Childcare Bill [HL]

Lord Nash Excerpts

Tuesday 2nd February 2016 Lords Chamber

Moved by

[Lord Nash]

That this House do agree with the Commons in their Amendments 1 to 3.

1: Clause 1, page 1, line 2, leave out Clause 1

3: Clause 2, page 2, line 26, at end insert—
“(4A) For the purposes of assisting the Secretary of State in the discharge of the duty imposed by subsection (1), the Commissioners for Her Majesty’s Revenue and Customs may carry out functions in connection with the making of determinations as to whether a child is a qualifying child of working parents.”

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

My Lords, I am pleased that the Bill brought back to this House today for our consideration is in such good shape. As a result of the scrutiny in both Houses, I believe that the Bill now presents the right framework to deliver the 30 hours of free childcare for working parents of three and four year-olds.

As we have discussed at length in this Chamber, for too long childcare has been the issue and the barrier for parents deciding whether to return to work or work more hours. The Bill, and the entitlement that it creates to 30 hours of free childcare, will support working parents to make real choices about how they balance raising their children and working to provide for their families. We are clear that parents need and expect the childcare provided under this Bill to be high quality and delivered in settings where they know their children are safe and well cared for.

I hope that after the debate today noble Lords will agree that this Bill is fit for purpose and that, while our discussions should continue, our focus should move on to implementation and ensuring that the details of regulations and statutory guidance are right. I hope noble Lords agree that turning this Bill into action is an exciting opportunity for parents, providers and local authorities, beginning later this year with early implementation.

I am delighted that today the Department for Education has announced the areas that will benefit from 30 hours of free high-quality childcare places a year earlier than planned, taking pressure off parents and helping children to fulfil their potential. Around 5,000 children residing in York, Northumberland, Newham, Hertfordshire, Portsmouth, Swindon, Staffordshire and Wigan will benefit early from this entitlement. In addition, the department has announced today that it has set aside £4 million to support an additional 25 local authorities to develop innovative flexible childcare for working parents, and to ensure that we can meet the needs of children with special educational needs, in homeless working families and in rural communities.

Amendment 1 in this group removes the funding review clause that was inserted as Clause 1 to the Bill on Report in the Lords. Debate on funding in the other place prompted by the clause was extensive. Members in the other place were able to use all stages of the Bill to scrutinise, challenge and support the evidence presented by the Government’s review into the cost of providing childcare and the outcome in the spending review settlement. The amount of detail and certainty about the funding settlement for early years has increased significantly since your Lordships last debated this Bill, most notably the announcement in November’s Autumn Statement that the Government will invest an additional £1 billion per year by 2019-20 to fund the free entitlements in the early years. This funding includes £300 million per year for a significant uplift to the rate paid for the two, three and four year-old entitlements, fulfilling the Prime Minister’s commitment to increase the average hourly rate that providers receive to deliver the free entitlement.

These decisions on funding are underpinned by the review into the cost of providing childcare, published on 25 November. I hope that noble Lords have been able to look at this review document and the wealth of evidence and information it provides. I hope noble Lords agree that this is a thorough and comprehensive piece of work, and that all Peers who were able to meet the funding review team in October and again in January found these discussions helpful.

It is really important that the department is now able to build on this generous settlement and ensure that every pound is used as effectively as possible. This is why the Government have committed to introduce a new national funding formula in the early years to ensure that funding is fairly and transparently distributed across the country. It is also why we will also be ensuring that as much funding as possible reaches providers and that it is fairly distributed between different types of provider.

I am also pleased that the Government have confirmed that £50 million of capital will be allocated to support the creation of early years places for the free entitlement. We believe strongly that the childcare market will grow to deliver the extended entitlement, but we are not complacent and are taking steps to build capacity—for example, through the free schools programme, which could create at least 4,000 places, building on provision available in free schools such as Reach Academy in Feltham, which offers free entitlement places for two, three and four year-olds. This capital investment, combined with an attractive increased rate to providers, will enable providers to seek investment to expand if they want to.

I hope that based on this significant amount of new information and detail, noble Lords will agree that the funding review clause inserted on Report is no longer required. That clause prompted debate in the other place on the important issue of funding but Members have signalled clearly that they do not believe that a further funding review upon Royal Assent is necessary, nor should it hold up the important next steps needed to ensure that early implementation can begin this year. The sooner we can tell local authorities about their funding allocations, the sooner they can begin to plan with their local childcare providers. A further review would simply delay this whole process. I hope your Lordships agree that this is the best way forward.

--- Later in debate ---

[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.

Motion on Amendments 1 to 3 agreed.

Moved by

[Lord Nash]

That this House do agree with the Commons in their Amendment 4.

4: Clause 3, page 3, line 46, leave out subsection (3)

[Lord Nash]

My Lords, I shall speak to Amendments 4 and 4A in this second group. Amendment 4, and Amendment 4A, tabled by the noble Baroness, Lady Pinnock, relate to flexible childcare provision for working parents. When we debated the amendment on Report, I was clear that the Government are fully committed to ensuring that sufficient flexible provision of childcare is made available to support hard-working parents. Indeed, if the new additional free hours are to support parents to work, they need to be delivered in a way that meets parental demand. We know that a large number of parents, particularly those on low incomes, work all year round and outside nine to five. We want to ensure that the new entitlement provides childcare to support their working patterns.

--- Later in debate ---

[Baroness Tyler of Enfield (LD)]

My Lords, briefly, I support Amendment 4A. I reiterate my strong support for the principle behind the Bill: to help parents, particularly mothers, to enter and stay in the workforce by ensuring that their children have access to high-quality and affordable childcare.

My key concern today, which is something that we have pressed throughout the passage of the Bill, is that the extended free childcare should be available to everyone who needs it including those who work atypical hours. As we have heard, those might be early in the morning, late in the evening, at weekends and during the school holidays. The question that I ask myself is: does this Bill help low-income families and single parents—usually mothers—to enter and stay in the workforce? To be able to answer that with a resounding yes, we must be confident that the free childcare will be available on a flexible basis which matches the working patterns of all parents. I am thinking particularly of those people struggling at the very bottom of the income scale, who are generally in no position to negotiate their working patterns in the way that, thankfully, many parents working in professional and managerial positions or those in more stable jobs can.

We know from all sorts of surveys that there is much demand for flexible childcare outside of standard hours. We also know that the supply of it is currently very scant. The only figure which I will quote is from the Family and Childcare Trust’s annual childcare costs survey of last year. It found that only 14% of local authorities in England said that they had sufficient childcare for parents working atypical hours.

I know that the Minister understands this issue very well and I welcome the plans that he outlined earlier in this debate to ensure that low-income families needing flexible childcare will actually be able to find it at hours that suit their needs. It will be vital that the strong focus on flexibility of hours is reflected in the pilots and the regulations, and the Minister has made clear that it will be. I am pleased about that, but would press him to go a little further. He talked about transparency and the monitoring arrangements, all of which I welcome, but at what point will he decide to review whether those things have worked and whether the approach he has set out has delivered the intended results?

[Lord Nash]

My Lords, I thank all noble Lords who have participated in this debate for their contributions. I particularly thank the noble Baroness, Lady Jones, who has provided scrupulous challenge from the other side of the House throughout the passage of the Bill. She has seen the Bill through to the end of its passage, even though she has changed her responsibilities during that time. I also welcome the meetings and sessions we have held outside the Chamber, particularly on the funding review, which I hope noble Lords found useful.

I also pass on my thanks to the noble Lord, Lord Touhig, and the noble Baronesses, Lady Pinnock and Lady Tyler, who have provided a constant source of challenge to this policy, as they have today, always with the best of intentions. I pay special thanks to the noble Lord, Lord Sutherland, who provided support throughout the passage of the Bill, ensuring the relevant Peers were involved in the crucial steps we took to guarantee the Bill is the best that it can be to deliver this well-intentioned policy to support working parents. I look forward to continuing to work with him and other noble Lords as we produce regulations to make this policy a reality, and I welcome the important scrutiny I know they will provide.

Although we have not had an extensive discussion today on the quality of the entitlement and the workforce, I am thankful for the discussions I have had on these throughout the passage of the Bill, particularly with the noble Earl, Lord Listowel, and the noble Baroness, Lady Howarth. The Parliamentary Under-Secretary of State for Education and Childcare and I also thank all the officials in the Department for Education who have supported the passage of the Bill. Our particular thanks go to the excellent Bill managers who have so ably supported the Bill through both Houses: first Jenny Preece, then Katy Weeks.

The noble Baroness, Lady Jones, asked me to be a little clearer about what I meant by flexibility. She is always very suspicious and I am sure she thought that I was trying to use some mealy-mouthed words in that definition—I had hoped she would know me better by now. It covers all the things that she mentioned and others. It will of course depend on the particular needs in the area but it is meant in the widest sense: we are not trying any fastballs here. We believe that the funding we have come up with will be sufficient, including in terms of flexibility, but I note the quite technical points that she makes about the workings of this in relation to flexibility, as well as those made by the noble Baroness, Lady Tyler. I would be very happy to host a meeting when we have had feedback from the early implementers, particularly on this point, and to have further discussion about this. The points they raise are very important to making sure that this does actually work in practice.

As for the points made by the noble Baronesses, Lady Pinnock and Lady Tyler, the summary given by the noble Baroness, Lady Pinnock, was spot-on—it is delightful to see that the art of precis is still alive and well. As I have said, noble Lords will be involved in drafting the regulations in this regard. As to the money, £30 million has been announced for the eight areas mentioned to deliver the 30 hours of free childcare to 5,000 children from September 2016. Four of these, as I said, will focus on flexibility. In addition, we have announced £4 million to support an additional 25 local authorities in testing innovative approaches to flexibility. We agree and understand that balancing capacity and flexibility is complicated, which is why the Government have announced these issues today. I hope that the noble Baroness does not have to think very long and hard whether what I have said today and the assurances that have been given will enable her to withdraw her amendment to the Motion.

[Baroness Pinnock]

I thank all noble Lords who have contributed to this amendment on a flexible approach to the childcare offer and I thank the Minister most sincerely for the important offer that he has outlined today, which will take us very much in the direction of travel that I hoped we could achieve. With that, I beg leave to withdraw the amendment.

--- Later in debate ---

Moved by

[Lord Nash]

That this House do agree with the Commons in their Amendments 5 to 7.

5: Clause 5, page 5, line 30, leave out subsection (4) and insert—
“(4) A statutory instrument containing (whether alone or with other provision) regulations mentioned in subsection
(5) may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament. (5) The regulations referred to in subsection (4) are—
(a) the first regulations made under section 2;
(b) the first regulations made under section 3(1); (c) any regulations under section 3(7);
(d) any other regulations that amend or repeal provision made by an Act.
(6) Any other statutory instrument containing regulations is subject to annulment in pursuance of a resolution of either House of Parliament.”