To ask Her Majesty’s Government how their proposed plans to increase free early-years childcare will be funded.

My Lords, 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. We want to make sure that funding is sufficient to providers and fair to taxpayers. That is why we have committed to increasing the average funding rate, and to get this right we will hold a funding review. Details of this will be announced before Second Reading on 16 June.

That is very good news to the House, but is the Minister familiar with the remarks made recently by the chief executive of the Pre-School Learning Alliance? He said:

“Just about everybody that you talk to who has an ounce of knowledge about delivering childcare will tell you it is underfunded”.

He went on to say that,

“the Government … has no idea how much it costs to deliver childcare”.

In the light of those comments, can the Minister assure the House that the Government do know how much it costs and that essential childcare services will be properly funded?

I assure the noble Baroness that we will be taking this extremely seriously—that is why we are funding the review—and we will protect essential services.

My Lords, what measures will the Government take in delivering this, on the whole very welcome, initiative to ensure that those who are actually providing the childcare are properly paid and properly managed?

We will have extensive consultation with the sector and discuss the rates to ensure that we strike the right balance between the right rate for the providers and fair value for the taxpayer.

Does the Minister recognise that the research clearly shows that high-quality early-years education has long-term benefits in terms of educational and other outcomes for children? In his proposed changes, and particularly with the concerns about funding, will he ensure that we continue to give the highest-quality childcare to our young people?

The noble Earl is quite right about the research, both in this country and abroad, which shows the overwhelming benefits of high-quality early-years childcare. It is essential that we maintain that quality.

My Lords, will the noble Lord define “fair value to the taxpayer”? I have no idea how you measure that. It sounds to me very much like a useful escape clause.

The Conservatives in the previous Government demonstrated very clearly what they mean by “running the country efficiently” and “value for money”.

Will the Minister give an assurance that there will be monitoring of whether children from the most disadvantaged families are able to benefit from this scheme?

We are particularly focused on children from the most disadvantaged families—that is why we introduced the funding for two year-olds from disadvantaged families. This is very much part of the drive behind the policy.

My Lords, in responding to my noble friend’s question about getting some clarity in his wording, the Minister gave another definition which was even less clear than the first. As he clearly cannot answer the question at the moment, can he help the House by giving us a written reply with a clearer definition of what is meant by “happiness”, “joy”, “fairness”, or whatever other phrase he wishes?

Much as I would be delighted to enter into a lengthy correspondence with the noble Lord on those rather esoteric matters, I shall not do so. It is clear that we are at the start of a negotiation between the Government and funders and we need to make sure that the funders are able to provide a good service without making too much profit. I am sure the party opposite will be delighted to hear that.

My Lords, I do not feel that the Minister has answered that question entirely clearly. In the previous Session, the Government cut the funding for Sure Start. Sure Start was clearly shown and validated by Jay Belsky and others at University College London to have a major impact on social cohesion, to prevent certain crimes as children grew older, and to have some benefits for education as well as for cohesion in families. There are measures that can seen, and it seems a pity that that funding was cut. Can the Minister assure us that that will be relooked at so that re-funding can be considered?

Under the previous Government, over the past five years, we increased the provision of childcare by 230,000 places since 2009, and the sector is thriving. We are determined to make sure that every working parent has the opportunity to have affordable childcare.

My Lords, I very much welcome the Government’s commitment in this area—one of the most important areas where we can progress social inclusion over many years. As I understand it, however, the Government’s proposals are for working parents, which suggests that both parents have to be working. Can the Minister assure me that the definition of “working” will not be so tight that it excludes those—for instance, many of the self-employed—who perhaps find it difficult to prove their incomes to other authorities such as mortgage providers?

I can give the noble Lord the assurance that we will not be trying to exclude anyone who should qualify for this with any clever wording in the way that he might be suspicious of. We will provide more details in due course but we are aiming this particularly at parents who want to do a bit more work and find that the cost of childcare prevents that.

How many families do the Government expect will benefit from their proposals?

There are up to 600,000 families that could benefit. Obviously the number that actually benefit will depend on the take-up and the precise numbers of those who are already paying for this, although they too will benefit because although there will not be an increase in provision they will have their existing provision funded.

My Lords, will the Minister please give the House an assurance that, in looking for value for money for the public purse, the Government will also have regard to those people working in the sector having not only the right opportunities for training and professional development but themselves having an income that is justifiable in terms of them being able to have a living-wage life?

The noble Baroness makes an extremely good point about the importance of the workforce in this sector. If we are going to provide the right quality of provision, we need to ensure that their interests are protected.