My Lords, I have considerable concerns about this clause, which is why I have given notice of my intention to oppose the Question that the clause stand part of the Bill, to initiate a probing debate. As I understand it, the Government’s objectives are to recruit more people to childminding, to improve quality and to make childcare more affordable for parents. Those are all laudable objectives with which I have no argument. I am yet to be convinced that these objectives will be achieved by setting up for-profit childminder agencies. I realise that it would be voluntary for childminders to sign up to an agency. If that was where it ended, that would be all very well. However, I fear that the existence of these agencies could affect non-participating childminders, parents and children. That is of great concern to me. I am aware that pilots are being carried out, but this measure will be in place before they have reported. In addition, when the pilots are assessed will that assessment cover just the agencies themselves, how many childminders they sign up and how satisfied the parents are, or will it go wider than that and study whether there has been any adverse effect on other early years provision in the area?
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I will take the Government’s perceived objectives in reverse order. First, I cannot for the life of me see how this measure will make childcare more affordable for parents. These are profit-making organisations and they will have to set up a whole administration system, provide quality improvement services for childminders and comply with all the regulations. To pay for all that, they will either charge childminders to be registered or charge parents a percentage of what they pay the childminder. Both options will fail to cut costs for parents since childminders are low paid. If they pay the agency, they will have to pass on the costs to parents by increasing their fees. Alternatively, the agency will have to pay the childminder less if they are to keep the cost to parents the same. Childminders cannot afford to accept less money for their services. The average childminder only earns £12,200 per year and has no paid holidays or sick leave. They may earn much less than that.
Let us look at recruitment. I have to accept that it is possible that a new recruit to the job might be attracted by an agency that offered help in setting up the new business, getting registered and trained, and complying with safety regulations. However, good local authorities already do this for childminders so there is really no need for profit-making agencies to take over the role. It is the fear of many childminders, most of whom have declared that they are not interested in signing up to an agency, that, in places where there are several agencies, the services to independent childminders offered by the local authority will be severely depleted
because of issues of scale. They will eventually be forced into agencies against their will. They are independent small businesses who decide when and how long to work and how to go about things, within the safety standards and the early years foundation stage. Those who have been in touch with me say they really do not want to be told what to do by an agency. Childminding will only become more attractive as a profession when they are paid more, but the agency proposal does nothing to achieve that.
Finally, on the most important issue of quality, I am very concerned that Clause 74 requires Ofsted to inspect only the way the agency supports its childminders—and a sample of its childminders. Since inspection is now moving away from local authorities and exclusively into the hands of Ofsted, parents will rely even more than they have done on the conclusion of an Ofsted inspection when choosing a place for their child. How can a parent be sure of the quality of an individual placement if it has not been inspected? On what basis would parents be able to rely on the judgment of an agency? Why should an outstanding childminder sign up to an agency that has only a satisfactory rating?
It seems to me that handing the responsibility for ensuring quality to the agencies is simply a way to take it away from local authorities, many of which have great expertise in assessment and improvement services—but could always do more. Replacing the successful Ofsted registration system for childminders with a fragmented combination of local and national inspection systems risks undermining standards, lowering the professional status of childminders and reducing the transparency of information on quality for families. Broadly, it is difficult to see a long-term future for a fragmented early years inspection system that hands responsibility for certain aspects of inspection to providers themselves. Some high-performing early years systems operate successfully with regulation devolved to local authorities, but there are no examples of privatised regulation. This is an approach that the Netherlands, whose example the agency model is based on, stepped back from after quality problems arose.
I can see only one possible advantage to parents, and that is when their usual childminder falls sick and cannot work. In that case, an agency may be able to provide a replacement at short notice. However, most childminders already belong to networks and often have friends in the business who can help out in an emergency, so even that is not a unique selling point. Why are we rushing to legislate now when there really is no evidence that this will be advantageous to parents or children?
I accept that many, although not all, foster parents are currently found by agencies. However, fostering is a very different situation. Foster parents are inspected by the local authority and have a close relationship with it. In the case of childminders and agencies, they would no longer have that, which causes me a lot of concern.