Childcare Bill

As my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton) has pointed out, three months have passed since Second Reading, which was the last opportunity that I had to speak on the Bill, as I did not serve on the Committee. However, today, along with my hon. Friends the Members for East Worthing and Shoreham and for Basingstoke (Mrs. Miller), I have been placed on the Front Bench to speak on child care issues. It is a pleasure to see the Under-Secretary of State for Education and Skills, the hon. Member for Liverpool, Garston (Maria Eagle), whom I last saw when we discussed the Disability Discrimination Bill, although at that time, I did not have the chance to have the kind of detailed exchanges with her in Committee and on Report that we might be about to have now. The new clauses and amendments are about sufficiency, but they are also, no less importantly, about sustainability, contestability and fairness in child care provision. These matters were explored to some degree in the Committee proceedings that I have read, but there is yet more action to be taken on them. The Government are formally signed up to work in partnership with PVI—private, voluntary and independent—providers, and they are very proud of that. When the Minister for Children and Families replied to the Second Reading debate, she gave the House statistics on the child care provision that is made by the private and voluntary sector. She will be aware, however, as the issue was raised in Committee, that some PVI providers and others are concerned that the playing field is not as level as it might be, and that the mixed economy in child care is, to some extent, under threat. In some ways, local authorities have an advantage over PVI providers. My hon. Friends gave some examples of that in Committee—including that in regard to capital spending—and I shall not repeat them here. However, when these matters were raised in Committee, the Minister for Children and Families responded to a point made by my hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibb) about a National Day Nurseries Association survey by saying"““for his information, the closure rate of all child care businesses, as recorded by Ofsted, has fallen recently . . . Ofsted’s statistics suggest that, since the publication of the 10-year strategy, closure rates for these small businesses have fallen dramatically.””—[Official Report, Standing Committee D, 8 December 2005; c. 120–21]" Before I turn to the new clauses and amendments dealing with contestability and fairness, I must tell the Minister that the figures that she gave us do not square with information in written answers that my hon. Friend the Member for Basingstoke and I have recently received. According to calculations made by my hon. Friend, some 200,000 places closed in 2004–05, up from 59,500 the previous year. That seems to be an extraordinary increase. I tabled a written question on this matter recently and, according to the answer that I received this week, the latest figures reveal that, in the six months to last September, roughly 114,000 places opened, but some 73,000 closed. In other words, the closure rate appears to be increasing. We used to say that, for every two places that opened, one would close. According to the latest figures—which might not be sustained; we shall have to see—it now appears that, for every five places that open, roughly three are closing. In short, there is a suspicion that the overall growth in the child care market—which we have certainly seen; there is no doubt about that—could be unsustainable, and that we might be entering a dangerous process of growth and contraction. First comes the growth in the number of places; second comes the closure among the PVI providers as local authority-favoured providers exploit the unevenness of the playing field to expand places; finally, there could be a contraction in local authority places as the flow of Government money into child care places continues to increase but slows down. If that were to happen, such an outcome would obviously be immensely destabilising for parents, who want certainty, and for children, who need stability. The new clauses and amendments aim to provide more stability and certainty by increasing contestability. They would put into effect some of the recommendations from the excellent CBI report entitled ““Children First””, which I am sure the Ministers have read. New clause 6 proposes that an obligation be placed on the Secretary of State, and written into the Bill, to publish a code of practice by the beginning of next year that would ensure that local authorities operating a best practice regime—in practice, that is nearly all of them—act in a fair and transparent way with regard to child care. New clause 8 underpins new clause 6 by directly placing a duty on local authorities to act in such a fair and transparent manner. Amendment No. 60 would help to write sustainability into the Bill. As drafted, the Bill places a duty on English local authorities—the Liberal Democrats need not worry; I am going to deal with Wales in a minute—to"““secure, so far as is reasonably practicable, that the provision of childcare (whether or not by them) is sufficient to meet the requirements of parents in their area””." I understand that there was some dispute in Committee about the words"““so far as is reasonably practicable””." Inserting the words"““and is likely to remain sufficient””" would place a duty on local authorities to ensure that that sufficiency is sustainable. It is evident from the calculations of my hon. Friend the Member for Basingstoke, and from the written answers that we have both received, that there is at the very least a question mark over that sustainability. Clause 6(1) already obliges local authorities to ensure that"““the provision of childcare . . . is sufficient to meet the requirements of parents . . . who require childcare””" so that they can take up work, education or training, which is admirable. Amendment No. 5 adds a new category of parents who require child care to help them"““to receive appropriate assistance with children with disabilities or other special needs””." I am sure that we have all encountered that group of parents and children in our constituencies. I recently visited a club in my constituency that provides care for children with disabilities and special needs on Saturdays, in order to give parents respite that is desperately needed. The Minister nods: she knows a great deal about these matters from her previous experience as Minister for disabled people. Amendment No. 35 obliges local authorities to"““have regard to any disabilities of the parents themselves””." Access to child care may be crucially affected if parents have difficulty gaining access to transport. Amendment No. 7 protects the position of"““existing or potential childcare providers who have been disadvantaged by local authorities who . . . provide childcare and related services themselves””" by placing on them an obligation to establish a complaints procedure. Amendment No. 38 proposes use of the local area agreement process, whereby central Government pay bonuses to local authorities that enter into agreed action, to include the creation of a diverse range of providers of children’s services or a sustainable local market for child care in England. Amendment No. 39 makes the same provision for Wales. I have a feeling, based on my experience of previous Bills, that for one reason or another the Government may not accept all the amendments. The Minister may tell us the reason. [Interruption.] My hon. Friend the Member for East Worthing and Shoreham (Tim Loughton) accuses me of pessimism, but it is simply the triumph of experience over hope. If the Minister has difficulties with our amendments, we shall be keen to hear how the Government will deal with the issues of contestability and transparency. It is clear from the latest child care statistics, which show an increase in the rate of closures, that something very curious is happening in the child care market. Either it is simply a problem of oversupply, or—as the CBI has complained, along with others who aired their complaints in Committee—Government provision is driving some PVI providers out of the market. The question is, as the flow of money slows, what will happen to places that have disappeared and may not be able to return to the market? I look forward to the Minister’s reply.