[Andrew Rosindell in the Chair]
Is Ruth George present to move the motion? [Interruption.] I remind hon. Members that they should be here on time so that debates can begin in a timely fashion.
I beg to move,
That this House has considered the effects of 30 hours free childcare.
I am here now, Mr Rosindell—thank you.
We are all here because we want all our children to get the best possible start in life and to be as ready for school as they can be, and because we want working parents to know that they can rely on high-quality childcare in a fun, friendly and caring setting that is nearby. Those factors are important to ensure not just that our children are school-ready, but that they are happy and relaxed and make friends.
I have four children, aged between eight and 25. As a mum who has worked all my adult life, I can vouch for how important it is for a child to be happy with their nursery or childminder. There is nothing worse than having to leave a child when they are crying or unhappy. That happens with almost all young children in the first few days, but they soon settle down, trust the staff, make friends and have a great time. The only thing worse than leaving a crying child is getting back at the end of the day and finding that they have been unhappy all day.
I have been lucky in the rural area where I live to have had excellent and friendly childcare nearby for all my children. We all welcome the consistent work to drive up standards in early years, so that 95% of providers are now judged by Ofsted to be good or outstanding. We all want good-quality, affordable and sufficient childcare. Although the policy of 30 hours of funded care for three and four-year-olds aims to increase the affordability of care, the lack of Government funding has raised doubts across the country about affordability, quality and sufficiency.
Why has that policy been so underfunded? At the Conservative party’s childcare campaign day on Monday 15 April 2015, in the run-up to the general election, David Cameron said that he would create an extra 600,000 free childcare places if he was returned to power. That was certainly a popular policy. The weekend before that announcement, the Conservatives had been behind Labour in every poll, but the day after the announcement—16 April—they were ahead in every poll, except one that was tied. At the time, the BBC reported that Labour described the policy as “another unfunded announcement”. BBC political correspondent Carole Walker said that Mr Cameron was “likely to face questions” about how the Conservatives would ensure that sufficient childcare places were available. She was right about the questions, but not about the person who would be questioned.
The Conservatives said that the 30-hour offer would result in more than 600,000 extra 15-hour childcare places every year from 2017, and that it would be funded by reducing tax relief on pension contributions. However, when those changes to tax relief were announced in the 2015 summer Budget, we were told that they would fund Conservative cuts to inheritance tax, not childcare, so the extra 15 hours of supposedly free childcare for 600,000 children were left without any specific funding. It is no wonder that the number of places has reduced to a third of what was promised in 2015 and that providers have been left wondering where all the money has gone.
Concerns were raised as soon as the projected funding levels were announced. Some 62% of all early years providers surveyed by the Pre-school Learning Alliance in March 2017 said that the funding they will receive in 2017-18 is less than the hourly rate they charge parents and less than the hourly cost of delivering a funded place. It is not surprising that more than half—58%—expected that the 30-hour offer would have a negative impact on their businesses, and just 17% predicted a positive impact.
My hon. Friend mentioned the Pre-school Learning Alliance. Some Government Members say that they have had enough of experts, but does she agree that they should listen more to groups on the ground, such as my constituent Jane Reddish and her group What About The Children? Its excellent report on the 30-hours policy raises many of the same concerns as my hon. Friend, specifically pertaining to the special developmental needs of nought to 36 month-olds. The Minister would be well advised to meet that group, as the shadow Minister, my hon. Friend the Member for Batley and Spen (Tracy Brabin), soon will.
I thank my hon. Friend for that intervention.
A survey of local authorities by the Family and Childcare Trust in February 2017 found that only a third thought that there would be enough childcare for three and four-year-olds using the 30-hour offer, while a third did not know whether there would be a reduction in care quality as a result of the offer’s roll-out. Some 44% of those local authorities said that the 30-hour offer would reduce the financial sustainability of some settings, so some childcare providers would go out of business. The survey found that the extension of free hours could compromise things that parents thought were priorities for high-quality childcare. That is important, because only high-quality childcare helps to boost children’s attainment and close the gap between disadvantaged children and their wealthier peers.
It was good that the Government introduced pilot schemes in September 2016 to see what would happen. The Minister has claimed that those pilot schemes were a great success. In response to the urgent question on 6 September from my hon. Friend the shadow Minister, when we were finally given some figures on the number of children registered for places, the Minister said:
“If we look at the pilot areas that have been delivering for a year now…we can see that 100% of their providers are delivering and 100% of the parents who wanted a place found one, despite some reservations being put on the record…at the very beginning. The pilots have demonstrated that we can deliver and we are delivering.”—[Official Report, 6 September 2017; Vol. 628, c. 163.]
However, some nurseries that were involved in the pilot tell a very different tale. The owner of Polly Anna’s Nursery in York, the only area on the lowest level of local authority funding—£4.30 an hour, of which £4 went to providers—said that he wrote to the Minister to say that although he was in favour of any Government measure to reduce the cost to families of their child’s early education and care and of any improvement to quality and staff qualifications, £4 an hour would represent an increase of only 2% a year in the 10 years from 2010, at a time when costs will have increased disproportionately.
Does the hon. Lady recognise that an independent study put the cost of providing childcare for three and four-year-olds at about £3.72 per hour, whereas the average amount that goes to a council is £4.94—significantly more?
I accept that a study was done in 2015. That was before we knew the outcome of business rate increases and before we had seen the impact on the sector of the national living wage policy and of auto-enrolment. All those things significantly increased the cost of nursery provision and were not known at the time the study was done, so it is erroneous to use those figures for funding projections up to 2020.
I thank the hon. Lady for giving way. The review of childcare costs was described as “thorough and wide-ranging” by the National Audit Office, so we believe we can base our costings on those figures. Does she disagree with the National Audit Office’s judgment?
In 2015, when those figures were done, they may well have been up to standard, but they do not represent the increase in costs that nurseries have seen in the past two years and certainly will see even more with the increase in auto-enrolment costs and the increase in the national living wage that will be ongoing up until 2020. They figures are utterly at odds with all the evidence that comes from local authorities and from the childcare provision sector, who have given ample evidence about their costs and the amount that they have to pay for the provision. In fact, a provider from the Minister’s own constituency wrote to tell him:
“I ask myself do I really want to continue working as a childcare provider when my wage will now match that of a supermarket worker without the responsibilities of a childcare provider, the paper work, Ofsted and book work. I am sad it had come to this.”
The fact that the Minister claimed he had not heard a peep from providers about their problems, either in the pilot areas, or with the full roll-out, has annoyed many of them. Hundreds of providers have peeped to the “Champagne Nurseries on Lemonade Funding” Facebook group to say that they certainly have peeped.
May I suggest the hon. Lady looks at the record of what I actually said? I was listing the pilot areas and referring to Members of Parliament in the House and the fact they had not raised those issues with me during the period of the trial.
I am afraid I have copies of the emails from the providers in York and Scarborough that were sent during the pilot. They wrote to the Minister about their concerns to do with the pilot that they were participating in, so there seems to be a discrepancy there.
In spite of numerous concerns being raised from the pilot areas, national organisations, local authorities and the sector itself, the Government have pressed ahead with the roll-out. My parliamentary questions in July asking for figures on the number of parents registered and on those who had successfully obtained a place went unanswered. Local authorities were forbidden to give the figures for their own areas, even in response to freedom of information requests, so we had a total lack of information on what was happening up until September, except for reports from parents that they were struggling to register on the website. We heard from nurseries that they were unable to provide the 30 hours and from parents that they therefore could not find places.
In September, in response to an urgent question from my hon. Friend the Member for Batley and Spen (Tracy Brabin), we were told that 152,000 parents had secured a place, 71% of those who had registered. In spite of the contrast with the 600,000 places that were promised originally by David Cameron when this vote-winning policy was announced, we were told that this was a great success. But that great success story still involved nearly a third of parents who had registered not having secured a place at the start of term in September. Some 64,000 children missed out on the important start of term activities where children learn to settle into their nursery or childcare place. When they start late, they always feel as if they are catching up, as routines are already established and friendships made. I hope the Minister will now update us on how many of those 64,000 children have now secured their place, albeit late.
Nurseries are struggling. They have seen huge increases in costs in recent years, as I mentioned earlier. Until June I was on the board of a non-profit-making childcare provider, so I have seen the costs for myself. I set up the pension scheme that sees employers making contributions for their full-time staff. Those contributions are just 1% at the moment, but they will increase to 2% and then 3%, on top of wages. As a trade unionist, I also advised on a wages policy to properly reward all the staff and give incentives for attaining extra qualifications as well as making sure we always paid at least the national living wage.
Paying better wages is an excellent policy, but it needs to be funded, and the funding calculations simply do not take into account the fundamental cost and the increases for every childcare provider. That goes alongside the business rates, where most nurseries have seen a huge hike. It is no wonder the National Day Nurseries Association, from its survey in September, said that the 30-hours policy was in chaos. It said more than half of nurseries had had serious worries about having to increase fees for paid-for hours to unacceptable levels, and even about staying in business at all.
Nearly 300 nursery managers and owners completed the survey, which found that four fifths of those offering 30 hours were having to make additional charges for food and special sessions such as language or sports classes, or trips out. More than half of the respondents said parents understood additional services and were happy to pay, but a quarter said they were finding parents did not want to pay.
My hon. Friend the Member for Batley and Spen (Tracy Brabin), the shadow Minister with responsibility for early years, has just chaired a panel with childcare providers and I have taken down some of the quotes from that meeting: “The system is complex, long-winded and many parents give up”; “It’s not free, so let’s stop calling it free”; “We are making a £5,000 loss every month”; and “This year I have lost 25% of my intake.” Does my hon. Friend agree that such quotes mean that the system is not currently fit for purpose?
Absolutely. I am sorry to have to agree with my hon. Friend.
When almost 80% of nurseries have spent time helping families to apply for the 30 hours, and with 14% saying this had taken more than five hours of staff time per week during the summer, it is no wonder that nurseries are struggling. The policy has had a huge impact in my constituency of High Peak. We have seen three nurseries close their doors over the summer as they simply could not make the finances work. Others have lost out significantly, even when taking on additional children from nurseries that have been lost.
A nursery in Buxton reports that it has lost £19,000 through charging for the meals it used to provide over the lunch period and charging for the additional hours that parents took on top of the 15 hours. Deborah from the Serpentine Nursery says,
“Having run my Early Years provision successfully for 35 years we have taken every change ‘on the chin’, risen to the challenge and carried on without any significant recognition except our Ofsted Outstanding. What other businesses are treated in such a shabby way!”
Flagg Nursery School, a very small village nursery just over my border, in a maintained setting, anticipates it will lose £20,000 a year owing to the lunchtime charges it cannot now make and the payment for the additional hours. The headteacher, Sarah, told me,
“Personally I think it is a great idea to offer 30 hours of childcare for working parents. We have always had children who have attended for the full week but in the past there was a charge. I just don’t feel that the hourly rate is sufficient and is not sustainable in the long term.”
In Furness Vale and New Mills, First Steps Nursery, where my daughter did some work experience, is now losing £10.50 per day per child. It says that if a child takes 30 hours a week, it loses £45 a week for each child. No wonder nurseries are worried about the quality of their provision. First Steps says:
“If we are to continue providing quality for children the rate given for funding needs to increase immensely. We offer our children Forest School and swimming lessons but in order to do this safely we have to have a high staff ratio. The amount we are given does NOT cover this and we are subsidising this so that the children can have the best.”
Flagg’s headteacher spoke of the quality of staff they could employ. She says that staff costs are the most important of all their costs:
“I feel that we ought to have experienced, highly qualified staff working in this sector as these are our most vulnerable children. Experience needs to be paid for though and underfunding could lead to children not being adequately cared for.”
Among my local maintained nurseries there was also concern that the extra 15 hours meant they could not offer places to children who qualified for only 15 hours. The head at New Mills nursery said that the initiative significantly reduces the ability to address the needs of the most disadvantaged children, and was a huge missed opportunity; the assumption is that that was overlooked, and that the initiative was driven by the childcare and working families agenda, not by the impact of quality education on the youngest, and some of the most vulnerable, members of society.
The children with the most need, such as the socially disadvantaged, are not eligible for the additional 15 hours of funding. Being good at closing the gap between disadvantaged children and their more advantaged peers is the very thing for which nursery schools have historically been recognised. Social mobility is an important issue that is not addressed by the 30 hours—something that in many ways contributes to increasing the gap between the poorest and better-off families. There are not enough places for all the children with 30 hours as well as those who qualify for just 15.
The headteacher at Hadfield Nursery School in the north end of my constituency says that the Government have underestimated the number of eligible parents and there are not the places to meet the demand. She is trying to signpost parents to other local providers, because her nursery cannot offer the full number of 30-hour places so they are trying to share them with other providers—15 hours each. It is a worry that as those nurseries have in effect to offer full-time places now, the impact has, again, been to reduce the offer of 15 hours. Those anecdotes from my constituency are backed up by the Sutton Trust, which says that the scheme was not adequately resourced, and the new funding formula will divert resources away from state nurseries disproportionately attended by disadvantaged children. Kitty Stewart, associate professor of social policy at the London School of Economics, said:
“To make up some of the funding gap, a new funding formula reallocates resources away from state nurseries disproportionately attended by disadvantaged children, and they may in the future struggle to afford a qualified teacher. To remove this advantage must be expected to have negative effects on social mobility.”
It is not only nurseries, but childminders, who are affected. They are already struggling. There are now 24% fewer childminders than in 2012—a drop of more than 10,000. Childminders often provide vital home-based care for younger children, or children who would struggle in a nursery setting. One of the childminders in my constituency commented:
“I personally feel that as a nation it is presumed that once a parent returns to work they send their children straight to nursery, when there are alternatives that can provide a more nurturing environment for babies and young children; and this needs to be emphasised—it’s not all about nurseries.”
However, such childminders cannot afford to run the 30-hour scheme, and so they lose out with respect to children coming to them.
What about the impact on parents? If they qualify and they can find a place, parents of three and four-year-olds will have a drop in their nursery fees, even if they have to pay some charges; but parents who qualify only for the 15 free hours, and parents of the most disadvantaged children, struggle to find even those free hours. That will be of huge detriment to their children’s life chances individually, and to social mobility as a whole. Parents with younger children will pick up the bill as charges for younger children have had to increase to make up the shortfall with respect to three and four-year-olds. A mum in my constituency, Emma from Buxton, says that her charges have increased by £230 a month for her one and two-year-old children, and she feels it is not worth her going to work any more. That will have an impact on the most disadvantaged children. Having two parents’ incomes, or having a single parent in work, is an important factor in improving children’s life chances. Emma is worried that the nursery will not even be able to stay open until the oldest child is three, because they are struggling so much to get by. She says:
“So in conclusion we are not much better off in the long run because of how the hours are being offered, and right now we are being crippled by the hike in price. Nurseries have to change their pricing policies in order to survive”,
but they cannot do that in the face of the funding situation.
I am particularly concerned about the impact on the quality of employment in early years, as I have mentioned. My daughter has just completed an early years degree, so I know how much goes into that qualification. She has gone on to do a teaching certificate, so I do not feel that I need to declare an interest, but at many of the nurseries where I have had meetings—particularly among the outstanding-rated ones—there is concern that they will not be able to afford to take on the skilled staff they need to maintain their good ratings. A third of the staff considered by the Sutton Trust, working in group-based childcare, lack English and/or maths at GCSE. Those staff are, unfortunately, the only ones that settings struggling with costs and underfunding will be able to afford. The trust’s chair, Sir Peter Lampl, said:
“Good quality early years provision is vital to narrow the gaps that leave too many youngsters behind by the time they start school. But it’s unlikely that the government’s policy to provide 30 hours…will provide this.”
It is a far cry from the high-quality childcare and fully qualified staff envisaged just a couple of years ago by the Chief Secretary to the Treasury, when she was Under-Secretary of State for Education. There seems to be no emphasis at all in the Government’s policies on quality of provision or of staffing, and that must be worrying with respect to children, progress with social mobility, and our future.
Underfunding of a policy that may have been begun with good intentions—although it may have been more about votes than quality childcare—is undermining what is needed throughout the country. I urge the Minister to look again, especially at the projected figures for the next financial year, now that the additional costs of business rates and of the living wage are clear. I want to thank all those who have consistently been raising the issue of the problems with funding, and especially those who set up and contribute to the “Champagne Nurseries on Lemonade Funding” Facebook group. They have been tireless champions of the best of champagne nursery provision, and excellent analysts of the impact of the funding levels.
I also thank the nursery owners and providers in my constituency—a rural area on which the policy has had a great impact. In small rural towns and villages, childcare—and the knowledge that children can go to nursery in their community and make friends in their area, without having to travel long distances—is particularly important. I particularly thank Kate Sebire, the owner of the outstanding-rated Sunshine Nursery School in my home town of Whaley Bridge, who has been bending my ear about the issue for many months. I hope that the Minister will meet childcare providers, listen to their concerns, and take heed of them when he visits the Chancellor for his pre-Budget discussions.
I advise Members that there is now a four-minute limit on speeches, until the Front-Bench speeches begin.
I will definitely take only four minutes, Mr Rosindell. I congratulate the hon. Member for High Peak (Ruth George) on obtaining what is a key debate. I do not doubt that she has had feedback; I have had similar feedback in South Suffolk, where we have excellent provision. It is difficult for me to avoid receiving representations, particularly from Yorley Barn, a beautifully located nursery in my constituency, in a village called Little Cornard. The proprietor, Donna Row, recently came up and made representations while I was dropping my three-year-old twins off at the nursery. She made the key point that she feels funding is going down while, as has been said, core costs are rising.
I want briefly to focus on Suffolk, because while I accept that many broader political and national arguments are made, there is a national funding formula by which our county seems to have been particularly disadvantaged. The sense of unfairness in Suffolk is compounded by what has happened with the schools formula over the years.
I want to quote from a couple of my providers. A particular issue in Suffolk has been the drive for graduates in early years. This is from Springfields pre-school. Amy Jacobs emailed me to say:
“All research has pointed towards the positive outcome for children who attend an early years setting that is led by an early years graduate. Suffolk…were therefore extremely proactive in encouraging settings to employ graduates to run their settings. This was supported in the early years funding and we were paid £4.24 per child per hour in order that we could pay our staff”
at that rate. She goes on to say that they now receive only £3.87 per child per hour.
I should add that this is something that all Suffolk Members have been working on, and I am grateful to the Minister, who has taken the time to meet us and go through our concerns with his officials in great detail. We also held a meeting at County Hall, for which unfortunately I was ill and unable to attend. However, again, the core point is that funding seems to be lower at a time when costs are rising, so we as MPs have been trying to understand exactly why that is happening and whether it is driven by factors at a county level or because of the national formula.
I will quote from one other provider. Cheryl Leeks, who runs Woodland Corner, said:
“As you are aware, Suffolk County Council reduced our funding for 3 and 4-year-old children by 11% on 1 April with only 7 week’s notice. Historically the rate received from SCC has been higher than the rate we charge for non-funded children—or additional hours. We were always keen to have funded children as we used to receive £4.24 and a block funding allowance of £550 per term.”
She goes on to say that only £3.87 per child per hour will now be provided.
There are complexities—that is showing one side of the picture—but the key point for us in Suffolk at county level is that we feel that, in comparison to other counties, and particularly neighbouring counties, we seem to be doing particularly badly. Like all Suffolk MPs, I received a note from Gordon Jones, the cabinet member for children’s services at Suffolk County Council, with a table of all our neighbours who get a better allocation than we have received through the early years national funding formula.
This issue is obviously important to me personally because I have children in early years, but in Suffolk we have had a huge amount of feedback from very worried providers. I support in principle the drive for 30 hours—it is really important for our economy to achieve the dynamism we want and flexibility in our labour market that we have this greater provision—but there are clearly issues to address. I believe the Minister is aware of that. I do not want to go on too much longer, because we are in the middle of a discussion about it with him. I simply say that we would like him to recognise that there are these pressures not just of the money going down but of costs going up.
I congratulate my hon. Friend the Member for High Peak (Ruth George) on securing the debate. Though I now have the role of shadow pensions Minister, it is children’s issues that are closest to my heart. I considered it a privilege to work alongside the former Member for North West Durham, Pat Glass, on the Childcare Bill Committee when the hon. Member for East Surrey (Mr Gyimah) was Children’s Minister. That Bill led to the Childcare Act 2016 and the launch of the 30-hour childcare offer.
The Minister then chose to ignore statements not just from Labour Members but from providers and charities across the piece that there was insufficient rigour built into the planning for the 30-hour offer. So it has proved to be the case. I well remember one particular exchange I had with the Minister about the need for flexibility in the childcare system, where I sought assurances that parents would be guaranteed the free care they required without having to subsidise it. We have heard how parents are subsidising that care. I was hoping he would legislate specifically to require local authorities to have a duty to secure specific provision to meet the individual needs of parents and guarantee that local authorities would have the resources. He said:
“I feel strongly that setting out in primary legislation a requirement for local authorities to secure provision to meet each parent's individual needs will not work in practice.”––[Official Report, Childcare Public Bill Committee, 10 December 2015; c. 104.]
Sadly, for parents, we were right in demanding such a requirement because, across the country, countless parents and their children are missing out. Had there been a requirement, perhaps the many people who have missed out because they did not know about the provision or how to access it, would have had the support they needed.
This morning I spoke to the manager of the church-based New Life Children’s Centre in Billingham in my constituency, who told me that it had to coach many parents through the Government’s system, and that many others had lost out on their first three months because they missed the Government’s deadline. Her colleagues at the nearby Billingham nursery also spoke of the lack of information provided to parents, many of whom discovered almost by accident that they could access the 30 hours. Perhaps the Minister could tell us what flexibility is being offered to parents in all settings so that they can opt for provision early morning, or at teatime perhaps, to fit in with their work patterns.
On the Bill Committee, we also discussed costs and the need to ensure that the fee structure was developed to reflect local need. We knew that costs were different in different parts of the country. I do not know what work the Minister did after that before moving to his prisons job, but funding is failing to deliver what is needed. We only have to think about children with a disability. People in my constituency and across the country tell me that they are the people who are having the most difficulty in trying to secure a place for their child. Again, during the Bill Committee I sought assurance from the Minister that the parents of children with a disability would not be disadvantaged in the system. He was confident in his response. He said:
“By having tax-free childcare and the high needs block, and also by having increased the hourly rate, we will ensure that local authorities continue to have the flexibility to target funding where it is most needed”.—[Official Report, Childcare Public Bill Committee, 8 December 2015; c. 32.]
It is simply not happening. His confidence was somewhat misplaced, as parents of children who have a disability are still the ones most likely to struggle more to secure nursery provision.
It is all too easy to say that local authorities have the flexibility to ensure that all needs are met. My understanding is that they do not, particularly when it comes to finding the right placement for children with a disability. I ask the Minister to go back, look at the extra barriers facing such parents and find ways to deliver for them much more comprehensively.
The early years will determine the academic achievements of children as they get older. I really worry about those in my constituency and across the country who come from the most deprived areas. They are the children who need the support the most and who are being left without the necessary support. I hope the Government will take a long, cold look at what is happening on the ground and take the necessary action to get it sorted out.
It is a pleasure to serve under your chairmanship, Mr Rosindell. I congratulate my hon. Friend the Member for High Peak (Ruth George) on securing this important debate. The issue of properly funded, decent childcare has a huge impact on families in my constituency and across the country. It would be good to be able to welcome the Government’s actions on that and their commitment to 30 hours’ free childcare, but I see, from talking to both parents and childcare providers in my constituency, that there are clearly serious problems with the proposals and how they are being implemented.
First, the funding is simply inadequate. The shortfall in the Government’s commitment is detrimental to childcare providers. Last week, I spoke to the manager of a successful and popular nursery in Enfield Southgate. She told me that the Government’s plans make her fearful for her business. The inadequate money from the Government will put a terrible strain on the way in which her nursery is run. She told me that parents who used to pay for her nursery privately are now accessing the 30 hours’ childcare, but the shortfall in money from the Government to fund that will put wages and staffing costs under considerable strain. She also told me that if she were to decide not to offer the 30 hours to parents, she would lose out to other companies that will be offering it.
That hard-working nursery manager feels caught in a double bind: does she offer the 30 hours’ free childcare and risk her business making a loss, or does she avoid offering it and go under because others, who doubtless feel similarly trapped, will be offering it? We know from the excellent research done by my hon. Friend the Member for Batley and Spen (Tracy Brabin) that the fears of that nursery manager are not the exception; they are now the rule. Research also shows that three quarters of childcare providers expect the Government’s policy to have a negative impact on their business; fewer than 7% believe that it will be positive.
The Pre-school Learning Alliance estimates that there is a 20% shortfall between the amount the Government are giving local authorities to fund the scheme and the actual cost to nurseries.
Worse still, the Government are proposing that funding levels will stay the same until the end of this Parliament, even though the cost of wages, rents, pensions and much more are likely to rise during that time. Why should nursery managers and childcare providers such as the one I referred to in Enfield Southgate shoulder the financial risk caused by the Government’s ill-considered plans? The proposal of free childcare is far from free if hard-working childcare providers are carrying the cost, to the extent of even being put out of business. That is not to mention the anxiety and disruption caused to parents and children when a trusted childcare provider goes out of business, sometimes at short notice. If the 30-hour offer is to be truly free for both parents and providers, it must be funded properly now and in the future.
The other serious flaw in this pledge is that it will not help those who need it the most. I know from talking to my constituents that many parents welcome the prospect of 30 hours’ free childcare, especially those who are struggling in low-paid, insecure work. However, those who need help could easily slip through the net with this scheme, not least because of the many technical problems that parents are experiencing. After having huge technical problems accessing the scheme, one constituent contacted me last week to say:
“This is the government’s flagship childcare scheme and it’s an utter shambles with no prospect in sight of a resolution.”
Even more disturbing is the fact that to be eligible for the scheme, a parent must earn more—
Order. There is a four-minute time limit. I call Liz Twist.
I thank my hon. Friend the Member for High Peak (Ruth George) for her very clear explanation of some of the issues facing this sector and the concerns of many childcare organisations about the impact of the funding regime. We heard also about the real costs of employing staff, which are increasing, and about the pilots. As late as 31 August this year, the Pre-school Learning Alliance was drawing attention to the funding concerns of many providers. I thank my hon. Friend for her speech.
I want to talk about a nursery in my constituency. Bright Sparks Nursery in Crawcrook contacted me to explain its concerns about the funding arrangements for the Government’s 30 hours’ free childcare scheme and how that will bring financial difficulties for the provider and have an impact upon what it can do for children. Bright Sparks has been established for nearly 40 years and has been consistently rated outstanding by Ofsted, as well as being very popular with local parents. The nursery tells me that it has always offered the funded hours and wants to do the very best for the children there but is struggling with the new scheme due to the lack of funding in the formula.
Bright Sparks charges an hourly rate for three and four-year-old children of £5, and the basic rate locally is £3.85. The nursery gets an uplift from a quality payment, but even then, it is short of 70p per hour, per child in providing the nursery service. Every child is accessing funding in the nursery, which makes a massive difference, and Bright Sparks is now having to work with fewer staff and be less flexible in the sessions it can offer, to the detriment of the families that this policy is supposed to help. As a term-time only, school-hours setting, it does not have the flexibility to recoup money through other payments and is really concerned about its long-term viability under this scheme.
As we have heard, many nurseries and childminders have already closed their doors because the scheme simply does not add up. Bright Sparks fears the impact of this funding shortfall and says that it does not want to be another casualty of this Government. It wants to carry on providing high-quality childcare but needs to meet its essential costs.
Having accessible and affordable childcare is really important to families across the UK, but a policy that does not recognise the real cost of high-quality nursery provision risks reducing the availability of childcare places near to where parents and children live and near to communities, and I fear it will be counterproductive. I ask the Minister to look again at the funding arrangements to ensure that nurseries such as Bright Sparks can continue to operate and achieve high standards for children.
I thank my hon. Friend the Member for High Peak (Ruth George) for giving us the opportunity to debate this important issue.
When a family are spending a majority of their income on childcare, something has to give. We continuously hear how we should be more economically stable in work than out of work, and I am sure we all agree with that. However, that means that we need childcare that is accessible and there for families when they need it. With wages stagnant, and dropping in real terms, 30 hours a week of free childcare would save the average family £5,000 a year. This policy is a positive step in the right direction for families, and I welcome it.
We need childcare that is affordable and people not being priced out of the market; childcare that works for parents, families, and most of all, children. Children learn through interaction, play and exploration, and early years education is fundamental for a child’s development. Every child matters—rich or poor, from north or south, from the country or the city. Each and every one of those children deserves the best start in life. I think we all agree on that, so why are we allowing parents and families to be priced out of early years education, when we all understand that it is vital?
We need to recognise that many families are still unable to access the 30 hours of free childcare. With cuts to local authorities and education budgets, the Government are, unfortunately, failing these families and children. Those children will fall behind other children in their academic, social and emotional development. With cuts and closures to Sure Start centres—I speak as a former headteacher of a school with a Sure Start centre—our most vulnerable families are now without the necessary support and early intervention that they could rely on under a Labour Government. The Conservative party said in its general election manifesto that, by September 2017, three and four-year-olds would be receiving free childcare, yet we have still not had a full roll-out of the policy. On top of that, local providers in my constituency of Colne Valley tell me that it is time-consuming to administer the entitlement.
We need to recognise that many families in areas where the roll-out has taken place have had issues accessing the portal to register. From the perspective of Kirklees Council, there remains a lack of clarity about what childcare providers can charge for as an optional extra, and what constitutes a condition of access. That limits the opportunity for local authorities to champion the rights of parents and families. Prior to the full country roll-out, those issues need to be resolved, to make sure that those families who can be in receipt of 30 hours of childcare can access it. We need a childcare provision that works for the many, not the few.
It is a pleasure to serve under your chairmanship, Mr Rosindell. I congratulate the hon. Member for High Peak (Ruth George) on her heartfelt speech, which was also accurate in highlighting some of the challenges that this project faces.
I put my cards on the table: I think this is a great project. It is something myself and other parties were excited about when it launched, because it is something that myself and my party have been advocating for a long time. I was consequently disappointed that the Government are trying to introduce what is essentially a Rolls-Royce programme, but not with Rolls-Royce-adequate funding. My fear is that, if we do not get this tremendous programme right—it is supported across the piece and across the political parties—for the sake of essentially 42p to 48p per child per hour, the programme could crash.
If the programme crashes, it could be a long time before it is picked up again, not because of a lack of will among the other parties—I know Labour has been pushing for this programme for a long time—but because the industry will be so badly fractured and morale so damaged that I am not sure it will be ready to pick itself up.
I believe that that is quite possible. Recent research shows that 56% of nurseries think they could be out of business in the next 18 months. Let us say, for the sake of argument, that a quarter are affected. If 12%, 15% or 18% of a sector closes its doors and drops out of business, that is a car crash. That is a matter of tremendous urgency, and I urge the Minister to get behind it and to talk to his colleague the Chancellor in the Treasury.
I know the Minister from my previous time in the House, and I have a lot of respect for him. I know that he is passionate about this issue. Although I am sure he will deny it, when he stands up at the end of the debate and says that everything is fine, it is all going to be cushty and nobody is complaining, I know that he will know that is not true. Knowing the Minister from before as I do, my view is that he would support me in the submission that that extra x number of pence—I know it is multiplied many times—would make a considerable difference to this programme.
I know the hon. Gentleman is talking about pence, but is he aware that a 10% increase in funding would be well in excess of £250 million per year?
I am well aware of that. I would say to the Minister that if the whole programme crunches and 20%, 18% or 25% of the providers drop out of the business there will be no business for our children. Truly, I believe that £250 million split across that sector, particularly for something as important for our children and their future, is a price worth paying.
Time is always limited in these debates, so I ask the Minister to consider three proposals seriously. First, will he meet with representatives from the childcare provider and nursery sector, and also from independent providers? In my Eastbourne constituency I know many of the independent providers. They are Ofsted-tested, professional, trained women, half of whom, frankly, I can see pulling out of the industry as independents in the next nine months if the situation is not sorted. Will he meet with representatives from the sector, both nurseries and independent childminders?
Secondly, will the Minister also commit to listen to those representatives and to explore how much additional funding would be needed to just make this programme work? We appreciate that it is early days, but there are always teething problems when things start up—do not even get me going on universal credit, or I will be here all day—and if the Minister met with the people who know how much difference the finances would make, that would be terribly useful.
Last but not least, will the Minister reconsider giving providers flexibility when they make that offer to parents? If they have that little bit of flexibility, they can put on the paper, “This is how much extra we would charge you; you would get this.” I will tell the Minister what happens when they do not have that flexibility: people have to be disingenuous, and I do not like that. I know a lot of the childcare providers and the independents. They are honourable people who care passionately for what they do. If they do not continue being disingenuous, what then? They will go bust—
Happy Tots is a charity-run pre-school in east Ipswich, which has been successfully running for over 30 years. The pre-school has approximately 75 on its roll—there are morning and afternoon sessions for 38 children aged between two and five—and it employs 16 staff. Last year, it was awarded Millie’s Mark for inspiring excellence in paediatric first aid—the only pre-school in Suffolk to hold the award.
Happy Tots has told me that, to implement the 30 hours, it will have to lose some of the places for children who are already attending, as it is unable to recruit sufficient additional staff. Even if it were able to do so, it would need to expand its premises to accommodate the extra child hours, and there are no suitable larger premises in the area into which it could move. It has been looking for larger premises that it can afford for over three years, without success. Any larger premises locally are at a higher rate of rent, which, as a charity, Happy Tots would not be able to afford. Unlike some private providers, it is not able to cross-subsidise its places from paid placements. It is clearly wrong that any provider should have to cross-subsidise anyway, but for those charity providers in deprived areas where that is not an option, the current proposals will threaten their very existence—exactly the opposite of the Government’s declared intention to improve provision for deprived areas.
The £3.87 per child, per hour that Happy Tots will receive under the new funding arrangements is a 25p drop from the existing funding. It may be forced to close the pre-school if it suffers the financial losses that it is expecting. The only way that it can try to ensure that that does not happen is by asking parents—most of whom would expect their children to receive free school meals once they are at school—for termly snack contributions. It is divisive and unjust to expect them to have to pay more for their younger children or, even worse, decide that they are unable to pay, and face the stigma of being parents who cannot provide for their children.
Like my colleagues, I fully support the concept of expanding the availability of childcare, but these proposals are rushed, ill thought out and likely to reduce the availability of childcare, not increase it.
I thank my parliamentary neighbour, my hon. Friend the Member for High Peak (Ruth George), for securing this debate, because investing in quality, sustainable and affordable childcare is, quite simply, the best investment a country can make. It enables children to excel and fulfil their potential, and parents to get out to work and fulfil theirs. It enables communities to become more economically active and more highly skilled, and offers the taxpayer immediate savings in benefits expenditure and in the long-term cost of the NHS, the education system and so on.
I am not usually delighted by Conservative manifestos, but when the Conservatives added a pledge of 30 hours a week of free childcare to their 2015 manifesto, I have to confess that I was delighted to see them nick one of Labour’s best commitments. It meant that, whichever party won the election, childcare was about to become more affordable and more accessible for struggling parents. If ever we should have consensus in an area, it is in this one.
As a parent of a nursery-age child myself, I declare an interest. I have also put three older children through nursery, so I can absolutely relate to the thousands of parents for whom the costs of childcare push household finances to the brink. As Members of Parliament we are all paid on very generous terms, but even so, when my youngest two children were in nursery at the same time, the monthly bill came to more than our mortgage, so the need to get this policy right is paramount. That is why I am so bitterly disappointed that the Government have failed to put their money where their mouth is.
I asked parents and childcare professionals in my constituency to send me their early experiences of the policy. Three clear problems emerged: first, local nurseries and childminders have an unsustainable raw deal financially; secondly, the registration system is chaotic and unfit for purpose; and finally, the eligibility criteria for the scheme are far too strict.
Let me start with the terrible deal that nurseries have been dealt and the dire consequences of that. The amount that the Government have given local authorities to provide these supposedly free hours is simply not enough. It does not cover the cost of wages, premises, utilities, food or learning resources. One outstanding nursery told me that it was losing £500 per year for every free 15-hours place. That will double to an impossible loss of £1,000 per place when extended to 30 hours.
Nurseries that offer the 30 free hours are left at risk of closure because they lose money for every hour’s childcare they provide, but nurseries that do not offer them are at risk of closure because parents will, understandably, choose to go elsewhere. Almost all nurseries are therefore being forced to cut costs, and it is children who pay the price. Given that there is a proven link between the amount that staff are paid and the likelihood of a nursery being rated outstanding, a race to the bottom is clearly bad news for staff, kids and parents alike.
The registration system for parents is far too complicated. My constituent Cat applied online in April. The nursery asked for her code, which had not yet been provided. That code took 10 days to arrive, by which time the nursery was told that it had expired. She has repeated the process several times now, with endless phone calls and emails, and is now anxiously waiting to find out whether her application for her child’s place has been successful. That seems a bizarre set of hoops to have to jump through to gain a funded place at a nursery her child is already at.
I have constituents who are not entitled to these free hours because the Government do not deem them to be eligible. They include John and Nicola Andrews from Dukinfield. John works full time, but Nicola is a trainee midwife. Although she works an excess of 40 hours a week practising and studying for the NHS, because that is unpaid, she is not deemed to be a fit candidate for free childcare. This woman is working hard in a valued public service, but we are not going to help her with her childcare—Minister, that is wrong.
Likewise, I have constituents not in work who would like to return but cannot apply for jobs and attend interviews without childcare being in place. We should simply be offering free hours to parents whether they are in work or not, which is the Labour party policy and should become the Government’s policy too.
Minister, please listen to these concerns. Do not hide behind reports from two years ago. This is a mess and it needs to be sorted out for a better deal for parents, providers and, most importantly, children up and down this country.
Obviously, everyone in this room welcomes the expansion of childcare to 30 hours, but we are hearing that entitlement to that is only if someone is already working. As the hon. Member for Ipswich (Sandy Martin) said, if someone is trying to get work they get caught in this trap where they cannot accept a job because they do not know whether they will be able to organise childcare.
That is one of the differences with the Scottish scheme, which also aims to provide 30 hours; but that is 30 hours across the board, whether someone is working or not. Our approach is partly to help more people into work, but is particularly about looking at it as early learning rather than just childcare. We all face the attainment gap, particularly in the most deprived areas, and lots of research shows that it is already embedded when a child enters primary school. We blame primary and secondary schools for trying to swim against the tide. The aim is that all three and four-year-olds will have 30 hours of accredited nursery places. That is also for vulnerable two-year olds, because the earlier we can interact with those children, the more we can try to make up for the situation that they find themselves in.
I welcome what the hon. Lady says about the need for early learning as opposed to babysitting. She will recognise that the Sure Start system that we developed in England was a tremendous success. We are now seeing the data, with headteachers saying that the children arriving in school are more equipped and school-ready than ever before—all the more reason why we must get this policy right as well.
There is no question about that. My son was in the first year of a four-year entry. The teacher noticed a difference in not having children crying and wetting themselves, totally shocked at being at school, because they had already had a gentle year in nursery. Therefore, when they started school, they went straight into learning. That is available earlier: we have it for three and four-year-olds. However, at the moment, 16 hours is not enough for people and it is not flexible enough. Increasing that to 30 hours and putting it across the board means that more women in particular can use it to get into work, by having it in place already, and we can invest in the early years development of our children.
Any of us with children know that raising them is expensive, and unfortunately families have taken quite a big hit. With the reduction in things such as tax credits—the limitation to the first two children, for example—it has never been harder for families. It is often forgotten that tax credits are for people who work, not for people who are unemployed. We often seem to forget that in these debates. There are many hard-working families who are struggling. As mentioned by the hon. Member for Colne Valley (Thelma Walker), this could save up to £5,000 a year. That is a significant difference; but it is only a difference if someone can find a place. Therefore, if half the nurseries shut, it will be an almighty crisis. If parents have to pay for meals and other trimmings around the edges of the nursery, it is not free at all. In fact people will be hit by that who would not previously have been hit, so some people will be worse off.
We are doubling the funding. The minimum in Scotland will be £4.30 an hour, and the average will be £4.94 an hour, because ours is predicated on the real living wage, not the national living wage. That is the other thing when we talk about entitlement and the quality of nursery education. If there is just a revolving door of people who put up with it and put up with the low wages until they can get something better, we will never grow a profession that is aimed at developing the early years of our children.
We need to get ready for this. Obviously, we are having to expand this out—we need far more places than we have at the moment—so this will be workforce skills development funding. We need more diversity. Some 96% of those who work in early years are women. There are many children who have no good male role models in their lives, and we need to get more men into nursery and primary school to help to provide that. We should have a diverse workforce. There is funding to bring in over 400 more graduates to our nursery provision, because we want this to be about early learning, not just racking and stacking children so that their parents can be at work; that will not achieve what we are setting out. It is important that there is that investment in the workforce.
The most important thing is the empowerment of women to get back to work. That can get women out of the poverty trap. We already save them money. We in Scotland have the highest employment and lowest unemployment rate among women, but there are still women trapped. I remember offering a job to a woman recently. When she looked at all the sums, it was not doable, and the big piece that held her back was her childcare. That will be happening all over the place. This has to be dealt with. In Scotland we have 14 pilots on flexibility going ahead. Many Members have mentioned how inflexible the system is.
I worked as a senior registrar, as a surgeon. I was the first flexible surgical trainee in Scotland. I was paid 21 hours; I worked 50. That is fairly standard in the NHS. By the time I paid a nanny, because I needed to be on the ward shortly after seven, I took home less than unemployment benefit, because I needed to pay her a decent rate. We had to accept that for my career to go forward we had to ride through that and accept the debt, but many of these families cannot afford to work for nothing or less than nothing. If they have a job that has antisocial hours, long hours or is all spread at one end of the week, we need to have that flexibility. We have 14 pilots looking at a whole lot of versions, but the principle is the money follows the child, so that if a family need mix and match, they can have mix and match. That will also allow a quicker expansion. Empowering women and bringing them in will also support the economy.
We have all these brains across the country: people with talent, who have been highly educated. We spend maybe a decade bringing up our children and then do not get back into the workplace. We do not have wraparound childcare for school. We need to invest in women because they are also part of the country’s future economy.
There are things that we are trying to do in Scotland. Things are being discussed here. But if we are going to do this, we have to do it properly.
It is a pleasure to serve under your chairmanship, Mr Rosindell. I thank my hon. Friend the Member for High Peak (Ruth George) for securing this much needed debate. We have heard some interesting and important contributions. I will just go through a few of them; unfortunately, time does not allow me to mention everyone.
My hon. Friend the Member for High Peak powerfully claimed that the pilot schemes were not actually working as the press said, and that there were nursery closures. The hon. Member for South Suffolk (James Cartlidge) acknowledged that there is a problem and tried to understand why. The hon. Member for Eastbourne (Stephen Lloyd) would like to meet the Minister and providers. We heard from my hon. Friends the Members for Ipswich (Sandy Martin), for Stalybridge and Hyde (Jonathan Reynolds) and for Stockton North (Alex Cunningham). We also heard a powerful statement by the hon. Member for Central Ayrshire (Dr Whitford)—I look forward to my invitation to Scotland to see. We also heard from my hon. Friends the Members for Enfield, Southgate (Bambos Charalambous), for Blaydon (Liz Twist) and for Colne Valley (Thelma Walker), who gave all sorts of information about portal difficulties and nursery managers saying that they will be closing.
We have had a wide-ranging debate, so I am going to use my contribution to touch on the most pressing issues. I hope that the Minister will use his closing remarks to answer in detail—regrettably, getting clear information from him to date has been slightly challenging to say the least—because both the Labour party and the Conservatives agree that we need more funded childcare. I stress that the problems raised with the policy are not because we disagree with the policy in principle. However, nearly as soon as David Cameron announced the offer at the 2015 general election, worries that it was underfunded came to light. The Government pushed on the delivery, and the voice of concern about the potential impact became louder.
The Pre-school Learning Alliance found a 20% funding shortfall. The Social Market Foundation and the New Economics Foundation have said that this version of free childcare is regressive. Research from Ceeda shows that nearly half the childcare settings are currently recruiting staff, but four out of five say that they are struggling to fill vacancies. If this were any other industry, we would be talking about a recruitment crisis. The Sutton Trust has warned that, as it stands, the 30 hours of free childcare offer widens the gap between disadvantaged children and their wealthier peers before they start school, as it benefits wealthier families. The Social Market Foundation shows that of the extra money that the Government are pumping into early years, 75% is being spent on the top 50% of earners and less than 3% will go to the most disadvantaged. Many providers have left or are in the process of leaving the sector. Will the Minister include in his summing-up how many Ofsted good or outstanding providers have left the sector in the past six months?
We are now well into the first term of this policy, and the Minister has told us that 216,384 parents have their codes for this term. However, just last night he told me via a written answer that 71% of parents had had their codes validated, but the Department for Education claims that the figure is now 90%, so which is it? Do we take the Minister’s word or the Department’s? I would welcome an intervention if he could clarify which is correct. If the figure is 90%, that leaves 20,000 children without a place during this August term, which will obviously be the quietest, as more children come of age later in the year. Does the Minister share our concern that the sector will struggle to provide places as the year rolls on, because of lack of funding?
We have talked about signing-up codes. To deal with an eligibility code, the application system has to be fit for purpose, which it clearly was not as the August deadline approached. The system’s inadequacies have left parents stranded. There is confusion between Her Majesty’s Revenue and Customs and local authorities as to when the deadline for validating the code is. A constituent of mine has a code that is eligible until 7 December, but as she did not receive the code until 15 September the local authority has said that it cannot fund her place, and all the while HMRC is telling her that there is no problem and that she should be receiving her place. There is no clarity even on issues as simple as the deadline. It seems like amateur hour to me.
Variations from local authority to local authority are becoming a theme, with one authority planning to retain some disability access funding even though that should be passed on in full to providers. Another local authority is charging a provider for every minute that parents dropped off late and collected early, with the charges amounting to £4,000. Others require all providers offering funded places to receive an annual visit from the local authority’s early years team, which is what we all thought Ofsted was supposed to be there for. Getting payment out of local authorities is proving a struggle. Issues include refusing to pay monthly, bringing headcounts forward at short notice and requiring new email addresses and bank accounts in order for payments to be received.
The Minister knows full well that that is not an acceptable way to treat small businesses and microbusinesses. An issue that I have raised with him is that settings will charge for extras such as trips out, nappies and lunches in order to pay their staff and keep the lights on—to stay afloat. Can he guarantee today that there will not emerge a two-tier system whereby parents who cannot afford to pay for the extras do not have access to the policy? Does the Department intend to monitor the additional charges placed on parents, and will he commit to reporting on that? Will he consider a cap on those charges, or will it be a case of parents who cannot afford the extras being sent to the end of the waiting list?
If there is one thing noticeable by its absence, it is that the Minister never wants to talk about the quality of childcare. The Labour party has a policy to move to a graduate-led workforce and to put child outcomes at the heart of early years policy, by funding our policies properly. It is curious to me that the Conservatives do not have the same goals. Often, the highest-quality provision comes in the form of maintained nursery schools, many of which are seeing numbers drop, as they cannot offer 30 hours because of the cost of lunch provision. Nursery schools, which are often in the most deprived areas, provide excellent care, closing the gap between the most deprived children and those more fortunate.
Many children from deprived communities currently have access to quality nursery schools that employ qualified nursery school teachers. Those schools do a tremendous job of enhancing those children’s life chances, but they assure me that they will not be able to fund the continued employment of those qualified teachers. It is important that we distinguish between childcare and early years education. Save the Children is concerned that 40% of nurseries that took part in the pilot reported a loss in profits and, therefore, a threat to their sustainability. When I asked how many children were registered with maintained nursery schools for this academic year, the Minister was unwilling to share that information. Will he do so today?
When the Minister last spoke in the Chamber, he mentioned that he would like to get the 5,500 dormant childminders “back into that business”, but how will he do that if their wraparound care is not necessarily part of the 30 hours provision? Childminders are often highly qualified women with a level 3 national vocational qualification who have been Ofsted-assessed. I have been told categorically by a number of constituents that the county council funding provided means that they will go bankrupt. They are just going to throw in the towel—why bother?
I encourage the Minister to think again about a major injustice to childminders in this roll-out. His Department has relaxed the parent-child ratio for childminders who provide wraparound care. Is it the Government’s intention to relax that further in an attempt to make the funding work? Is that the way forward for childminders? How many freelance working parents have been excluded from the entitlement because they cannot guarantee that they will work more than 16 hours a week on the national minimum wage? The reality for many working parents in my constituency is that their employers will not guarantee them those hours, and nor can they, which makes it even harder for parents to return to work.
In the Chamber, the Minister said:
“There are colleagues in the House from places such as York, Northumberland”—
he goes on to list them—
“which have been in the pilot for a year. I have not heard a peep from anyone saying that the scheme is not working, so obviously the pilot has been successful.”—[Official Report, 6 September 2017; Vol. 628, c. 173.]
As my hon. Friend the Member for High Peak mentioned, those nurseries are having trouble squaring the circle. When papers, experts, providers and think-tanks all say that the policy is not sufficiently funded to work, surely it is time to reassess and ramp up the finances so that it is properly funded?
I have been startled by the number of providers who have said to me that they will not be able to take on children who need extra support. If such a child presented, they would put the child on a waiting list or gently suggest that there might be a better setting for them. That is discriminatory, but not unexpected when nurseries are budgeting to try to stay afloat, rather than to offer the best, most comprehensive service.
In conclusion, there is little doubt that the 30 free hours of childcare will be a welcome relief to many parents. It will bring childcare costs down for many parents, particularly at the upper end of the income scale, as research by Nursery World and the Resolution Foundation found recently. However, there is no getting away from the fact that this policy is chronically underfunded. No matter which way we look at it, providers are going to pay the price. The sector is known for its quality and passion—it transforms young people’s lives—and if the Government put that in peril with this policy, I suspect that they will not be forgiven lightly. As the Minister is well aware, tens of childcare providers are in this Chamber who would like to hear his views. Will he rethink his offer to come and meet them, as he originally intended?
Does the hon. Member for High Peak wish to exercise a short right of reply at the end?
Yes, if there is time.
I will make time for the hon. Member for High Peak (Ruth George) to respond. I congratulate her on securing this important debate and thank her for contributing to the debate on the urgent question on 6 September about the 30 hours of free childcare. I welcome her involvement in the all-party group on childcare and early education, and look forward to attending its meetings in due course.
I almost feel as if I am living in a parallel universe. I spend a lot of time visiting nurseries; indeed, yesterday I met someone who owns six nurseries in the south of England that are engaged with the scheme and delivering childcare on the basis of it.
I think I mentioned the parallel universe to the Minister in the Chamber. The nursery provider in his example has six nurseries and may be able to square the circle, but we are also concerned about the smaller providers.
Precisely. Indeed, the proprietors of many smaller providers often work in their nursery, so their costs are not necessarily higher.
There has been some confusion about the number of children who are eligible. Children become eligible as they turn three. We predicted that there would be approximately 200,000 eligible children in September, followed by another 100,000 or so after Christmas and Easter. Those are the figures that we have always borne in mind. We also estimated that only about 75% of parents would apply for the scheme—a similar figure to the proportion of more disadvantaged families who apply for the free 15 hours of care for two-year-olds.
Will the Minister give way?
May I make some progress? A lot of points have been made in the debate, and I would like to answer some of them.
I am sure that all hon. Members present join me in acknowledging that, for many families with young children, childcare is not just an issue, but the issue. In many cases, the costs of childcare are a huge barrier to work, particularly for those in lower-paid jobs. Some parents still spend over a third of their take-home pay on childcare—and when I say childcare, I mean good-quality early years educational experiences. Indeed, 93% of the delivery is good or outstanding.
The Government’s priority is to ensure that parents who want to work after having children can do so, and that the cost of childcare is not a barrier. We therefore delivered in September on our promise to double the free childcare available for working parents of three and four-year-olds. We are also supporting parents with childcare costs, through working tax credits and universal credit—where up to 85% of the costs are covered—and tax-free childcare, which provides a 20% subsidy that is worth up to £2,000 per child per year and up to £4,000 per year for disabled children. That answers the point made by the hon. Member for Stockton North (Alex Cunningham) about particular help for disabled children.
Will the Minister give way?
I have very little time left, so I will make some progress now and give way at the end if I have time.
The Government are committed to giving every child the best start in life, whether their parents work or not. The 30 hours of free childcare are helping the lowest-paid working parents to manage their finances and have more money left over for their children’s needs. A lone parent needs to earn only around £6,500 a year to access the 30 hours of free childcare. Parents can apply for the 30 hours if they have a job offer; in answer to the hon. Member for Stalybridge and Hyde (Jonathan Reynolds) and the SNP Front-Bench spokesperson, the hon. Member for Central Ayrshire (Dr Whitford), I can confirm that we can issue a code on the basis of a job offer even when Her Majesty’s Revenue and Customs has no track record of a person’s income.
The problem is that a job may start quite quickly. Having a ticket does not mean that someone has found a place. That is the advantage of already being in a place.
As the hon. Lady points out, we have tranches of entry, so anyone who has an offer in August for a job that will start in September could get a code. The situation is similar for people who want more hours. We have been as flexible as possible in ensuring that those codes can be given. We take people’s word for it that their job offer is real, but when they confirm the code it becomes apparent.
This provision builds on the existing 15 hours a week of high-quality early learning that workless households of two, three and four-year-olds are entitled to. We know that starting education early makes a difference to long-term attainment and earnings, and that work is the best route out of poverty to transform children’s life chances. I heard this week from a school principal who had supported parents of two-year-olds getting the free hours to retrain and take up employment when their child became eligible for 30 hours. That is a fantastic outcome from a programme in its infancy. The 30 hours is making a real difference.
I cannot believe that the Minister is not receiving representations that list the problems with this policy. Let me give him an example that I could not fit into my speech in the time available: my children’s school is ending free provision for under-fours, because the funding simply does not work as it has worked in the past. There is actually a net reduction in provision. Is he honestly saying that he is not receiving messages like that from around the country?
I am surprised to hear that from the hon. Gentleman, because Tameside council in his area received a 25% increase in the hourly rate given after our review. We are putting our money where our mouth is.
As hon. Members will know, we rolled out the policy with a pilot that delivered for 15,000 children, and on 1 September, we rolled it out nationally, so that all eligible parents could join the 15,000 families in our pilot areas already benefiting from 30 hours. As expected, demand for the 30 hours offer has been high, and more than 216,000 parents have successfully received eligibility codes for the autumn term. I am pleased to be able to update the House: 90% of those codes have been checked by a provider on behalf of a parent seeking a 30 hours place. That is up 19 percentage points from 71% when I last reported, which is fantastic progress.
Of course, that figure may still continue to increase slightly, but I want to be clear that I do not expect it to reach 100%, because we cannot predict parents’ choices and situation. People’s circumstances will change. Not every person who successfully applied for a 30-hours code will decide to seek a free place for their three or four-year-old. Some parents will want to stick with a provider who does not offer 30 hours; other parents who applied for tax-free childcare and were eligible for 30 hours and who were issued a code will not want to take up that place because they might use the tax-free childcare offer. The figure may increase slightly, and I will keep the House updated.
Before the Minister concludes, I would like him to return to provision for disabled children. I accept that there is additional money in the system that was promised, but provision simply is not ramping up to the extent needed. What more can the Minister do, beyond funding, to encourage providers to give us facilities for disabled children?
Children with special needs certainly need special provision, and we are keen to ensure that we can continue to deliver that. As we move from the old statements to plans in mainstream education, it is proving an effective way to identify the children most in need. We must also consider how to help those in their early years as well.
Will the Minister give way?
Will the Minister give way?
No. I have very little time—three minutes—and I need to make a few points.
I am hearing fantastic individual stories showing the extraordinary impact that 30 hours childcare is having on families up and down the country. For example, a local employer in Staffordshire recently told us that parents who work at their factory no longer have to hand over their children in the car park as one parent clocks off and the other clocks on. Families like that are now enjoying family time together, rather than passing each other like ships in the night.
I will quickly cover one or two of the points made in the debate. The hon. Member for High Peak and the hon. Member for Colne Valley (Thelma Walker) mentioned nurseries no longer being able to charge for lunches or additional hours. That is not the case. The early education strategy guidance is clear that providers can charge parents for meals and consumables, and for hours outside the free entitlement. Parents must not be required to pay any fee as a condition of taking up a free entitlement place. Many parents with a long working day need additional hours, and the system includes great flexibility,
I thank the Minister for giving way. Does he intend to cap those costs? Such charges will be what keep nurseries’ lights on and their staff employed. Will there be a two-tier system, and will he cap the costs?
Nurseries are entitled to charge for additional hours and meals, nappies and other consumables, and they are free to charge what they wish, but a parent with a code can shop around and get a place that meets their exact requirements. As I said, 90% of the codes issued have now been taken up by providers. We are seeing many flexible arrangements: for example, a nursery and a childminder may work together to deliver provision.
I must conclude, but there are a number of other points that I would like to have made. I will write to hon. Members to answer their specific points when I get the opportunity. I am proud of how the 30 hours childcare offer is transforming families’ lives. Parents up and down the country are enjoying more time with their children, more money in their pockets and less stress because the programme is cutting the cost of childcare. I hope that the hon. Member for High Peak has a few moments for a winding-up speech.
I thank all my colleagues who have made such excellent speeches and good points. I simply ask the Minister to revisit the costings and meet providers to learn from them, especially those in outstanding settings employing graduate and fully qualified staff in order to provide the best-quality childcare.
Sitting adjourned without Question put (Standing Order No. 10(11)).