My Lords, the debate today has been constructive, heartfelt and highly useful. I thank all noble Lords who have taken part. The contributions made highlight the extensive knowledge and experience of childcare policy across the House and, as the noble Lord, Lord Touhig, said, I am very lucky to have received so many helpful comments. I am delighted
that so many noble Lords across the House have offered their support for the aims of the Bill and the Government’s commitment to doubling the entitlement to free childcare for working parents of three and four year-olds. I hope that noble Lords will forgive me if I am not able this evening to respond to all the points made in detail, but I will do my best. I also commit to writing before Committee to all those who have spoken today and I expect to be able to provide further detail on some important issues at that time.
As we have heard today, the first few years of a child’s life are critical to shaping their future development. That is why the current entitlement ensures that all three and four year-old children can access 15 hours a week of quality early education to prepare them for school, improving their life chances. It is the Government’s intention that extension of the free entitlement will enable families to make choices about what is best for their circumstances. Doubling the amount of free childcare available for working families will give parents the chance to go back to work or take on additional hours at work—increasing their income but crucially not seeing their childcare bill rise as a result.
My noble friend Lady Eaton and the noble Earl, Lord Listowel, raised the importance of the developmental needs of children and the importance of high-quality early years care. The Effective Pre-School, Primary and Secondary Education project provided highly influential evidence on the benefits of high-quality early years education and explored pre-school as a predictor of outcomes over time for children aged three and four. The project showed, as the noble Earl, Lord Listowel said, that attending pre-school had a positive and long-term impact on children’s attainment, progress and social-behavioural development.
Many noble Lords mentioned quality, which is of course vital. This Government remain committed to driving up quality in the early years. A qualified, high-quality workforce is essential and the Government have helped nurseries to recruit the staff they need through generous funding for early years teacher training. I am pleased that the quality of providers continues to improve. More than 83% of providers are now judged good or outstanding compared with 69% in 2009.
The noble Baroness, Lady Jones, asked, as did the noble Baroness, Lady Tyler, about how the implementation of the Nutbrown review is going. The noble Baroness, Lady Andrews, the noble Earl, Lord Listowel, my noble friend Lady Stedman-Scott and the noble Lord, Lord Touhig, asked about the early years workforce. The workforce is better qualified and better paid than in 2009. We have established more robust qualifications at level 3 and level 6, raising the status of the profession and the quality of provision. We have supported that with bursaries for level 6 early years teachers and support the sharing of expertise and skills across the sector—for example, using teaching skills networks to get private and school nurseries working together.
The noble Earl mentioned Dr Lesley Curtis. She is helping us through teaching school alliances to support quality improvement in private, voluntary and school nurseries. Her nursery school is one of the leading lights in this innovative new approach to schools and nurseries working together. Sir Michael Wilshaw yesterday
launched a new common inspection framework, which places a very strong focus on the quality of teaching and learning and improved outcomes for children in all registered early years settings.
The noble Baronesses, Lady Bakewell and Lady Tyler, talked about the importance of childcare for disadvantaged children. We agree and that is why in the previous Parliament we introduced the two-year-old offer and the early years pupil premium, and why the entitlement to 15 hours of free early education is universal for all three and four year-olds. It is important to consider that disadvantage is not a simple divide of working and not working. Indeed, we know that around half of the families who are entitled to a place for their two year-old are working. These families are working hard to support their children and in future will be able to plan ahead to their children turning three knowing that they will be able to receive 30 hours of free childcare a week, reducing their childcare costs and giving them a real choice about returning to work or taking up more hours. We must do all we can to support families out of poverty, as the noble Earl, Lord Listowel, said, and I am delighted that the Child Poverty Action Group has welcomed the extension of the free entitlement, describing it as an “extremely positive move”.
I also take this opportunity to reassure noble Lords, including the noble Baronesses, Lady Bakewell and Lady Tyler, the noble Lord, Lord Touhig, and others, who asked about disabled children accessing this new extended entitlement. I wish to be very clear that parents with disabled children must have the same opportunities as other parents to access the entitlement. Where parents of disabled children would like to go out to work we want to make it easier for them to do so. We are committed to helping families with disabled children and since the passage of the Children and Families Act we have introduced new EHC plans, provided £30 million for families to access independent supporters and given more rights to parent-carers of disabled children so that they have same assessment rights as other carers. I am sure that the funding review will consider significant evidence on the funding issues for disabled children that noble Lords have raised.
The noble Baroness, Lady Howarth, asked about the Government’s position on using private funds to supplement publicly funded early education places. I am happy to meet her to discuss this further. Local authorities have a statutory duty to secure early education places free of charge for two year-olds from low-income families, looked-after two year-olds and all three and four year-olds in their area. It is an important principle of the early education entitlement that access to a government-funded early education place is not conditional on the payment of any fee or the purchase of additional hours or services. This would be a significant financial barrier for many families and we do not want any child to be prevented from accessing the benefits of early education.
The noble Baroness, Lady Howarth, asked about providers working with children with additional needs. Local authorities have the flexibility to pay a higher rate to providers working with children with additional
needs, in respect of the additional costs of meeting those needs, in order to ensure that all eligible children can take up their fully funded early education place. The Government are reviewing the cost of providing childcare and have committed to increasing the average funding rate. We want this new entitlement to be available to all eligible parents who want to take it up. As I have said, the review will take a broad look at the costs of providing childcare for all children and will therefore include children with additional needs.
I am pleased that noble Lords have welcomed the clarification that “working” will be defined as the equivalent of eight hours per week, will include self-employed work, and that lone parents will be able to access the entitlement. Further, more detailed criteria will be subject to consultation in due course, but so far as the point of the noble Baroness, Lady Massey, is concerned, it is not intended to apply to grandparents. However, I must take issue with her on her numbers in respect of the closure of children’s centres. The important point is that we have a record number of parents and children using children’s centres—more than 1 million.
I will deal now with a couple of technical points. The question was raised that the Bill extends to England and Wales but a “qualifying child” of a working parent is a child in England. The Bill, when passed, will form part of the law of England and Wales as a single legal jurisdiction, but Clauses 1 and 2 apply only to children in England, and Clause 3 applies only to English local authorities. This is normal in legislation relating to childcare, since it is a devolved matter and dealt with by the Welsh Government.
My noble friend Lord True, who I know is very well briefed both as the leader of Richmond Council and by his wife—who I understand was Montessorian of the Year in 2011—raised a point about criminal offences. I can assure him that this is intended for serious cases relating particularly to the protection of people’s confidential data, as is the case now for the current provision, and for cases of fraud.
The right reverend Prelate the Bishop of Durham and my noble friends Lord True and Lord Browne raised questions about stay-at-home parents. There is no intention to undermine the vital importance of stay-at-home parents. The formation of attachments at an early age is crucial, and we are supporting stay-at-home parents with the marriage tax allowance and through changes to the pension scheme. My noble friend Lord True also asked whether I would meet the Montessori Schools Association and other providers. I will be delighted to do so, and will discuss this with him. The noble Lord, Lord Sawyer, raised a point about pay rates for early years. We hope that the funding review will raise the average hourly rate.
The noble Baronesses, Lady Jones, Lady Pinnock and Lady Andrews, and other noble Lords raised questions about the overall funding for the scheme. It is imperative that we carefully cost this policy and ensure that we find the right balance between being fair to providers and delivering value for money to the taxpayer. In doing so, there are a number of factors to consider: how many three and four year-olds there will be in the future, obviously; what proportion have working parents; how many four year-olds will have a
reception place; how many parents will take up the offer; how many of the 15 hours they will take up; the savings that will result from working tax credits and other subsidies to parents; and, of course, the average funding rate to providers. On the last point, the funding rate is of course central to the debate, and we have taken note of the sector’s concerns. That is why we were the only party to commit to a review of the cost of providing childcare and the only party to commit to increasing funding. As I clarified to the noble Baroness, Lady Pitkeathley, on 3 June,
“our current estimate is that this will cost around £350 million, to be delivered from reducing the tax relief on pensions for those earning more than £150,000 a year”.—[Official Report, 3/6/15; col. 412.]
We want to make sure that funding for providers is sufficient, which is why we committed to the increase in the funding rate.
The noble Baroness, Lady Jones, my noble friend Lord True and others asked about the capacity of the system to deliver this increase. We know that working parents with children use many different forms of childcare, depending on their income, working pattern and the age of their children. It is important now that the market can be flexible in how it responds to the choices that parents wish to make. The market is healthy and growing, delivering childcare through a broad range of providers.
As I mentioned in my opening remarks, our latest figures show that we now have 230,000 more childcare places than in 2009. The UK childcare market was worth £5 billion in 2013-14, and a recent report suggested that demand further increased by over 50% in the current year. So this is a vibrant sector with a demonstrable ability to respond to previous changes to entitlement, as it has to the two year-old offer and the expansion of the three and four year-old offer. But, of course, expansion must be delivered in a way that is flexible and affordable for parents and provides quality. We have committed to consulting parents and childcare providers on how this will be implemented.
The noble Baroness, Lady Jones, asked about primary settings for nurseries, and the noble Baroness, Lady Massey, pointed out that they tend to be of very high quality. Under the free school programme, we now allow applications for primary schools to include applications for nurseries. Although it is true that many primaries may be full, many have capacity; it varies substantially by geographic location. I take the points made by the right reverend Prelate the Bishop of Durham, my noble friend Lord True and others about the specific capacity of certain providers.
The noble Baronesses, Lady Pinnock, Lady Andrews and Lady Bakewell, and the noble Lord, Lord Sutherland, raised important points about the actual costs of nurseries and the question of cross-subsidy, and the noble Baroness, Lady Pinnock, about flexibility. As I mentioned in my opening remarks, a review of the cost of providing childcare is already under way. The reviewers want to see as much evidence as possible, and I encourage interested organisations to respond to the call for evidence. This is available on Directgov, and I will write to Peers with the details of how to find it.
The right reverend Prelate the Bishop of Durham, the noble Baroness, Lady Pinnock, the noble Lord, Lord Sutherland, the noble Lord, Lord Touhig, and the noble Baroness, Lady Bakewell, raised the question of stretching provision over a longer period than 38 weeks. The Bill will allow this, as is already allowed for the 570 hours offered at the moment. Regarding the current 570 hours—15 hours a week—we say in guidance that parents and providers need to be aware that there is no requirement for all early years education to be delivered over 38 weeks. Local authorities should enable parents to take the current entitlement in a pattern of hours that stretches the entitlement by taking fewer hours over more weeks where there is sufficient parental demand and provider capacity. Delivering flexibility for parents is an important principle for government in this Bill and will be important in consultation and in the funding review.
The right reverend Prelate the Bishop of Durham raised a point about providers insisting that parents have to purchase hours during holidays as a condition of getting the free entitlement. We are clear in our current statutory guidance, and therefore in the contracts between local authorities and providers, that the 15 hours of early years education should be free of charge to parents. We do not want to see conditions or extra costs attached. The Childcare Bill gives us full powers to impose similar requirements, and we will be examining this carefully in consultation.
My noble friend Lady Eaton asked how the provision will be delivered. Obviously these matters will be considered in consultation in the funding review. Specifically, as my noble friend rightly says, local authorities play a very important role. We fully intend and need them to continue to do so. They have delivered a 95% take-up of the current free entitlement, and I look forward to further discussions on the importance of their role.
The noble Baroness, Lady Andrews, my noble friend Lord True and others talked about the pace of legislation. The introduction of the Bill, with a strong duty on the Secretary of State, sends a clear message to parents and providers about the Government’s commitment. They are expecting us to deliver on our manifesto commitment. They will be able to plan in the knowledge that they can expect this further support for working families, and the market can continue to grow in anticipation. Although the detail that will go into regulations is important, so are the primary powers that we are taking. We will listen very carefully to the issues that the House has raised tonight and will raise in Committee, and I will write with further details to support scrutiny in Committee.
By considering and challenging us on the legal framework at this stage, the House will contribute significantly to the shaping of this policy, but it is equally important to take time to consult providers, parents and local authorities before operational details are fixed. We do not intend to proceed at the pace of a “breathless shriek”, as the noble Lord, Lord Sutherland, said, although I have to admit that that sounds to me rather like a contradiction in terms, even for a philosopher.
The noble Baronesses, Lady Pinnock and Lady Massey, along with the right reverend Prelate the Bishop of Durham and others, talked about the thrust
of the Bill and the needs of the child. I assure noble Lords that quality will be central to our provision, and in all things my department seeks to put the child first.
The message is clear: this Government are on the side of working people, helping them to get on and supporting them at every stage of their lives. That is why we are pressing ahead with these reforms, so that not a moment is lost in getting on with the task—going further than ever before to help with childcare costs, helping hard-working families and giving people the choice to get into work or more hours, as my noble friend Lord Suri has said. Having the right childcare in place means that more parents can have genuine choice, security and peace of mind when it comes to being able to support their family. As I have said, noble Lords will understand that it is not yet the time to draft regulations. We are committed to substantial consultation with parents, providers and local authorities first. We must take advantage of that, as we must of your Lordships’ expertise.
I am grateful to all noble Lords who have spoken today for their wisdom. As I have said, I will write to them before Committee, and I will set out further details of our plans for consultation and a policy statement of the principles that will inform delivery of the extended offer. I look forward to further meetings with noble Lords—with the noble Baroness, Lady Jones, and the noble Lord, Lord Touhig, with members of the Select Committee and others. I am confident that that will support your Lordships in homing in on the issues, enabling us to benefit from noble Lords’ customary high-quality scrutiny. I look forward to discussing this in more detail in Committee, and I ask the House to give the Bill a Second Reading.