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Childcare Settings: Financial Viability

Volume 643: debated on Monday 25 June 2018

5. What assessment he has made of the effect of the Government’s policy on funded childcare on the financial viability of childcare settings. (906004)

The rates that we provide to childcare providers were based on the review of childcare costs, which was described as “thorough and wide-ranging” by the National Audit Office. We have recently commissioned new research to further understand providers’ care costs.

Last week, the National Day Nurseries Association found that nurseries faced an annual deficit of £2,000 per child on the 30 hours of childcare policy. That means that nurseries are struggling financially; a skills shortage as workers quit the sector; and fewer nurseries for parents to send their children to, or more nurseries with under-qualified staff. When will the Minister conduct an honest review of the chaos that he has caused across the sector?

Thirty hours is a success story. The summer numbers are 340,000 children aged three and four benefiting from 30 hours a week free childcare. For those parents taking advantage of that, that is a £5,000 saving a year. We are conducting a review to look at the economics of the model, as we have done in the past, when we raised the hourly rate from £4.65 to £5. It is a huge success story, and clearly the hon. Gentleman is running scared.

May I ask the Minister to explain how the Government intend to increase free childcare for foster carers, which is a great idea?

My hon. Friend is right. We have listened carefully, including to many views in this Chamber, and we have delivered. As of September, foster carers who qualify for the 30 hours a week free childcare for three and four-year-olds can take advantage of it.

The Minister will know that nursery schools, as distinct from nurseries, provide first-class education in deprived areas in the early years. However, their funding is still in doubt beyond 2020. When will the Minister make an announcement about these nursery schools and put nursery schools in Wolverhampton, which provide good and outstanding education, on a sure financial footing?

There are 402 maintained nursery schools. The hon. Lady has championed their cause and I have seen at first hand the great work they do. She is right that the funding goes up to 2020. Clearly, we have to see what happens, but they are a very important part of the mix of provision.

Childcare is a critical enabler to allow parents to access further education. Nottingham College, in a move reflective of the exceptionally difficult landscape facing further education, has chosen to shut its nursery in my constituency. That is wrong, and I am campaigning with local residents and councillors to keep it open. Does the Minister agree that access to childcare is an important driver of accessing further education?

I do agree that access to childcare is very important. I will look at the specific details the hon. Gentleman mentions, but suffice it to say that we are investing £50 million more to help schools to open a nursery setting.

May I push the Minister further on the report from the National Day Nurseries Association, which was mentioned by my hon. Friend the Member for Liverpool, Walton (Dan Carden)? Not only is there, as mentioned, an annual funding deficit of £2,000 per 30-hours child, but a third of nurseries are having to limit the funded places they offer and a third of nurseries are being paid late for the work they do. To support our childcare providers, will the Minister tell us how many local authorities will see a real-terms funding increase in the next academic year?

The hon. Lady rightly speaks about the important research by the NDNA. Our own research demonstrates that 80% of providers are willing and able to offer places, and one third have actually increased their places.