Childcare Entitlements

Lord Storey Excerpts

Wednesday 24th April 2024 Lords Chamber

[Baroness Twycross (Lab)]

My Lords, I welcome the opportunity for us to discuss the Statement made yesterday in the other place. I thank the Minister for repeating it today in your Lordships’ House. Noble Lords present are probably united in thinking that the Government’s aspiration in expanding free childcare is welcome. However, unfortunately, it appears that currently only the Government believe that their flagship policy is on track.

My first question to the Minister is: why are Ministers proactively bringing a Statement to Parliament to say that everything is on track, when the Government’s own auditors are now saying otherwise, without the Government acknowledging that there are issues? When I suggested yesterday at Oral Questions that the policy was in trouble, the Minister stated that

“it is a huge success”.—[Official Report, 23/4/24; col. 1369.]

I woke up to headlines that indicated that I was not far off. In light of the report published today by the National Audit Office, will the Minister accept that the policy is, at the very least, at risk of not going to plan? Even the Telegraph is reporting that parents are facing worse childcare under this Government’s childcare expansion.

Are the Government still guaranteeing that every eligible child has a spot now, that every eligible child will have a spot later this year, and that every eligible child will have a spot in September next year? Are parents getting the savings that they have been promised? Why have the Government repeatedly dismissed genuine concerns about the rollout of the plan, when the problems are so clear and stakeholders across the board are highlighting the same problems?

Even the DfE has the expansion as its top programme risk, with risks including insufficient places, operational infrastructure not being ready, insufficient parental demand and an unstable market. When will the Government make a formal response to the NAO’s report? Furthermore, could the Minister confirm that the DfE has itself

“assessed its confidence in meeting milestones beyond April 2024 as ‘problematic’”?

Does she agree with the NAO that the extension does not “achieve its primary aim” or demonstrate “value for money”? How did the DfE think it was appropriate to set dates for expansion without engaging with the sector or understanding local authorities’ and providers’ capacity? Will the Government act on the NAO’s recommendations about continuously reviewing the achievability of the 2025 milestones and will they now publish interim performance thresholds?

I return to the point I made to the Minister yesterday: the DfE’s own pulse survey from last week found that 45% of childcare and early years providers said it was unlikely that they would increase the number of places they offer to under-threes as a result of the Government’s childcare expansion. The NAO estimates there is in fact a net reduction in places—albeit just a 1% reduction —since 2018, but this is at a point at which we need a significant increase in places. Could the Minister outline what the DfE’s plan is if it accepts that it will struggle to reverse this trend, if it finds that the providers simply cannot afford to offer free places, or the one in three nursery and pre-school providers that the Early Years Alliance says are at risk of closure simply do not survive? This would potentially put 184,000 places in jeopardy. How does the Minister explain the disparity between what the Government say and what the sector, parents and councils, and now the NAO, are saying?

The Statement repeated today states confidently that

“no local authorities are reporting that they do not have”

sufficient “places to meet demand”. This is very different from the National Audit Office view that only 9% of areas are confident that they will have enough places. To clarify this point, I contacted the Local Government Association, which told me that councils have reported greater concerns about the next stages of the expansion, where it will extend to children and families who would not previously have accessed childcare to this extent. It is deeply concerned about provision for families that require a different range of childcare options, such as outside traditional hours, or families for children with SEND.

The Coram Family and Childcare survey found that England has seen reductions in the availability of childcare in all categories. Worryingly, the greatest reductions have been in childcare for disabled children, which I understand is now at 6% sufficiency. Can the Minister say why this is the case and what the Government will be doing to remedy this? Local authorities are also concerned about recruitment, particularly because of the higher ratios required for under-twos. They are concerned about the lack of sufficient level 3 qualified staff in the sector. Is the Minister confident that recruitment is on track?

There is broad consensus on the need for a decent childcare and early years offer, including increasing free hours. It is a shared ambition across political parties to have an improved system that works for parents and carers and delivers the best start in life for children. Labour genuinely wants better childcare and early years provision. We have commissioned a review by Sir David Bell to assess a way forward. We want a well-planned, well-designed system that delivers for children and improves the offer to parents.

I am confident that the Minister also wants a system that works, but the first step in this instance to getting that has to be for the Government to accept that there are problems, and work to get this scheme back on track. I look forward to her response as to how, in light of the serious risks facing this flagship government policy, the promised expansion in free childcare and early years provision will be delivered.

[Lord Storey (LD)]

My Lords, I thank the Minister for her detailed Statement. I would guess that all of us aspire to the aspirations that she espoused on childcare. The issues that we are concerned about—and they concern a number of people—are around whether this can be delivered. I listened to the Statement with great care and the words that were missing were not about numbers but about quality. I have always believed, as my party always has, that it is not just about providing childcare. It has to be quality childcare—and I did not get a sense of that in the Minister’s Statement. There are a number of issues. She mentioned pay, quite rightly, but it is about training as well.

As we have heard, the National Audit Office has raised concerns that plans to extend free nursery provision could compromise—again, that word—the quality of childcare as the sector expands to meet demand. The NAO cautioned that hiring inexperienced staff and a lower supervision ratio for two year-olds could undermine childcare quality. There are also worries about whether inspections by Ofsted would identify issues early enough. The NAO has highlighted concerns about the Department for Education’s confidence in delivering required places, with only 34% of local authorities expecting to have enough places by this September. On the other hand, the Minister has painted an extremely positive picture of rollout. It will be interesting to see who is right.

This ministerial Statement did not mention or address the up-and-coming report and findings, which have been described as utterly damning by the early years sector. The Government must address the findings of this report urgently. The report concludes that there is a risk posed by

“the lack of contingency and flexibility”

in the Government’s “fixed, ambitious timetable”. It is therefore important that clarity and reassurance is provided quickly on how they will address the report’s findings. Families across the country will struggle to plan their arrangements if certainty over the next phase of the rollout is not provided.

Only 17% of nursery managers said that they could offer the extended entitlement, due to the crisis of recruitment and retention. What will the Government do to address this recruitment and retention issue?

Finally, I was interested to hear about the campaign to use unused schools. The Government want to set up what I think they call “in-home nurseries” to create some of the 85,000 places needed. How many schools will be used in the pilot scheme that the Minister told us about? If the scheme is successful, how many schools do they think they will be able to finally use?

[Baroness Barran (Con)]

I thank both noble Lords for their questions and for sharing, as we all do across this House, the ambition for all children, as we know the importance of a great start in life.

I will start, if I may, where the noble Baroness did in relation to the National Audit Office report and her question, which was echoed by the noble Lord, about when we will respond to the National Audit Office formally. I can give the House some sense of that today but, in terms of timing, we will also be giving evidence on this subject to the Public Accounts Committee on 8 May—so our plan is to respond to both the NAO report and the Public Accounts Committee in the normal way.

On the NAO report itself, I absolutely understand why both noble Lords rightly raise its challenging aspects, but it is also worth noting some of the more positive aspects. The NAO report identifies that the programme has been fundamentally successful in the rollout so far, meeting and actually surpassing the April 2024 objective. It confirms that the trajectory and take-up of this expansion in entitlement is the same as previous expansions. It also notes that it expects that the number of places being taken up will continue to grow and notes the phased introduction of the new entitlement.

On the recommendations, the noble Baroness opposite raised the achievability of the September 2025 milestone, whether the department would be setting interim performance thresholds and how we would respond with corrective action, if needed. Of course, we continually review the deliverability of the programme. We have a local authority delivery team; we have our insight unit, which analyses the data; and we have pulse surveys, stakeholder groups and provider groups, so we are really well connected into the sector. We have set a series of milestones that cover local authority readiness, sufficiency and workforce and, by the end of June, we will set regularly spaced performance thresholds. We will use those to assess the growth of capacity places and the workforce. Of course, those can and should be updated as needed, as we get live data in.

By the end of June this year, we will agree a set of staged corrective actions, if those actions are needed. To support that, we will also use our data better. We regularly update both our supply and demand modelling, and we share that directly with local authorities. We have a set of KPIs for the programme, which we monitor regularly.

The noble Lord, Lord Storey, raised a point about the quality of staff and the risk that, with less experienced staff, the quality might suffer. We do not really accept that. Back in 2021 we made major reforms in early education, which the noble Lord will remember. These were designed to improve outcomes for all children, but particularly for disadvantaged children and children with special educational needs. In October last year we published the evaluation report of those reforms, which showed that practitioners have really benefited.

As we continue with the rollout, we will be looking at the availability and quality of places for children from disadvantaged backgrounds. Similarly, for those with special educational needs and disabilities, we will be looking at what the impact is if we see new providers and staff entering the market.

We have also commissioned and funded the children of the 2020s study, which collects longitudinal data on elements that influence cognitive and social and emotional development during early childhood. Obviously, we will share that data.

Deliverability was a key part of both noble Lords’ questions, and the workforce is a critical part of that. It is fair to say that, where we are further away from a delivery deadline, it is not unreasonable that confidence in readiness might be lower. Looking at where we were in November in our pulse survey and what providers were saying about their readiness for April, 65% of them said that they were ready. By the March survey, one month ahead of the extension, that figure had risen by 16 percentage points to 81%. That is just normal.

It is also important to note that all types of providers that took part in our pulse survey have increased their capacity in the last year by over 20% for group-based and school-based providers. The figure is rather more for childminders although, as your Lordships know, they represent a smaller part of the market. On applications, for group-based and school-based providers, the number of applicants to vacancies is now on average five to one, which is a really healthy and promising indicator for the future.

The noble Lord also talked about retention, which is clearly critical. It will be important to improve retention in order to reach our objectives. The additional funding, the visibility of funding and the ability of providers to plan will make recruitment and opportunities in this sector more attractive, but there is work to do to deliver that.

The noble Lord also asked about the number of schools. We are working in a small number of areas with those schools to build a template of what might work. We will test that and, if it is successful, roll it out.

The noble Baroness, Lady Twycross, asked about wraparound care outside formal hours. In the Spring Budget last year, we announced £289 million to support the expansion of wraparound childcare for primary school-aged children.

Finally, the noble Baroness rightly raised concerns over this programme delivering for children with special educational needs. She will remember from my remarks yesterday that we are conducting a review of how the special educational needs inclusion fund works to make sure that it is as good as it can be.

We have chosen a phased approach to make sure that we learn as we go along with the implementation of this expansion, but we are doing everything we can to make sure that it is a success.