Childcare Bill

My Lords, the noble Baroness is quite right, but the number of childcare places has doubled since 1997 and the vast majority of those places are in the private and voluntary sectors. It is simply not the case that there has been some nationalisation of childcare in the way that has been suggested. We are at one on this; we want to see a thriving market in childcare in which the private and voluntary sectors play a substantial role. They do so and I pay tribute to the role of the Churches and the faith communities in this area too. They all play an important role. We see local authorities as having a duty to secure provision, but the noble Baroness, Lady Walmsley, was not too enamoured of that. She did not like the idea that the role of local authorities might have too light a touch. These provisions exist precisely to ensure that the private and voluntary sectors are empowered. I came under great criticism from—I like to call her my noble friend—the noble Baroness, Lady Howarth, for proclaiming the importance of schools in this respect. I am unashamed in proclaiming the importance of schools; we undervalue the role that schools can play in our society. It is precisely because we want schools to regard engagement with parents—including the provision of childcare—as an important part of their functions, to see that they better engage with parents, that we have included the provisions in Clause 8(4). These ensure that the provision of childcare,"““by the governing body of a maintained school””," is not covered by the provisions of the preceding subsection which leave the local authority as a provider where there is not a sufficient market for it. The noble Baroness, Lady Walmsley, who I know is not enamoured of our trust schools, or academies, or independently managed schools, is deeply worried that schools might go too far, and become too enthusiastic in providing childcare for their parents. I think the phrase ““loss leading”” came into her remarks. I tried to get my mind around this concept of loss leading. To my mind, we should support anything a school does which promotes the active engagement of its parents in something as worthwhile for them as providing appropriate childcare. I am looking forward to debating this matter in Committee, but at the moment I cannot envisage the circumstances in which the state would be in the business of seeking to ban schools—that is what it would come down to—from providing legitimate childcare. I think that we will be conducting a friendly debate on this issue. I shall put my starting proposition on the table: I think it is thoroughly good and worth while for state schools to provide childcare which ensures that the needs of parents are met. Many of the parents who will take most advantage of this are precisely the non-working and poor parents whom we have been talking about. I look forward to discussions about local market distortions in that, although I do not think that such distortions would affect parents. We are talking about childcare that is convenient to parents and which parents wish to use. In my experience as a parent, there is nothing more convenient than childcare being provided at a school which, in all likelihood, is attended by other children in the family. In that way, parents can build their childcare arrangements around the wider education provision that they make for their children. I can see that in Committee we shall have huge debates, which I shall not address now, on the word ““taught””. I remember once listening to a sermon in which not a bishop but a more lowly cleric said, ““When I use the word ‘man’, I embrace all women””. When we use the word ““taught””, we embrace everything that has been described as play, social interaction and child development. I know that long extracts from the Oxford English Dictionary have been read out in another place. I am sure that we will revisit them in your Lordships’ House, together with many other interpretations of the word ““taught””, but I do not think that we are far apart on this issue. However, I wholeheartedly withdraw the word ““manpower””. Before the amendments appear in the Marshalled List, I withdraw that word entirely. I replace it with the word ““workforce”” with immediate effect so that we do not have to go in that direction. I shall seek to meet as many as possible on the specific points raised. The noble Baroness, Lady Morris, was concerned that at the moment Sure Start is focused on the most deprived areas. As she rightly said, there are very many poor parents and needy children in areas that do not fall within the most deprived wards in the country. I think that the noble Baroness will accept that we were right to start in those areas, because there were no, or very few, children’s centres before we began the programme of establishing them. Until this year, children’s centres have indeed been established where the need has been greatest, with local authorities focusing on children living in wards that are among the most disadvantaged. However, from this year onwards, we will be focusing more on developing children’s centres beyond the less advantaged areas. The noble Baroness, Lady Sharp, rightly said that the establishment of 3,500 such centres is an ambitious objective—and it is—but, to give some idea of relative scale, we have 20,000 primary schools in this country. If we are to move anywhere close to the situation that exists in some European countries that have better provision in this area, I believe that in due course we will need to go substantially beyond the figure of 3,500, as we will wish to see children’s centres in every community where there is parental demand for them. A moment or two ago, I touched on the subject of market diversity and private and voluntary providers. We see the role of the voluntary and private sectors as being immensely important. The provisions of the Bill underpin that importance. Under Clause 3(4), local authorities are under a duty to encourage the involvement of private and voluntary sector providers of early education and childcare in the planning and delivery of integrated early childhood services aimed at improving outcomes for under-fives. Under the childcare duty in Clause 8(3), to which I referred a moment ago in the context of schools, local authorities can provide childcare themselves only if no other provider is willing to do so. We put in the subsequent provision because we wish to preserve the position of schools. The role of the private and voluntary sectors, which includes social enterprise organisations of the kind that the noble Baroness is engaged in, is of great importance. A recent survey shows that 58 per cent of childcare in children’s centres—that is, in the new forms of provision that we have been putting in place—is provided by the private and voluntary sectors. But we agree that we must continue to ensure that there is a diverse mix of provision under the Bill. We are amending the Sure Start grant memorandum so that from April this year there will be a requirement for local authorities to consult, and consider using, the private and voluntary sectors as they develop children’s centres. I hope that that will further underpin our commitment in this area. That ties in directly to the withdrawal of childcare places, about which much was made, but I stress that this is in the context of a doubling in the overall number of childcare places since 1997. In any rapidly expanding and competitive market of the kind that we have seen in childcare, one would expect to see some closures. I am not myself in the state socialist mould of provision that says that we should guarantee all existing provision and not allow the market to operate. There is an important role for the market in responding to parental demand. Closure rates have stayed lower than at any time since June 2003. Since March last year, both total closures and the closure rates of childcare places have fallen in each quarter. The closure rate fell from 17 per cent in March last year to 12.8 per cent in December last year—a decrease of one quarter. Comparing December 2004 with December 2005, closure rates fell by more than 3.6 per cent. The total number of closures in the year to December 2005 was 158,343—down from 200,770 in March 2005. So we are seeing a substantial reduction in both the closure rates and the number of closures, and all those figures are from Ofsted. The growth that we have seen has been predominantly in full daycare provision, where the number of places has increased from 284,000 to 553,000, of which 83 per cent are in the private or voluntary sectors. So the state is not crowding out the private and voluntary sectors; on the contrary, the private and voluntary sectors are the dominant players in the provision of childcare, and that is as we would wish to see it. The noble Baroness, Lady Morris, and many other noble Lords asked what assessment would be made of the needs of non-working parents, who have a vital set of needs that we must recognise. I stress that the needs of non-working parents will be assessed in exactly the same way as those of working parents. The local authority will have to take account of the needs of non-working parents in securing sufficient provision for working parents in the area. As the House will know, the Government already provide 12.5 hours a week of free early years provision for all three and four year-olds, irrespective of the employment status of their parents. That will rise to 15 hours a week by 2010, with the aim of it increasing to 20 hours a week in the long term. We are very mindful of the needs of non-working parents as well as those of working parents. Virtually every speaker in the debate raised the issue of resources. The noble Baroness, Lady Seccombe, said that there would be no additional resources, but that is not the case. Substantial additional resources will be going into the system over the next few years, and the noble Baroness, Lady Sharp, gave the figures. We said in the Explanatory Notes that the resources available would be those that had been announced. Alas, there was not, and never is, a pot of gold that we can magic up outside the resources that have already been announced within the Comprehensive Spending Review. But the additional resources that have already been announced are indeed substantial. Between 2004–05 and 2007–08, total expenditure in this area will increase from £958 million to £1.8 billion—a 55 per cent increase—and a total of £4.4 billion will be available in 2007–08, when the funding for the free early education offer is taken into account. In addition, there is the extension of the 12.5 hours a week of free provision for three and four year-olds from 33 to 38 weeks across all settings, which takes place from this April. That will cost an extra £82 million, which my department is making available through the dedicated schools grants, so local authorities will be reimbursed for that. In addition to the global total for under-fives and the funding for the additional weeks of free places, there is also the £2 million a day childcare element of the working tax credit which now flows through the system directly to parents. That makes childcare more affordable for the least well-off and, of course, does a great deal to stimulate demand and choice. Last year we had already increased tax credit levels and we plan to increase them again this year, so that the maximum proportion of childcare costs that can be claimed back will rise from 70 per cent to 80 per cent, so meeting the concerns of the noble Earl, Lord Listowel, about affordable child care. We are putting a very significant additional resource into the system so that childcare is affordable and so that there is provision at local authority level to develop children’s centres and to make the other childcare placements to which we have referred. In addition to all that, under the Bill, where they are providers of childcare themselves, local authorities will also be able to recover costs by charging. We think that is an entirely proper activity, not least so that there are not the distortions of the kind that would occur if local authorities were seeking to subsidise unduly. Some of the income that they generate from that charging will be available through the working tax credit. A whole set of issues was raised on registration, largely by the noble Baroness, Lady Walmsley. I shall try to run through as many as I can. She raised the issue of fees for registration and inspection. She is quite right to say that they will increase by about 30 per cent. We are talking about fees for child minders rising to £14 and £18 to register; and fees for daycare providers rising to £150 to register, as against the ongoing cost of £120 thereafter. Those are still massively subsidised costs. I should give a comparison of the actual costs at the moment. Currently, daycare providers pay £121 to register with Ofsted. At present, the registration actually costs approximately £1,500 to Ofsted to carry out. They then pay £94 annually thereafter and the inspection costs thereafter to Ofsted are about £1,500. So the level of subsidy in the system at the moment is very great and it is similarly large in respect of child minders who currently pay £14 to register with Ofsted and the registration cost is approximately £750 to the state. Although we seek to recover more of the costs and strike a better balance between the interests of the providers and those of the taxpayers, there will still be a very substantial public subsidy. The noble Baroness, Lady Walmsley, the noble Earl, Lord Listowel, and my noble friend Lady Massey referred to the exemption of certain categories of providers from registration. I understand that concern and I am sure that we shall debate it more in Committee. Clause 96 defines ““early years provision”” as,"““the provision of childcare for a young child””." Early years providers, therefore, include anyone who cares for young children from schools to nurseries and from child minders to babysitters and nannies. That is a very wide spectrum and we believe that it is right that there should be a power to exempt. Otherwise we shall include everyone who provides any form of childcare and I do not believe that your Lordships would wish to have that degree of over-regulation and interference in private family life. I accept that we need to be clearer about how we exercise the power to exempt. I believe that the House would wish us to exercise that power; otherwise we would see a big invasion of private life. On quality improvement and ensuring that quality assurance schemes are not simply a once-in-three-years inspection—a point raised by the noble Earl, Lord Listowel—we agree that quality improvement schemes have an important complementary role to play. We are supporting the National Children’s Bureau in establishing the feasibility for a sector-led benchmarking scheme for quality assurance schemes and I shall happily give the noble Earl more information on that point. The noble Baroness, Lady Walmsley, raised another regulatory issue about crèches. Crèches, of course, offer a different type of service compared with other types of provider, caring for children for short periods only or on an irregular basis. Again, we do not wish to over-regulate that kind of provision. However, it is the nature of the setting and not its name that will determine its regulation, so it will not be possible for people simply to claim to be running crèches and therefore to evade proper regulation. The noble Baroness also quite rightly referred to the importance of BME groups which need to be treated sensitively and that childcare should be available to meet their needs. We entirely agree with the noble Baroness about the refugee and traveller communities. Last week, I met the noble Lord, Lord Avebury, to discuss precisely those communities and the very big challenge of meeting their proper engagement in the school system. I entirely agree that the same issues apply in relation to under-fives provision. The noble Baroness mentioned existing provisions in the Race Relations (Amendment) Act 2000, which already provides the legislation required to ensure that racial discrimination is eliminated and that equality of opportunity and good relations are provided. Statutory guidance to support this Bill will reinforce those duties. The noble Baroness, Lady Sharp, said that there is a lot of guidance and regulation in the Bill—I accept that there is—and she asked whether we could make more detail available. We issued quite a number of policy papers in key areas covered by regulations in the other place. I shall make those available to noble Lords before we go into Committee. As we proceed through the Committee stage, we shall make more information available. I shall deal briefly with two final, important issues: first, the issue of listening to children and whether such a matter should be on the face of the Bill. We see the input of children and the views that they express as of immense importance in developing local children’s services, including childcare and early education. I have given a great boost to the role of schools councils in relation to primary schools and the very important work that they can do to give children a voice. I believe that we can do more for the under-fives area too. I entirely agree with the noble Baroness, Lady Walmsley, when she said that four and five year-olds are quite capable of expressing views about the nature of provision and what is happening to them. The latest children’s centre practice guidance states that local authorities,"““must consult with parents and children about what is offered and how””." It provides examples of how that should take place and the practice elements of the statutory guidance on outcomes will reinforce that. My right honourable friend the Minister for Children gave a commitment in another place that we will require local authorities, by means of regulations, to take account of the views of children. She said:"““We agree that early childhood services will be effective only if they engage not only parents, but children who use them. I am committed to that, and so are the Government. That includes listening to the views of children under five years old who use the service””.—[Official Report, Commons Standing Committee D, 8/12/05; col. 83.]" In Committee, I shall be more than happy to consider whether we should take that further. Our commitment in this area is very strong indeed. The noble Baroness, Lady Walmsley, mentioned cautions and convictions which are difficult and complex in relation to young people and which risk excluding them from the children’s workforce for life. I take that issue very seriously and it may be better if I deal with it next week on the Safeguarding Vulnerable Groups Bill, but I do note the point. In conclusion, I shall deal with the early years foundation stage. Leaving aside the issue of precisely which word we use to describe the activities to be undertaken in respect of that, I believe that we would all agree that the importance of the state setting out learning and development goals is worth while if it is conducted sensitively and in close co-operation with best professional practice in that area. We are talking about an early years foundation stage which is very far from being about formal education and formal teaching. The early years foundation stage will continue to promote, as Birth to Three Matters and the foundation stage successfully already do, the kinds of activities and experiences that all good parents already undertake as a matter of course with their children and that they would want and expect to see in any good childcare setting. For example, practitioners who read and speak to babies and young children are helping or—if I can use the word—teaching children early speech and language development. That activity also supports or teaches social development. Those are precisely the kind of activities that we would all wish to see underpinned through the EYFS. In another place, my right honourable friend published Early Years Foundation Stage:Direction of Travel Paper, which sets out these issues. I shall circulate it to noble Lords and I believe that your Lordships will be able to see that there is no insidious plot by the education department to nationalise or in any way to force feed children the early stages of the literacy strategy, as might be feared. In that paper, my right honourable friend said:"““Our aim is that the early years foundation stage should replicate the things which good parents do as a matter of course with their children and which they would therefore expect to see in a good childcare setting””." That sums up our whole intention in the Bill which is to see that things happen in communities that good parents do as a matter of course with their children and that they would therefore expect to see in any good childcare setting. I have always regarded a fundamental principle for change and reform in this area to be that what a good parent would wish for their children, so the state should wish for children at large. That is a principle that goes back to Tawney, as expressed in those terms. It is a principle that underpins all that we are seeking to do in the Bill.