereby people expect it to be free but it is not, although it is heavily subsidised.

It is important to consider this in context. I was the local authority’s lead member on this during the previous Labour Government, when the tax-free voucher schemes were being rolled out and accessed through many employers, particularly large ones such as local authorities. The Government have maintained some of that momentum by seeking to make the benefits of those voucher schemes available to a much larger cohort of people through the tax-free childcare programme, which is at the very minimum a significant subsidy of the cost. The roll-out of those programmes has not been without teething troubles—I am one of many parents who experienced frustrations in accessing the tax-free childcare service and making sure that payments due under that scheme were made on time—but they have been of significant benefit to many mums and dads the length and breadth of the country, and reflect the Government’s considered policy position, which is to ensure tax-free childcare arrangements are focused on supporting people who are accessing work. I hope that gives the strategic picture on financing.

I turn to the local authority sufficiency duty, what it means in practice and how it affects the market. For a long time, local authorities have played a significant role in the provision of high-quality childcare at a local level, going back to the neighbourhood nurseries initiative in the late 1970s. Currently, that role is expressed via the sufficiency duty. It is important to be clear that the duty involves the planning rather than the provision, although many local authorities, including mine, both provide childcare under the policy and work with local providers to ensure that sufficient places are available.

A number of challenges arise from that, especially for children who have special educational needs and disabilities. As I know from personal experience, it is often only through the local authority that children with significant medical conditions can access nurseries, because it has sufficient resources in the background to provide the training, and the experienced staff who know how to deal with complex medical conditions in a way that a private profit-making provider may struggle to within the funding envelope.

The Department’s finance guidance clearly expresses the expectation that there be a minimum pass-through rate of funding of 95% for local authorities. In many cases, local authorities passport a significantly higher rate of funding; in Kent County Council, the rate is 99%. In a number of local authorities, 100% of the funding from the Department is expressed in the funding rate paid per hour to providers.

There is a challenge around that. It would be helpful for the Minister to consider in the round, although not necessarily straightaway, the role of schools forums in the distribution of funding. The early years block is one of the three main components of the ring-fenced dedicated schools grant. The local authority is not permitted to deduct resources from the grant, although schools forums have some discretion in how the 5% for overheads may be used. In most cases, because of the capacity and planning issue, it is used to ensure that free training in paediatric first aid and resuscitation is available to local nursery providers. It may also be used for up-front grants for nursery providers who are seeking to expand, and who need money ahead of time to recruit staff, so that they have enough people, under the child-staff ratios, to take extra children into that setting.

As any local authority will say, schools forums tend to be dominated by the voices of large secondary schools. For the most part, the early years sector is fragmented and made up of many small private providers, so it is hard for it to bring the leverage to the discussions that secondary headteachers can bring, who are supported by large unions and research organisations. In practice, therefore, many debates at schools forums focus on how to distribute the secondary school money, with only a passing glance at what happens in early years. The view among secondary heads is often that an early years underspend is good, because if that persists, it justifies the redistribution of money into secondary school budgets.

[Katherine Fletcher (South Ribble) (Con)]

I spent some time with the Children’s Commissioner’s early years board in the last couple of weeks. The importance of making a great start and having a cohesive response, from a nursery or somewhere else, was heavily emphasised. I ask the Minister to understand the number of families with children in the gap between nine months and two years, and how many are directly affected before the Government funding kicks in, and to examine the opportunity to provide targeted support in that area to troubled families through family hubs or children’s groups.

[David Simmonds]

My hon. Friend makes a good point, which I will touch on in my concluding remarks. Too often, that issue has been absent from schools forums’ deliberations about the distribution of funding. We hear repeatedly from primary and secondary heads that they would like more to be invested in the early years, but when it comes to the practical decision-making that would ensure that money got to the sharp end to deliver the benefits that she touched on, the drive is often absent.

It is important that the Department’s guidance and messages to schools forums appropriately consider the value of early years education. Money spent there has the biggest impact on a child’s life prospects, and the arguments about disadvantage have been well rehearsed, so I will not cover that. In the language of priorities, childcare can be expressed as an issue about enabling people to access work—as purely economic: “money in, productivity out”—or, which is more complex, as something through which we seek to measure the impacts that specific early interventions have on a child’s life.

Anecdotally and from research, we know that access to high-quality early years education is hugely beneficial over a child’s life, more so than money spent on young people of sixth-form age. It is harder to identify, however, which specific interventions yield the most value. From my experience as a trustee of the Early Intervention Foundation, which I have been at since its inception, although I have now stepped down, I know that a challenge of the Sure Start programme was that money was spent on many things that were popular and well-received by parents, but there was a real lack of evidence that they effectively tackled the issues in the communities for which the money was provided. As a result, there has been a growing interest in identifying through research, by using the gold standard of a randomised control trial, which interventions should be chosen by an individual centre or by a local authority when it is planning that provision in a local area. As we begin to look at the development of family hubs, to which my hon. Friend the Member for South Ribble (Katherine Fletcher) referred, we need to identify the things that not simply were popular and well regarded in the past, but will actually change outcomes for children in the medium to long term.

The work of the Early Intervention Foundation and the other What Works centres founded by the Department to look at each of the different life stages gives us the opportunity to make much better decisions than in the past about how the Government deploy those resources. As a Conservative, I am interested in the efficiency of public money, but having been there from the inception of Sure Start, through its implementation and the days when it was extremely well funded, back to now, when we are looking at winding back some of that activity, I would like there to be a focus across the activity of the Department and the Government on demonstrating what leads to an improvement in outcomes.

I hope that gives a flavour of what I learned in the world of local government. The Minister is listening attentively, and I know from discussions with the Department that it is an area of great interest for a variety of reasons, so I look forward to her response.