Oral Answers to Questions

Sarah Teather Excerpts

Monday 16th April 2012 Commons Chamber

[Kate Green (Stretford and Urmston) (Lab)]

14. What assessment he has made of the likely effects of changes in tax credit eligibility on the supply of early years and out-of-school child care.

[The Minister of State, Department for Education (Sarah Teather)]

Eligibility for tax credits will change with the reduction of the earnings threshold and the increase of the minimum working hours for couples to 24 hours per week. These changes do not affect eligibility for the child care element of working tax credit. The Department does not consider that the impact of these changes on the supply of child care will be significant.

[Kate Green]

In my constituency, about 1,500 families have lost child tax credit and 465 families face the loss of working tax credit if they cannot find more hours. Parents coming to my surgery have told me that they may have to give up work and therefore their child care places as a result. What will the Government do to monitor the impact of these changes on the child care markets, particularly in areas of high unemployment?

[Sarah Teather]

As I have said, the change in hours should not have an impact on the child care element, because the hours remain the same in terms of the eligibility for the child care element of the tax credit. All local authorities have a duty to ensure that sufficient pre-school and after-school child care is available in their areas. However, we are monitoring this situation very closely and looking at capacity in disadvantaged areas, as we are rolling out a significant increase in the amount of early years education available for two-year-olds.

[Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)]

According to the National Day Nurseries Association insight report, 65% of nurseries reported decreased occupancy levels towards the end of 2011—when parents were feeling the impact of slashed child care tax credits—leaving more than one in 10 settings with occupancies of less than 50% and therefore at serious risk of closure or of having to increase prices for the remaining parents. As more than 1 million families are counting on losing child tax credit or working tax credit this month, what are the Government doing to ensure that all child care providers are not driven out of business by falling occupancies?

[Sarah Teather]

What has had the most impact, unfortunately, has been some people losing their jobs, which inevitably affects the demand for child care in the areas concerned. However, the most significant impact on the early years sector, and in particular the private providers, will come from the roll-out of the two-year-olds offer, which I mentioned a few moments ago. That amounts to a very substantial increase in the amount of money going through early years settings. A significant number of places will need to be created. There will be some areas that are under-occupied, of course, but there will also be very significant demand for places for two-years-olds in some settings, and many in the sector are seeing this as a huge opportunity.

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[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

T2. There is overwhelming evidence of the negative impact of poverty on children’s educational attainment and, in turn, on their life chances and ultimately how long they can expect to live. In my constituency, nearly 6,000 children are affected. With the assessment of the Institute for Fiscal Studies that child poverty is set to increase under this Government, what is the Secretary of State’s estimate of the impact on the educational attainment of those children?

[The Minister of State, Department for Education (Sarah Teather)]

That is precisely why we have introduced the pupil premium: £2.5 billion targeted at the most disadvantaged children. It is also why we are rolling out 15 hours of early education for all two-year-olds. To pick up the points the hon. Lady mentioned, we know that high-quality education will make a real difference to the life chances of those children.

[Tony Baldry (Banbury) (Con)]

T6. Has my right hon. Friend had the opportunity to read the report, chaired by Priscilla Chadwick, on the future of Church of England schools? Does he agree that the recent changes in education introduced by the Government provide opportunities for the continuing involvement of the Church of England in education, particularly in delivering distinctive and inclusive new academies?