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Childcare Bill [HL]

Volume 765: debated on Wednesday 14 October 2015


Relevant documents: 2nd, 5th and 8th Reports from the Delegated Powers Committee

Amendment 1

Moved by

1: Before Clause 1, insert the following new Clause—

“Funding review

(1) Sections 1 to 3 shall not come into force until the Secretary of State has—

(a) established an independent review of the free childcare entitlement funding system, including a large-scale analysis of the cost of delivering funded places; and(b) put in place a comprehensive and sustainable funding solution, which takes into account the complete findings of the review under paragraph (a), and which addresses the funding of existing childcare and the additional requirements on childcare providers arising from this Act.(2) The review to be established under subsection (1)(a) shall consult local authorities, childcare providers, employers, parents and others with an interest.

(3) Where the Secretary of State’s funding solution under subsection (1)(b) does not follow the recommendations of the review under subsection (1)(a), the Secretary of State must publish a report outlining the reasoning.

(4) Any report published under subsection (3) must be laid before each House of Parliament.”

My Lords, we have repeatedly said that we support the concept of extending free childcare. It was a manifesto pledge and I do not need to repeat the arguments because in principle we share the Government’s ambitions on this issue, as do most of your Lordships in the Chamber today. But we want a policy that will not just grab the headlines; we want a policy that will work. Sadly, this is where we and the Government part company.

The truth is that the progress of the Bill has been an exercise in how not to make legislation. The Government have incurred the wrath of both the Constitution Committee and the Delegated Powers Committee. To recap, the Constitution Committee criticised the Bill in the following terms:

“Legislation of this type increases the power of the Executive at the expense of Parliament. The Childcare Bill is an example of a continuing trend of constitutional concern to which we draw the attention of the House”.

Meanwhile, the Delegated Powers Committee described it as a “skeleton” Bill, saying:

“The remarkable imbalance between the provision that appears in the Bill itself and what is to be left to regulations, and the scarcity of explanation in the memorandum, has led us to question whether members will be in a position to contribute meaningfully to debates at Committee Stage and Report Stage”.

Despite the Government agreeing to go away and consider these concerns, the latest report of the committee, issued yesterday, is scathing. It says that the committee is,

“surprised and disappointed that many of our recommendations have not been acted upon. It appears to us that the amendments add very little … to the face of the Bill”.

This lack of detail was raised by us and others in Committee. In order to make progress, the Government made a number of commitments about further information that would be available on Report, at the heart of which was a promise to conduct, and report on the findings of, a funding review which would explain how the additional free childcare hours would be funded. This information is fundamental to the success or otherwise of the Bill.

In response to our amendments on this issue in Committee, the noble Lord, Lord Nash, acknowledged our concerns. He said that,

“we are conducting a thorough review. The review will report in the autumn and will inform our decisions on the level of funding that providers require to deliver quality childcare, and as I said, we will report on these findings by Report”.—[Official Report, 1/7/15; col. 2161.]

This could not be clearer, but, sadly, this is not what has happened. We will hear today from the Minister that the Government have reported in advance on part of the review—the part based on a call for evidence of people’s experiences in the childcare sector. Of course these responses are not to be dismissed, although, by the Government’s own admission, it was not a scientific survey—but that is not the point. The point is that there are real questions about how these new places are to be funded and what will happen if they are not fully funded. This was to form a central part of the funding review and, sadly, this is what we have been denied so far.

There were also real concerns from the sector that the way the funding review is being carried out has raised a number of queries. I have received numerous messages of support for our amendments in the light of that. For example, I have received a detailed critique from the CEO of a nursery chain in Stafford setting out his concerns about the way the survey and the follow-up round tables were conducted by Deloitte. He said that the survey questions were far too imprecise and open to subjective interpretation, rather than an attempt to gather detailed unit cost information. He further reported that at a well-attended and well-informed round table in Coventry, there was considerable concern that the evidence already gathered by respected bodies such as Ceeda and the PLA was simply being ignored. But we are never going to have the opportunity to scrutinise this evidence. In fact, we are now being told that the final funding review will not be published until the Chancellor has conducted the spending review on 25 November—well after the Bill will have left the House.

At its core, this is not about the Government’s disregard of Parliament, important though that is. It is important because we do not believe that the offer being made for free childcare in this Bill is viable without a considerable injection of money. Quite frankly, we do not believe that the Chancellor will be persuaded to find the necessary additional funds to make the scheme work. Why is this important? The current nursery providers gave evidence to the Select Committee on Affordable Childcare that the current scheme is being run at a loss, with complicated systems of cross-subsidy. Put simply, if you increase the free hours, you reduce the opportunities for cross-subsidy, and the whole scheme collapses.

The Pre-school Learning Alliance, which speaks for many in the private nursery sector, has estimated that the cost will be at least 20% more than the Government’s original estimate of £350 million. It stresses the need for a sustainable mechanism to ensure that funding rates cover delivery costs in the long term, and that is what we are seeking. Meanwhile, a recent IPPR report says that the Government have grossly underestimated the cost of this scheme, which they calculate to be £1.6 billion in 2017-18: £1 billion more than the Government’s estimate. The National Association of Head Teachers found that almost 80% of the nurseries based in schools are cross-subsidising the places from the rest of the school budget, as they are running at a loss, and that two-thirds thought that they would have to reduce the number of children they could accommodate if the new entitlement went ahead.

When we met yesterday, I got the impression from the Minister that he was sceptical about this evidence, but I assure him that it is robust and that there is considerable strength of feeling on this matter. Unless this is resolved, there is a real prospect that the offer in the Bill could help fewer, rather than more, children and that the parents who need the free places most will be the ones to whom access will be denied, because they cannot top up the nursery income through the non-subsidised places. These concerns go to the heart of the Bill. We want the scheme to work and be sustainable. This is why we are proposing these amendments, which will require the Government to complete a large-scale analysis of the costs and produce a detailed funding solution which can then be considered by both Houses before the Bill is enacted.

I stress that this would not delay the Bill’s implementation. The implementation date is autumn 2017, which is two years away. According to the Government’s road map, the report on the funding review will be made shortly after the November spending review, so there are some 20 months or more to achieve this objective. We believe that it can be done in that timescale.

Without the cash being made available, the Bill is worthless. Without knowing the true costs of the scheme, the Government are not in a position to make any promises on it. We therefore hope that noble Lords will support the amendment, which is crucial for delivering the free places which all noble Lords want and which can make a difference to the lives of working parents. I beg to move.

My Lords, it might first be of benefit to the House if I make a few points. I would like to thank noble Lords for their support during the passage of the Bill so far. I would particularly like to thank noble Lords whom I have met since Committee. I have found these conversations extremely helpful and I hope they have, too.

The Government are committed to supporting working families. That is what the Bill is about. It enshrines that commitment in law, with a new duty on the Secretary of State to secure 30 hours’ childcare for working parents of three and four year-olds. As the Secretary of State set out last week, the Department for Education’s focus should not be stakeholders or vested interests; our focus is unashamedly on children and their parents. The Bill makes that clear.

I have listened carefully and with great interest to the concerns noble Lords have raised throughout the passage of the Bill. As the noble Baroness said, I undertook in Committee to confirm a number of details ahead of Report. I hope that the package of support published earlier this month, the policy statement and the government amendments I have tabled, deliver on those commitments. I have had feedback from noble Lords across the House that this was helpful. I have listened to the debate on ensuring that Parliament has the opportunity to provide appropriate scrutiny on the detail of secondary legislation. We listened and tabled amendments in response.

Subject to the debate today, the first set of regulations made under the Bill will be subject to affirmative procedure. The amendment in question was informed by the first report of the Delegated Powers Committee and I thank the committee for meeting again on Monday to consider our proposed changes to the Bill. I am pleased that it welcomes the Government’s efforts to respond to early criticisms. The noble Baroness rather overstated the case by saying these were scathing, though I note that there are areas where the committee would like us to be clearer in our intentions. I will address these points at the appropriate time during today’s debate.

Noble Lords raised concerns about the detail and breadth of the Bill. We listened to and consulted parents and providers over the summer. On 2 October, we published a policy statement setting out the key milestones up to implementation in 2017, the delivery model and details of who will be eligible for the extended entitlements. Our amendments reflect those new details.

In Committee, noble Lords also understandably asked for reassurance on the quality of the childcare that children will receive under the Bill, and in our policy statement we have made clear that the quality of early education and childcare and the welfare of children remain paramount. I believe that the further things that I will say today in response to amendments on, for example, staff to child ratios, will provide even more reassurance.

Turning particularly to matters relating to this group of amendments, in Committee many noble Lords raised a number of questions about the funding review, which is the most comprehensive national review of the funding of childcare ever conducted. I will respond fully to the debate on this shortly. However, I take this opportunity to make clear that we have listened. In response, we published the terms of reference for the funding review, the findings of the first part of the review and the call for evidence, which received more than 2,000 responses. Yesterday, I was pleased to host a very informative meeting for Peers to meet the Minister for Childcare and Education and the department’s chief analyst. I would be very happy to host another such meeting following the spending review. We have no interest whatever in producing a funding regime which does not work for providers. We have substantially increased the amount of childcare over the last five years successfully, and we are confident that we will do so this time.

This Government are spending considerably more than any other on childcare, and we want to give more working parents choice and flexibility about the childcare they access. We have already heard from working parents, employers, representatives from the childcare sector and unions, and received nearly 20,000 responses to our public survey over the summer, which showed that parents strongly welcomed the new entitlement. Further support for the entitlement has been demonstrated by the poll of parents carried out by Netmums, which showed that the Government’s offer of more childcare is wanted, needed and eagerly anticipated. The survey also suggests that the reform will encourage more parents to work more hours.

I urge the House not to seek to delay this entitlement for working parents. Parents are demanding of us, and in response we should move quickly to put the new entitlement in place. During the election, we committed to 30 hours of free childcare, and we were the only party to commit to a review of childcare funding. We are now challenged on moving too quickly with some aspects and too slowly with others. Providers are keen for legislation. More than 1,000 providers have already come forward to ask to be involved in early implementation.

As many will understand, it is important that we give providers, local authorities and parents time to prepare for this substantial change. We want to move the Bill forward and take the next steps with regulations, consultation and, very importantly, early information. As the shadow Secretary of State for Education said recently, we now need those policies to be turned into reality. I completely agree.

My Lords, I thank the Minister for the statement he has just made, for the policy statement which he provided us with over the summer and for the briefing yesterday, which demonstrated that detailed work is being undertaken to understand the different business models of providing for childcare.

However, one element fundamental to ensuring that 15 hours of free extra childcare per week can be delivered at high quality is funding. In Committee, we were assured that that information would be available prior to Report to enable a full understanding of the Government’s commitment in terms of the amount of funding. At that stage, the Minister gave a commitment that the Government would announce by Report the findings from their call for evidence as part of the funding review, so that we could have details of the delivery model based on the principles laid out. Unfortunately, that is not available.

Waiting for that information will not cause a delay. The background analysis of the information has been carried out. We heard about it yesterday, and very good it is too. But the figures have not been put into the crunching machine, so we do not know how much will be available to fund this important element of improved childcare—increased hours—that we all welcome. I do not see how, as Members of this House, the role of which is to scrutinise legislation to try to improve it, we can fulfil our responsibilities unless we have that information. We support the Bill, but the funding is fundamental.

All through the progress of the Bill, on all sides of the House, we have made the point about the lack of information—both on the regulations and on the amount of funding that would be available. We have tabled an amendment about cross-subsidisation, which has already been raised in relation to funding. I will speak more about it when we come to the amendment.

The only commitment we have from the Government, as expressed in their policy statement, is that there will be an increase in the hourly funding rate for childcare. What we do not know is how much that will be. It could be 5p an hour. It could be £5 an hour; I hope it is but we do not know. Without knowing, I do not see how the other elements of the Bill can stand up to scrutiny. How can we assure ourselves of the quality of childcare that will be provided if the amount of funding that is available is not declared? How can we be sure that training for staff in childcare can be made available if the funding is not there? How can we be sure that the number of places will be available if the amount of funding does not support an increase in the number of places that will be required? It is fundamental to the success of this Bill—and we all want it to be a success. I urged the Minister to tell us how much money will be available. Unfortunately his hands are tied, and I appreciate that. That is why we ought to delay discussing this Bill, until we know how much will be available, because everything else depends on it.

At the moment, it is the equivalent of being told that we can buy a car when we do not know whether we can afford a second-hand Mini or a brand new BMW. Young children need and deserve better than that.

My Lords, I listened very closely to what the Minister said about the progress that has been made since Committee. Clearly there has been some progress, but I want to press him on certain points and to reiterate the points of colleagues across the House. The Select Committee said that it was surprised and disappointed at the Government’s response. It was surprised because it is unusual—very unusual indeed—for a government department not to respond more positively to a report of the committee. I will come back to that in more detail. Certainly I am less surprised than the committee, but I am equally disappointed. I understood, like many of us across the House, that what we were to expect, before the start of Report, was a full analysis of the impact that these changes would make, based on the information obtained about the costs borne by the sector and the distribution of those costs, so that the House, to quote the noble Lord, will,

“be able to say a lot more about the delivery model”—[Official Report, 1 July 2015; col. 2093.]

Frankly, that promise has not been fulfilled. We do not know more about the delivery model, we cannot comment on it and we cannot make more sense of it.

When I looked at the road map, which I was pleased to see although my copy is a bit faint, I was slightly surprised to find that the report on the funding review was shown after the spending review. I conclude from that that the Government had, indeed, known that the report would come after the spending review, and therefore, frankly, did not have much expectation that they could present those findings to us on Report. I have a serious question for the Minister: when did he realise that he would not be able to provide those full findings for us? I think he had two choices. He could have maintained the promise he made to the House that we would have the information we need to debate the full impact and make a proper judgment about the implications of the changes to the sector and the funding issues. To do that he would have had to delay Report stage. The second choice is the one he actually made. I know that in all conscience he was under some pressure from all round the House to delay this stage of the Bill so that we could have a proper debate. In fact, the second choice has been to try to persuade us that the research on the sector done so far is sufficient for us to rest content and trust the Government that all will be well in the best of all possible worlds.

I do not blame the officials at the department one bit for the situation that the Minister is in. They are struggling to master a huge policy change with masses of information, multiple reviews, huge complications and an absurd timetable. There are many potential perverse consequences, as my noble friend on the Front Bench explained. The Minister ought to concede this point and consider delaying further stages. He should do this not least because much of the information coming forth—for example, from the online questionnaire to parents and the responses to the cost of the childcare review—raises more questions than it answers. The responses to the questionnaire for parents reveal, for example, that around 89% of respondents would take up the additional hours if they were available now. That is good news in terms of demand, but what is not clear, unless I have missed it, is how many of those parents already pay for childcare. What does that take-up do to the whole balance of subsidy across the sector? How many providers might be driven out of business because of that?

I turn to the analysis of responses to the call for evidence on the cost of providing childcare. If the Minister argues that what he meant by “findings” was, in fact, this analysis of responses, which is what he has argued—in fact, it is more of a description than an analysis—I am afraid that he is on extremely shaky ground both ethically and intellectually because the Government have now introduced the concept of a first and final stage of findings. We thought there was one stage when the findings would be produced for the House to make a judgment on.

I argue that not only are there no useful conclusions to be drawn so far from the document we have, but what is presented is simply a quantitative breakdown, which shows that the whole childcare sector is highly fragmented, fragile, confusing, based on very many different models of practice and contracts, and not well documented, as the report makes very clear. Even basic information is not sometimes sound. In fact, the report comments that items such as the main areas of expenditure,

“might not necessarily be the areas where they incur most of their costs”.

In short, what has emerged from this analysis so far is what is surely self-evident: that staff-related costs—namely, wages—are the main cost drivers.

I am not denying the usefulness of this information, but what it reveals is the case for proper analysis and assessment because the reality is this hugely complex sector. This surely reinforces the argument that if we are going to have a proper policy which delivers an expanded capacity, better services for more parents, higher quality and enables more parents to be in work, the impact of those changes on this sector has to be fully analysed and properly understood. With great respect to the Minister, the findings that he has presented, while interesting, are so raw that for the most part they tell us what we know, but nothing about how the capacity or quality of the sector will be affected.

The Delegated Powers and Regulatory Reform Committee is scathing. The Minister has put a favourable gloss on it but it actually says that,

“we are surprised and disappointed that many of our recommendations have not been acted upon. It appears to us that the amendments add very little of substance to the face of the Bill: for the most part they adjust the existing delegated powers by removing some, varying others and adding more, while re-parading many in a new clause. Although the changes to some delegated powers may give the House a clearer idea of how the powers could be exercised, it remains unclear how they will be exercised”.

There is much more like that.

I think I have said enough to make it clear that I believe that a wise Government acting in the general interest of the sector would delay. In the absence of such a decision, the House should support the sunset clause. As the noble Baroness, Lady Pinnock, says, this does not create delay. This policy will not be introduced until 2017. What will create delay is a dog’s dinner of a policy confusing and frightening the sector into withdrawing services so that fewer people rather than more are able to access them.

My Lords, I welcome the progress that has been made during the Recess and the various meetings the Minster has had, not least yesterday’s briefing session, which I think all of us present found useful and informative. It did not give us all the answers that we want. I shall come back to that in a moment.

I also welcome the report of the Delegated Powers and Regulatory Reform Committee. It properly criticised the procedure we are going through, which is not ideal and is certainly not perfect. The question is whether it should be continued because the benefits will be significant, or whether it should be halted. I do not accept that this would not involve delay. It is important for the health of this Bill and its implementation that we proceed with further analysis, and almost more importantly, the pilot studies. It is only through pilots that we shall begin to see where the real practical difficulties arise, many of which have already been mentioned by my colleagues on the other Benches. The pilots have to take these points on board and test the adequacy of the proposals.

As I said, I welcome yesterday’s briefing. From the discussion, I saw a new capacity—not willingness, but capacity—for flexibility in the Government’s response. The Government will have to exercise every jot and tittle of that flexibility in responding to the comments that are made and the views that are shared across this House. The other view we share is that we want this Bill to be passed. We want action.

The difficulty with the amendment is not the demand for a review. The review is under way and we have to get going further with it, and we had a helpful and professional briefing yesterday. However, the amendment’s second demand is that a sustainable funding solution be presented before moving to the next stage. Politics is the art of the possible. That is not possible. It can come only after the funding review across the whole of government has taken place. I do not want to make much of this at the moment, but I note in parentheses the view of the Select Committee that hard choices would have to be made. I have yet to see recognition of that from the Government, but that is a consequence we shall see when the final financial package is revealed.

That said, that seems to me an inadequate reason for such a measure, granted the moves that have been made, the flexibility that was shown yesterday, and what so far has been shared with us. There is much further to go. Granted all that, I am in favour of moving ahead to the next stage, which means that I cannot support this amendment as it stands, but I welcome the provision, for example, regarding a further meeting with the group of interested Peers when the funding situation is clear, so that our views can be formally and openly expressed.

I shall simply add to what my noble friend has just said a concern that I have, as vice-president of the Local Government Association. The Minister well knows that local government faces a funding gap of probably £9.5 billion, and £6.6 billion of cost pressures by 2020. My concern relates to the development of the Childcare Bill, about which I am very positive; for working families, it will make all the difference. My question is about the wider envelope of the funding review. When we get that review, will we actually understand in those totals what local authorities will have to give up and where the pressures will be to meet the extraordinary cost of childcare provision? We have to be very aware of the perverse consequences that might arise, and I would like the analysis to look at the pressure on small units in particular. Loss of the cross-subsidy will result in them having to close, because local authorities are not prepared to pay top-up fees; as the Minister knows, I have personal experience of that happening.

In conclusion, will the wider envelope take account of not only the Childcare Bill but the other pressures on local authorities? If so, what kind of priorities will be set, and can the wider review examine the cross-subsidy issue and the loss of places across the country?

My Lords, I have listened to the comments made in support of the amendment—Amendments 30 and 31 are really just consequential. The amendment requires that the report on finance should take place before Clauses 1 to 3 come into force in an Act of Parliament. It does not require information to be provided at Report. What is more, the amendment contemplates that the clauses will be enforced before the review can take place and be completed. The arguments in support of the amendment are therefore not precisely in accordance with the amendment itself, because the terms of the amendment would be satisfied if the information came forward before the clauses were brought into force—which, of course, is after the Bill reaches the statute book.

I shall make one brief comment just to remind your Lordships that there probably will not be a better opportunity in this Parliament to improve social mobility. A well-funded early education service is one of the best means to ensure that the least advantaged young people and families do better and have a fair chance equal to those who have greater privileges. What is at stake is that, if this Bill is adequately funded, we will expand that offer to many more families; more parents will go into work, lifting their children out of poverty. Yes, mainly it will benefit the middle class, but it will also benefit some of the more disadvantaged. If the Bill is not adequately funded, this will not only be a poor offer but it will steal money from and impoverish the rest of the service. So we need to be absolutely clear that we have here either an opportunity to make a difference to social mobility that we will not otherwise have in this Parliament, or an opportunity to fail. Perhaps it is comforting to realise that, because the Prime Minister’s commitment to social mobility may give us some hope that, even in this difficult financial climate, the money will be found to make this work.

My Lords, I would like to speak to Amendments 1, 30 and 31 tabled by the noble Baronesses, Lady Jones, Lady Pinnock and Lady Tyler and the noble Lord, Lord Touhig. I understand the concerns that the noble Baronesses and the noble Lord are seeking to address through these amendments. I share their view that we need to get the funding for the entitlement right. Much of the success of the extended entitlement rests on sustainable levels of funding. However, I do not agree that these amendments are the right way to deliver that outcome. Indeed, it would simply risk delaying substantially implementation for working parents, which has been widely welcomed. This Government have already shown their commitment to ensuring that funding levels will be sufficient to deliver the 30 hours’ free childcare for the working parents of 3 and 4 year-olds. The Prime Minister himself has already committed to an increase in the rate paid to providers; indeed, we were the only party to commit to such an increase during the general election.

We have acted swiftly upon our promises. Within a month of the general election, we brought forward this legislation and committed to early implementation of the extended entitlement for parents in some areas from 2016, so that we can test the provision, which is so important. We definitely do not wish to delay, because although 2017 may seem a long way off, there is a lot to get right. At the June budget, we made financial provision for the extended entitlement, announcing £840 million, including Barnett consequentials, in 2018-19. That is the current estimated cost before the average hourly rate that providers receive is raised and indicates a further commitment by this Government to the delivery of the extended entitlement. We have listened and addressed the concerns of a sector that has been asking for a review of funding for early years, by establishing a review on the cost of providing childcare as soon as possible. As I have said, this is the most detailed national review of childcare that has ever been conducted. It is a very complicated issue, as noble Lords heard yesterday, and we do not believe that we should delay.

I hope we can all agree that it is clear that we share the same objective—one which the noble Baronesses and the noble Lord have set out in their amendments. We, too, want to establish a sustainable funding solution that addresses concerns about the delivery of the existing entitlement and supports providers to deliver the extension to the entitlement. We have no interest in a solution that will not work for providers. Under the last Government we expanded childcare very substantially and successfully and we fully intend to do so again.

Noble Lords raised the question of funding and the funding review in Committee. Understandably, there were many questions about how the review would be conducted and what it would cover. We have sought to provide more information about the analysis of the first findings of the call for evidence, the terms of reference and the policy statement. The Government have also made very clear their intention to publish the final report from the review following the spending review. The findings from the review will feed directly into the spending review, which is imminent, as we all know. That is where decisions about future funding rates will be made. It is important therefore that the review is complete in order to inform this process. The Budget and the spending review are the appropriate times for the Government to set out their spending plans and Parliament debates those plans at the appropriate time. Legislating for the childcare entitlement is not the time to have this debate.

However, I have listened to concerns raised by noble Lords about ensuring that this Bill is scrutinised by Parliament once the Government’s spending plans are made clear at the spending review. Third Reading will be on 26 October and the Bill will then be sent to the other place in the usual way. It is then only four weeks until completion of the spending review. Although noble Lords would not expect me to be able to comment on the precise timetabling of business in the other place, there are no plans for the Bill to reach Royal Assent before that review concludes. I hope that noble Lords will find that statement helpful.

A delay to the coming into force of key provisions of the Bill will have a knock-on effect on the ultimate delivery of childcare to parents, delaying our consultation process as well as the start of early implementation. The purpose of the review is to provide a robust analytical underpinning for a funding rate that is fair for providers and delivers value for money to the taxpayer.

The review team is considering a significant body of existing and new evidence, such as published research and academic studies, and evidence provided by sector representatives, as well as studies recently commissioned by the Department for Education conducted by a number of consultancy companies. Some noble Lords have met the review team which, led by the department’s chief analyst, is working on two key analytical strands. I think that noble Lords found the meeting yesterday with the chief analyst helpful. I am sorry that the noble Baroness, Lady Andrews, was not able to come yesterday, as I think she would have found it very informative. However, if she would like me to set up a separate meeting for her to meet the chief analyst, I would be delighted to do so.

The first of these two analytical strands looks at providers’ costs and the second considers the supply and demand side of the childcare market. Both are complicated and key to informing our work. The review team recognises that there is huge variation in costs between different providers and between children with varying needs, and the analysis and modelling will allow scenario testing to understand the drivers and consequences of these differences, which will inform our testing in the early-implementation pilot studies.

In Committee many noble Lords raised the importance of the review looking at the costs of providing childcare for children with additional needs. It is absolutely right that it should do so, and we are grateful to those specialist providers and charities that have helped us with this question. We will extend the analysis in the review to consider the characteristics of the families that will be eligible for the new entitlement, including which families it will help back into work or help to increase their income. Details like this are extremely complicated, yet we are clear that they need to be considered carefully to ensure that the system is funded to support all children who wish to access it.

The Government greatly value the opportunity to engage with those who are directly affected by our policies. We have been engaging extensively with all of these groups, both through face-to-face meetings and via other channels. Key organisations in the sector such as the National Day Nurseries Association have welcomed the extended entitlement and have been key partners in the delivery of the review of the cost of childcare. While we are aware of their concerns on the delivery of the extended offer, we have sought their involvement in the development of our policies and the review in particular.

Noble Lords will have seen the report we published on 2 October on the analysis of the responses to our call for evidence. We had over 2,000 responses, the majority from providers—and, as I have said, already over 1,000 providers have come forward, wanting to be involved in the pilot studies. These responses gave us very useful information, which is informing the content of the review. The findings from the call for evidence will help us put into context the work we are doing on understanding providers’ costs. The review team has followed up to gather more detailed information from some of the providers that responded to the call for evidence.

As part of our plans for engaging with stakeholders we have also held a series of round tables over the summer across the country. The round tables have been a valuable opportunity to engage with providers face to face and to tease out some of the issues that were raised in the call for evidence, building on the significant body of evidence that we are considering and looking at the challenges that providers will face in delivering the extended entitlement, while always remembering that the providers would not be doing their jobs properly if they were not asking for more money, because we are, after all, in a negotiation with them.

The childcare sector is healthy, vibrant and growing. It has grown substantially in recent years—by 12% over the three years from 2009 to 2012. It is not a sector that is severely underfunded, and the number of providers offering places under the entitlement has also continued to increase. The market has demonstrated that it is able to respond to the extension of the free entitlement. We just need to look at the rollout of the entitlement for disadvantaged two-year olds, which was introduced in the last Parliament.

I turn now to the proposal of the noble Baronesses and noble Lord for a review to be independent. In coming to a decision about the most appropriate type of review, the timings of different review options, as well as the cost to the taxpayer, were significant factors leading to our decision for this to be a government review with an element of external validation and scrutiny. We determined that the most appropriate approach would be a cross-government review with expert support from outside.

We all know that there is a rigorous and time-bound process supporting any government spending provisions, particularly when increases to particular budgets are involved. Our priority has been to secure our knowledge and understanding of providers’ costs and to inform the discussions on sustainable funding rates during the spending review this autumn. An independent review would have taken significant time to set up and its findings would, therefore, not have been available to feed in to the spending review. This is a vital point. It was important that we move quickly to set up the review and meet our commitment to providers to increase the rate.

We believe strongly that the review under way strikes the correct balance of needing to move quickly and thoroughly. If we now delay, it would be for a considerable period of time because, as I have outlined, the issues here are complicated and it would take considerable time for an independent review to get its mind round it. This would put under threat the timing of delivering the full offer in 2017, because it would delay the consultation, the regulations and, most importantly, the pilot schemes.

I am very grateful to the noble Lord, Lord Sutherland, for his comments on this. He so ably argued and explained why a delay would be a bad idea, and grasped quickly the fact that it would not be a short delay.

I am grateful to the noble Earl, Lord Listowel, for his comments about the impact that the Bill will have on social mobility, as it lifts more families into work or into more work.

As for the comments of the noble Baroness, Lady Howarth, I know that she is very experienced in the field of local authorities. I found some of her comments yesterday particularly helpful. As for the wider envelope and taking that into account, I do not know about that, but I will take it back. My noble friend Lady Evans will talk later about cross-subsidies, but I can assure the noble Baroness that this review is very comprehensive, taking into account all the issues that local authorities will face, and I will take her points back.

I hope that I have provided sufficient reassurance as to the rationale for the way in which the Government have decided to conduct this review and the robustness of the processes that we are following. As I set out, the outcome of the review will be published later in the autumn, as, of course, will the spending review. It will provide sufficient explanation of the Government’s intentions and the next steps, and will be made available to Parliament. As I have said, there are no plans for the Bill to reach Royal Assent before that review is completed. I am happy to ensure that there will be further opportunity for this House to scrutinise the details of the legislation after the spending review has been published. As I mentioned in my opening remarks, I would be happy to host a further meeting with the funding review team after the spending review, if noble Lords would find that helpful.

As I will outline when we debate a later group of amendments tonight, the Government are proposing that the secondary legislation under the Bill will be subject to the approval of both Houses. This will provide an opportunity for further debate on the details of entitlement, once the funding review has concluded.

I hope noble Lords will agree that placing in primary legislation a requirement to conduct a review, which is already under way, is not necessary and could in fact delay the positive progress that has already been made if the Government were required to stop and begin again once the Bill receives Royal Assent. I therefore urge the noble Baroness and the noble Lords to withdraw their amendment.

My Lords, first, I would like to thank noble Lords who have spoken in support of our amendments. I also thank the Minister for his statement and his subsequent comments. The Minister raised other issues in his statement that relate to other amendments, and I know that noble Lords will want to pick that up when we get to those items.

I want now to concentrate on the specific issues relating to the timing of the funding review. The Minister did not address in his response the concerns of the Delegated Powers Committee, which has once again criticised the Government for a lack of detail in the Bill. It does not believe that the case has been made for why all the detail should be contained in secondary legislation, to be seen at a later date, rather than in the Bill. I was sad that the Minister was not able to respond to that today.

Secondly, the Minister did not address why the Bill is being rushed through in advance of the outcome of the funding review being known, which might, as we have heard, fundamentally alter the shape of the package that will be on offer because of the complexities which I think we all now understand. In particular, he did not answer the question asked by my noble friend Lady Andrews about when he first knew that he would not be able to let us have the information that he promised us at an earlier stage. A lot was riding on that at the Committee stage and we feel let down by his lack of commitment.

I hear what the Minister said about the timing of the funding review and that it would be published after the spending review in November, but nothing that he has said so far has provided any reassurance that even Members of the Commons will have the opportunity to scrutinise the Bill at that stage. Clearly, the outcome of the funding review would need to be before them at the Commons Committee stage for there to be any chance of scrutiny of how the scheme will work in practice. Although I listened carefully to the Minister, I do not believe that he gave such a commitment.

This amendment is not about delaying the Bill. The Minister talked about scrutinising evidence and about consultation. All those things can go ahead as planned and still take place—we have got two years before the implementation date—so I do not believe that what we are asking for is unrealistic. There will be plenty of time before the Bill comes into force to allow the outcome to be published and properly scrutinised by both Houses, so the current rush to the statute book leaves us feeling sceptical about the motives.

I was saddened to hear the noble Lord, Lord Sutherland, comment that he thought that a sustainable funding solution was unobtainable, because the scheme seems untenable in the long term if we do not have that. We cannot have a scheme where the funding is made available for one year and then left to drift for following years, which appears to be what is happening at the moment and is why the sector is so unhappy about the schemes now being funded at a loss. We need a response to that. I respect the views of the noble Lord, but I thought that he was being rather too pessimistic.

We believe that what we are suggesting is fair. It would not alter the implementation date of the Bill, but it would give us more reassurance that the scheme is workable and tenable in the longer term. We are not convinced by the Government’s response and would therefore like to test the opinion of the House.

Clause 1: Duty to secure 30 hours free childcare available for working parents

Amendment 2

Moved by

2: Clause 1, page 1, line 3, leave out “The Secretary of State” and insert “Every English local authority”

My Lords, Amendment 2 continues the debate we have just had over the funding review and what it means for the delivery of the additional entitlement. It seeks to end the ambiguity in the Bill as to whether responsibility for delivering the additional 15-hour entitlement will be the duty of the Secretary of State—as currently worded in the Bill—or of local authorities. We were unable to secure a firm answer at Committee; in fact, the Minister stated:

“The Government think that it is right for the primary legislation to put the duty to secure the extra 15 hours on the Secretary of State in the first instance, to demonstrate to parents the importance we attach to providing free childcare provision and to give them confidence that the Government will deliver on their manifesto commitment”.—[Official Report, 1/7/15; col. 2114.]

We tabled Amendment 2 to gain further clarity. However, the Government have since tabled Amendment 18, which confirms that the duty falls on local authorities. If this is the case, local councils must be given the appropriate level of support to fulfil their duty. The Government have said:

“We will … look at how we can support local authorities in drawing up agreements between themselves and childcare providers (perhaps by publishing a national model agreement). In addition, we are considering what can be done to smooth out issues around payment arrangements between local authorities and providers.

A full economic impact assessment and new burdens assessment will be carried out in due course”.

The Local Government Association has said that the duty will create further cost pressures on local government and will involve the risks associated with placing additional costs on an already underfunded system. Will the Minister provide an update on what is being done to ensure that local councils will not be out of pocket as a result of being responsible for delivering the entire 30-hour package of free childcare? Again, without seeing the detail of the funding review it is impossible to see how councils fit into the delivery model. I noted from the summary of evidence submitted to the funding review that only 3% of local authorities responded. The Government have committed to an uplift in the average rate that providers receive for the entitlement. The current proposal is for this to be delivered by councils through the dedicated schools grant. The Department for Education has confirmed that decisions about the size of this rate uplift and the consequent additional funding will be made at the forthcoming spending review, which the Minister referred to in the earlier debate.

On 15 June the Government announced that they are conducting a review of the cost of providing childcare. This follows warnings from providers across the spectrum that the current system is underfunded. I know that the Minister does not agree with that, but it is what the sector tells us. It is vital the Government ensure that the funding rate covers the cost of delivering 30 hours of free childcare to a standard likely to improve children’s outcomes and deliver broader policy objectives on employment progression and social mobility—a point well made in the earlier debate.

An initial look at the government amendments in the group might suggest a concession, as expressed in Amendment 12, but, having removed subsections (4) to (7) with Amendment 12, in Amendment 18 the Government seek to recover ground by giving the Secretary of State a power, as opposed to a duty, to make regulations on how local authorities should discharge their duties. The Government could have made Amendment 18 more palatable if they had used “must” rather than “may”. The “may” in line 2 gives the Secretary of State discretion as to whether to make regulations, although it is difficult to see how the scheme can operate without the use of regulation-making powers.

So it goes on. I am sure many noble Lords will have seen the eighth report of the Delegated Powers and Regulatory Reform Committee published yesterday, already referred to by my noble friend Lady Jones of Whitchurch. It says,

“we are surprised and disappointed that many of our recommendations have not been acted upon. It appears to us that the amendments add very little of substance to the face of the Bill: for the most part they adjust the existing delegated powers by removing some, varying others and adding more, while re-parading many in a new clause”.

It sounds a bit like moving the deckchairs on the “Titanic”. The report also says:

“Although the changes to some delegated powers may give the House a clearer idea of how the powers could be exercised, it remains unclear how they will be exercised”.

What an indictment of a very important Bill which is welcomed all around the House.

Amendments 14 and 16 remove from the Bill the ability of the Secretary of State to criminalise parents. In new subsection (2)(h) proposed in Amendment 18, the Government use their proposed new clause to replace the power in what was Clause 1(5)(k) to create criminal offences. I agree with the eighth report of the Delegated Powers and Regulatory Reform Committee that this is welcome and that the new power is focused only on unauthorised disclosure of official information. But the committee points out that the power is not insignificant,

“as it would enable the creation of an offence sufficiently serious to be punishable by imprisonment for up to two years”.

On Monday, the Times revealed that Facebook, a company worth billions, paid just £4,000 in taxes to the British Crown last year—around £1,000 less than the average British worker pays in taxes and national insurance. It is tax avoiders such as this that should be criminalised, not working parents, who might get a criminal record and face a jail sentence, perhaps for completing a form incorrectly when seeking free childcare.

We will come to the issue of affirmative versus negative procedures for the making of regulations later in the debate, but I believe that this is a matter that we will have to look at in much more detail. In fact, the Delegated Powers and Regulatory Reform Committee said yesterday in paragraph 10 of its report:

“We draw subsection (2)(h) to the attention of the House, so that it may consider whether the requirement for affirmative procedure only on first exercise of the power affords an adequate level of Parliamentary scrutiny for regulations which create, or alter the statutory ingredients of, criminal offences”.

I hope that the Minister will note those wise words.

Also in this group is Amendment 20A, which will be spoken to by the Liberal Democrats. We strongly support it because we believe that parents on low levels of income and those with multiple jobs need the kind of flexibility that it will engender. I do not wish in any way to take away from the comments that representatives of the Liberal Democrats will make, but I want to make clear that that amendment certainly has the strong support of this side of the House. With those few words, I beg to move.

My Lords, for greater clarity in the debate we withdrew our Amendment 15 and retabled it as an amendment to the new clause in government Amendment 18. Our amendment relates particularly to subsection (2)(b) of the new clause, which is about making,

“provision about how much childcare is to be so made available for each child, and about the times at which, and periods over which, that childcare is to be made available”.

Over the course of the debate on this Bill—on Second Reading, in Committee and again today—we have consistently argued for greater flexibility in the periods of time over which the 15 hours’ additional free childcare can be offered. We have done so for a number of reasons.

Many parents, particularly women, take on two or three jobs in a week to try to make ends meet. In my role as a local councillor I had the difficult task of trying to find new accommodation for a grandmother so that she could move from her council housing to a flat nearer her daughter as the daughter got up at five o’clock in the morning to take on a cleaning job at six and at that time no other childcare was available. I know at first hand what it means for many mothers who are trying to do, for instance, a cleaning job before the school day, something for school-lunch duties in the middle of the day and then another cleaning job at the end of the day. With this Bill we have an enormous opportunity to support those mothers and help them continue in work. That is why I have made what I hope is a strong case for defining more explicitly the flexibility that we are asking for in the Bill, rather than leaving it to vague definitions.

Not only is there the difficulty in the working week for the parents I have described; for all parents school holidays can be a nightmare. This is not just because the children are at home but because these parents are trying to juggle finding childcare for their children at home in the holidays while continuing in their work. Many parents find relatives, but not all are able to find them. The definitions of flexibility that we are proposing to include in the Bill would enable that to happen and would be of great advantage to many parents. Questions from those in the sector have indicated that one facet of the Bill they would particularly like to see is what they call a stretch of the hours over a longer period, not only during a week but also over the school holidays. That would be a tremendous help to many working families. I hope that we will not lose that opportunity.

I shall listen carefully to what the Minister says when he responds to the proposals that we have made. I feel strongly, as do my colleagues, that the Bill should contain a clear definition. It currently does not. If it is not included in the Bill today, we will have to think again about how we can move forward to ensure that it does.

My Lords, I very much support the spirit of Amendment 20A. This is one of the key points that the Bill seeks to address. However—continuing in my pessimistic mode, I fear—I think this is one of the hard choices that may have to be made. I can see how large providers might well be able to do this and how in large centres of population this kind of provision will be possible. But asking small providers to continue provision outside their normal hours may well stop them operating completely. This is a matter of hard choices and I would be much happier with the amendment if it said something like, “Regulations should take account of the need to” rather than “ensure” because I do not think that regulations can ensure this.

Very quickly, I would be unhappy to do what Amendment 2 suggests because I fear that if you take the Secretary of State out of the line of full responsibility, the danger is that the responsibility lands on the local authorities and, as we have seen in other areas—and I have a lot of interest in the provision of care for the elderly—the local authority would have the responsibility but not the funding.

My Lords, my name is also attached to Amendment 20A. I feel strongly about this issue because a few years ago I chaired a policy working group about how families could balance their working lives with their family commitments. In looking at childcare issues, the three As—availability, accessibility and affordability—were thought to be extremely important, and we are hearing a lot about them today. But something else was felt to be equally important by the people we talked to: flexibility.

I was very taken by some recent research produced by Citizens Advice about the experience of parents in the childcare market, which really highlighted how those children who need childcare at non-typical hours were found to be at a far greater disadvantage, and parents spoke of their “intense difficulty” in finding childcare that worked for them. They often did flexible working hours or shift work, were in low-paid employment and were dependent on public transport. Their experience suggested that it was close to impossible to find childcare before 7 am and after 7 pm on workdays, or at any times at weekends; for some, even finding care outside 9 am to 4 pm was difficult. Childminders were seen as just as inflexible as nurseries. That is why I think it is very important to say something about this in the Bill.

I would just like to respond to the very important point that the noble Lord, Lord Sutherland, has just made because I think it really would be a problem if this applied to every provider, as he said. Clearly, some small providers would not be in a position to do that but if you look at the wording of the amendment, it talks about having that flexibility,

“within the local authority area”,

not in relation to every single provider. That is an important point to stress.

My Lords, I will concentrate first on the delivery model for the 30 hours of free childcare. The Government are in full agreement with the spirit of Amendment 2 in the names of the noble Lord, Lord Touhig, and the noble Baroness, Lady Jones. We agree that local authorities are best placed to ensure that working parents are able to access 30 hours of childcare free of charge. They have a proven track record in delivering the existing entitlement to 15 hours of free early education, which has a take-up rate of 96% and is well understood by parents and childcare providers. We therefore do not fundamentally want to move away from that approach.

Government Amendment 18 proposes to insert a new clause into the Bill which will provide for the Secretary of State to be able to discharge her duty through local authorities. As the policy statement published on 2 October set out, delivering the extended entitlement through local authorities is the Government’s preferred approach and we intend to exercise the Secretary of State’s power to make regulations to that effect following Royal Assent. Indeed, the Delegated Powers Committee states in its report that it welcomes,

“the Government’s efforts to respond to earlier criticisms”,

and goes on specifically to say that it is now clear that functions in the Bill will be conferred on local authorities. I am pleased to confirm that, further to amendments I will move later this evening, the first set of regulations imposing requirements on local authorities—and all regulations made under the new clause—will be subject to debate before both Houses. At the appropriate time, we will, of course, provide statutory guidance for local authorities on what is expected of them. This guidance will be subject to a public consultation next year.

Of course, Amendment 2, in the name of the noble Baroness, Lady Jones, and the noble Lord, Lord Touhig, is cast slightly differently from the Government’s amendment and would remove the duty on the Secretary of State altogether. The Government do not wish to remove this duty from the Bill, even with very clear intentions that it will be discharged through English local authorities. That is for a very good reason: the manifesto commitment to provide three and four year-olds of working parents with 30 hours of free childcare is a significant one and a priority for this Government to deliver. We know that childcare is the issue for parents, and that it inhibits many from going back to work, or from working more, when they would otherwise choose to do so. For that reason, the Government believe that it is right for the Secretary of State to be named in the Bill because parents will, ultimately, hold her to account for delivery of the entitlement. I am grateful to the noble Lord, Lord Sutherland, for his remarks in this regard.

I can assure noble Lords that the Government are committed to working with local authorities as we develop the delivery programme; now, through the early implementer stage from September 2016, and beyond that into full rollout of the system from September 2017. In answer to the noble Lord, Lord Touhig, I can confirm that we will carry out a full new burdens assessment to ensure that any net additional costs to local government are fully funded. Our officials have met the Local Government Association to discuss this and I thank it for its positive engagement.

The positive intention behind the amendments we have brought forward today does not end there. They are also aimed at providing greater clarity about a range of other matters that were of interest to noble Lords during previous debates on the Bill and removing provisions which were causing noble Lords some concern. First, I am pleased to be able to confirm that government Amendment 12 removes some of the provisions which were of particular concern to noble Lords, for example the wide power to impose obligations on any public body or to reproduce any provision of the Childcare Payments Act. Amendment 18 would replace powers which have been criticised as being too wide in their scope with a more targeted set of powers. In particular, we have taken powers which will enable us to create gateways for government departments and local authorities to be able to share information they hold for the purposes of checking a child’s eligibility for the extended entitlement. Information-sharing gateways will, of course, need to be subject to appropriate safeguards and that is why we are clear that unauthorised, onward disclosure of information obtained through those gateways ought to be subject to a criminal offence, a matter which I will speak to shortly as I know it is of great concern to the House.

Of course, successful delivery of the extended entitlement is not merely about ensuring that children who qualify can be correctly identified. It also means putting in place robust mechanisms to ensure that parents and providers can have confidence in the eligibility-checking system. We recognise that there may be occasions on which parents are not satisfied with a decision made in connection with a child’s eligibility. In these cases, it is right that parents are able to challenge that decision and that is why the Government’s proposed new clause enables them to make regulations providing for a right of review in relation to a determination of eligibility with an onward right of appeal to the First-Tier Tribunal.

I turn to the amendments tabled by the noble Baroness, Lady Jones, and the noble Lord, Lord Touhig, relating to criminal offences. I hope noble Lords will be reassured that government Amendment 18 seeks to draw a clear line between conduct that will amount to a criminal offence and that which will attract a civil penalty. The new clause has significantly narrowed the power for the Secretary of State to create criminal offences and I am pleased to be able to reassure noble Lords that there will only be one new criminal offence in connection with the extended entitlement and that this will align with existing offences for schemes involving information sharing. This reflects the Government’s position that criminal offences should not be created lightly and should be used proportionately. It is also intended to make clear the Government’s intention to ensure that personal information, which will also often be sensitive, is not disclosed to those who have no right to see it.

In relation to the level of sanction for the offence, the term of two years that we propose aligns with that provided for in Section 13B of the Childcare Act 2006. Moreover, it is important to remember that this is not a fixed penalty but a statutory maximum and that ultimately the sanction in any particular case will be a matter for the courts. I reassure the noble Lord, Lord Touhig, that we have no intention of criminalising parents. The Bill creates a criminal offence only where sensitive information is disclosed without authorisation, which is designed to protect parents and their information. Although we have sought to narrow the scope of offences, the Government are clear that there should be the possibility of financial penalties on those who provide false or misleading information, make false or misleading statements or otherwise act dishonestly in applying for the extended entitlement. The maximum amount of any penalty will be £3,000. Again, it is only a maximum and there remains discretion to impose a much lesser penalty, depending on the circumstances. Any proposal to amend the maximum level of the penalty would need to be by affirmative resolution and so subject to debate by this House. I hope that noble Lords will agree that that is a more proportionate approach to tackling any dishonesty on the part of parents or providers seeking to benefit from the extended entitlement than the imposition of criminal sanctions.

I shall now speak briefly to Amendment 20A, tabled by the noble Baronesses, Lady Pinnock and Lady Tyler, which is aimed at ensuring that sufficient flexible childcare is available for working parents. As my noble friend Lady Evans acknowledged in Committee, it is important that the extended entitlement is made available at times which provide sufficient flexibility to parents working outside the hours of 9 to 5 and during holiday periods. I once again reassure noble Lords that we want to build on the flexibility that is already in the system to accommodate out-of-hours childcare and holiday periods. We will set out in in statutory guidance provisions about flexibility which local authorities should consider, as well as work that local authorities can do to enable parents to take the entitlement in a pattern of hours that best meets their needs. This will build on what we say in the statutory guidance for the existing entitlement, and we will ensure that the early implementation pilots focus on the issue of flexibility.

We also want local authorities to work with all forms of providers in their areas, including schools, to ensure that, as far as possible, there is sufficient childcare in their areas which responds to parental demand, including out of hours and during the holidays. Given that many early-years childcare providers open throughout the year, provision during holiday periods is less of an issue for parents of children who have not yet reached compulsory school age, but we acknowledge that more could be done to support parents with school-age children to access wraparound care. That is why we recently announced two new measures which will enable childcare providers to open school sites outside school hours and give parents the right to request childcare. Schools will receive clear guidance on the circumstances under which we will expect them to allow a provider to use their site, and we will also make clear how schools should consider and respond to proposals. These new powers will help with the availability of childcare and demonstrate that the Government are on the side of working families.

In conclusion, I believe that the Government’s proposed new clause in Amendment 18 achieves our shared aim of delivering the entitlement through local authorities. Similarly, Amendments 12, 17 and 18 further address noble Lords’ concerns in Committee about the scope of the powers set out in the Bill. The powers are now more clearly defined and, I hope, offer greater clarity as to how the Government intend to ensure that all eligible children receive the childcare to which they will be entitled.

I hope that noble Lords will feel able to support the Government’s amendments, recognising that we have listened to and taken on board their previous concerns. I also hope that they are reassured that the Government are absolutely committed to ensuring that parents have access to childcare in ways and at times which meet their needs. I therefore urge the noble Lord, Lord Touhig, and the noble Baronesses, Lady Jones, Lady Pinnock and Lady Tyler, not to press their amendments.

My Lords, I ask my noble friend whether—assuming that Amendment 18 is agreed to, and not Amendment 2—the Secretary of State will be liable if a local authority fails in some way in its duty under this Bill.

I assume that is the whole point of the duty. I imagine that the answer to that question is yes.

My Lords, I thank all noble Lords who have taken part in this very short debate. In response to Amendment 2, the Minister agreed that local authorities were best placed to deliver the additional childcare. It begs the question why the first four words in Clause 1(1) were ever in the Bill in the first place—but that is another matter. I received some reassurance on Amendments 14 and 16, although I am still not entirely convinced. However, we have done our very best to try to improve the Bill on these matters and it is time to cede responsibility for improving the Bill—certainly as far as Amendments 2,14 and 16 are concerned— to those who legislate in the other place. I beg leave to withdraw Amendment 2.

Amendment 2 withdrawn.

Amendment 3

Moved by

3: Clause 1, page 1, line 3, after “that” insert “high-quality”

My Lords, Amendments 3, 5 and the remaining amendments are in my name. I will be brief. I begin by thanking the Minister for the helpful conversation we had around family homelessness and childcare on Monday evening. As a result of that conversation, I will not move the next group of amendments in my name, and will save the time of the House by that means.

I bring back Amendment 3 on the key person in the nursery. I remind your Lordships that each child in the nursery is assigned a key person whose role is to help ensure that every child’s care is tailored to meet their individual needs and to offer continuity of care and a settled relationship for the child. That is the offer. I was really grateful to the noble Baroness for her reassuring and robust reply at Committee on this matter. I bring this back briefly on Report because that key person role is so important, because it is notoriously difficult to do well, and because it is particularly the most vulnerable children—the children from the most disadvantaged backgrounds—who need the secure attachment in the nursery. It is particularly difficult to give that child that support in the nursery. I speak to the concerns so admirably expressed by the Select Committee on Affordable Childcare when I say that it is the most disadvantaged families that need the best quality support.

I spoke to a mother this weekend. She was heavily pregnant, with three sons, and just about to celebrate two of her sons’ birthdays. I was speaking to a small group of mothers—I do not often have a chance to do that—and talked to them about the key person in the nursery. This mother said, “Ah, yes. I remember that. In the first nursery my son went to, there was the key person role, and it worked excellently. I spoke with the child carer about my child—a very good model. In my new nursery, we don’t have it. I’ll have to speak to them about it”. So there is an issue. It is not present at all nurseries. Why is this so important? Just think about the care system. Across services for children—particularly vulnerable children—we employ this model of the key worker. In youth custody, there is a key officer working with particular children; in children’s homes there is a key worker for particular children; and in our debate on the education Bill, with regard to looked-after children staying with their foster carers to the age of 21, the principle was that they had made this relationship with an important person in their lives and it is this continuity of relationship that is so important to them. It is just as important, or even more important, for three year-olds and four year-olds to have this stable relationship with a particular person. If they do not have it, they risk being either just forgotten about if they are difficult children in favour of children who are easy to deal with, or they receive multiple indiscriminate care and are passed from pillar to post. It all looks very nurturing but they are not getting the secure attachment they need to thrive.

I give the example of a man born in the mid-19th century. It seems that his parents were not very interested in him and were much more interested in pursuing their love lives with other people. His father once said to him, “You will never amount to anything”. Fortunately for this child he had a loving nanny, Mrs Everest, and so, fortunately for us, he grew up to be most successful, most robust emotionally and, despite suffering problems with the “black dog” from time to time, was able to withstand many setbacks and be of great service to this nation. We have a great deal to thank Mrs Everest for. For children from struggling families whose parents may not be getting on that well or who are experiencing difficulties, that relationship with a key person in the nursery is absolutely vital.

I wish to make two further points. First, it might be helpful to advise parents more widely about the importance of the key person role. For example, an organisation such as Mumsnet could conduct regular surveys among its users on the quality of childcare and could ask specifically about the role of the key person in the nursery and how well that is being carried out. Secondly, will the Government communicate with parents to advise them how they can identify quality and on the importance of the key person role in the nursery?

To sum up, the most vulnerable children from disadvantaged backgrounds most need this key relationship with one person, or possibly one person and a supporter, in the nursery in the provision of flexible childcare hours. We must not do anything in this legislation to water that down. I look forward to the Minister’s response.

My Lords, I rise to speak to Amendment 11, which is part of this important group of amendments relating to the quality of childcare.

In Committee, I tabled an amendment which proposed that in all dealings with children, the welfare of the child should be paramount, in accordance with the United Nations Convention on the Rights of the Child. The Minister mentioned “paramount” earlier today. I do not recall the term coming up in any previous government document or discussions, but I stand to be corrected.

The amendment I am discussing is based on ensuring quality childcare, which means having good staff-to-child ratios, staff who are trained in childcare at level 3 or above, or who are in training for that, and a member of staff qualified to care for children with SEN or a disability. Funding, of course, affects all this and I share my noble friends’ concerns about funding expressed earlier.

I know that some of my dear friends round the Chamber are concerned about the qualifications issue. I am not knocking their comment that you do not necessarily need to have high-level qualifications to undertake childcare. However, I am not talking about having a PhD in physics; I am talking about people aspiring to better their childcare qualifications, thereby improving their ability to deal with child development. That is all I am saying.

The third point of the terms of reference for the Department for Education’s review of the cost of providing childcare in England does indeed speak of sufficient quality of childcare. The fifth point refers to,

“the need to secure value for money for the taxpayer, and for the entitlement to be affordable to the public purse”.

In my view, the quality of care for children far outweighs value for money for the taxpayer. I understand accountability but I maintain that the first duty of childcare is quality for the child. Without that quality, all efforts to provide childcare are useless. Quality also impinges on parents going to work. Quality impinges on social mobility. No parent is going to place a child into poor-quality early years care or education. Indeed, surveys show that the top two requirements for parents are, first, location and, second, quality.

I note that many organisations share my concern. The National Association of Head Teachers states that the failure to address funding—the important issue raised earlier today—will compromise quality and that early years education, not just childcare, is essential in order to have an impact on child development. The Local Government Association talks of the danger of an underfunded system. The National Day Nurseries Association in its excellent analysis of this Bill is concerned about the threat of low pay and about recruitment and retention of staff. It suggests looking over the long term in a cross-departmental way at childcare funding and the development of a workforce strategy to improve quality. I agree.

The Special Educational Consortium has pointed out that 60% of parents with disabled children do not believe that childcare providers can cater for their child’s disability. It proposes that the Childcare Bill be amended to require the largest childcare centres to have an early years special educational needs co-ordinator. The Association for Professional Development in Early Years states that in relation to sufficient provision, quality of staff and the development of the health care and education plan is vital.

The importance of staffing could not be clearer. Skill and confidence in caring for and educating children with special needs are vital for the confidence of parents and the well-being of the child. In small settings, area special educational needs co-ordinators could be in place to advise parents and plan for health and education needs.

I hope that the Government will respond sympathetically to this group of amendments and ensure that quality of childcare is reflected in all their deliberations.

I speak to Amendment 23 standing in my name. In so doing I give my broad support to Amendment 11 in the name of the noble Baroness, Lady Massey, that covers similar ground. The policy statement on this Bill that we recently received stated that the workforce is the key driver of high-quality childcare. I agree—we probably all agree with that. I welcome the Government’s commitment to exploring career progression routes in 2016 and look forward to hearing more about these plans from the Minister. However, more needs to be done to support new entrants to the sector. This is the primary purpose of my amendment on minimum workforce qualifications.

The Affordable Childcare Committee felt that it was crucial to increase the proportion of staff qualified at a higher level in the private, voluntary and independent sector in order to drive up overall quality and improve outcomes for children. Setting a minimum qualification level for working with young children at level 3 was suggested by Professor Nutbrown during her review of early education and childcare. This would help to level the playing field and to ensure that where children grow up and live has much less of an impact on the quality of care and education that they receive than, sadly, is sometimes the case at the moment. It is telling that new evidence from Ofsted has identified that settings that have at least 75% of their practitioners qualified to level 3 achieve better inspection results. Indeed, the Nuffield Foundation recently reported on a strong relationship between the level of staff qualifications, the quality of provision, as judged by Ofsted and, most importantly of all, outcomes for young children.

The second part of my amendment is around disabled children. There is overwhelming evidence that parents of those children are struggling to access their current entitlement to childcare. Indeed, in 2014, the Department for Education found that only 40% of parent carers believe that the childcare providers in their area can cater for their child’s disability. Last year, the parliamentary inquiry into childcare for disabled children concluded that lack of staff skill and confidence was often the reason for parents,

“being subtly discouraged or simply turned away by a provider”.

The Government will be unable to fulfil their pledge to ensure equal access to the new 30 hours’ free entitlement unless some action is taken to address this. Of course—and this is an argument that we had earlier this afternoon—it is important to be realistic and proportionate about this and to take scale into account as well. That is why my amendment applies to larger childcare settings, which should be required to have an early years special educational needs co-ordinator, who could actively promote the inclusion of disabled children and those with special educational needs.

The best way in which to achieve the skill levels and the highly skilled workforce, which we would all like to see, is through a workforce that in most cases is qualified to level 3. We need to do that within a realistic timetable; I completely understand that—but the best way in which to do it is through a national workforce strategy, drawn up in conjunction with the sector, which sets out the actions that need to be taken to strengthen the quality and capacity of the workforce over the next five years, including things such as progression pathways, both for new and existing entrants. Can the Minister say what steps the Government are taking to develop a strategy for expanding and improving the quality of the early years workforce, and when such a strategy may be available?

My Lords, none of us would disagree with the importance of quality of staff; that is the fundamental thing that will make a childcare centre work, and work well. I have sympathy with all these amendments, because they point to particular features that may be part of ensuring, or giving reassurance, that quality is present—for example, qualifications. The evidence that we had in our committee was that qualifications are one of the most important identifiers of quality of staff. However, I have to put in the rubric that, of course, there is no guarantee. I have met many well-qualified people who do not exude quality in the required way. However, there is good evidence that qualifications are one indicator. For example, we have heard about the importance of a special individual in the setting. When I was at school, I suppose that would have been my form master. He did not teach me French, maths or physics, and sometimes he was a pain in the neck—but sometimes he was very useful and helpful. It is a relationship with an individual that is fundamental here. When it works well, it works exceptionally well, but it is not the only indicator. Equally, the staff training and development process is important.

Quality is a complex thing, with a whole series of factors, including the quality of the buildings in which the groups take place. A better way in which to tackle this issue would be to ensure that, off the Bill, instructions and guidance to Ofsted, which inspects these nurseries and care centres, are sufficiently clear to provide reassurance to parents that there is high-quality provision. Flexibility will be required and will vary from one place to another. Not all groups will be able to provide a specialist in SEN, but there need to be arrangements so that they have access to a specialist, even if it is in some other group. So I am pleading for flexibility here, rather than detail in the Bill.

My Lords, I support the noble Baroness’s wish for a national workforce strategy, for children with disability generally but particularly for those with learning disabilities or in specialist nurseries. That is because the availability of places for those children is simply not there, in my experience: that is why parents cannot access them. Where parents do wish to access them, local authorities often make it very difficult for them to do so, by producing very complex financial arrangements that exclude those nurseries from the capacity to give help to children. I have spoken about this to the noble Lord, Lord Nash. The Bill is complex, and this is another range of complexities that would benefit from a further look at a later stage, outside the Bill.

At the same time, as many of my colleagues know, I believe that we need a good mix. Of course we need qualifications. Having been involved sometimes at both ends of inspections, I know that qualifications belong to a tick box that is easier to look at, measure and add up than it is to look at skills, competency and relationships. Those are the things that actually matter. They are often enhanced by qualifications, but we need to look at provision that has a mix of all those qualities, particularly for children with difficulties. I do not believe, therefore, that qualifications are everything, but I do think that it is sometimes difficult to measure the other areas of expertise. Moreover, many voluntary organisations would like to add to the training of their staff, but as their colleagues will know, if you are going to train a member of staff you have to release them. Even if organisations are doing in-house training, they have to find time. That adds to the cost, so they have to make sure that cost is covered, which puts extra pressure on the budget.

Therefore, I cannot fully endorse the amendments in terms of qualifications, but we all need to move forward and look at the complexity of what we are trying to provide for children in these situations.

My Lords, I will speak to Amendments 3 and 23. I find this debate a little frustrating. My noble friend Baroness Pinnock is right when she says that it is not just about care, but about educational experience: for instance, the importance of play. It is not about the type of provision or the amount of time we spend talking about costs. If the Government are going to invest—and are investing—huge amounts of money, it is important that we get the quality right. The best way of guaranteeing that quality is by the people delivering it.

I am sorry to disagree with the noble Baroness, but qualifications are not—and should not be—tick boxes. Qualifications are about a body of understanding and practice that one has to go through. It is hugely important that people working with young children know about child development. Notions that one is working with children but has no understanding of how children develop are anathema to me. Yes, it is hugely important that the assistant understands the importance of play and that the setting has an understanding of some of the special needs issues. It is not about ticking boxes but making sure that people have the qualifications.

The people who used to work in nurseries were of course called nursery nurses. They were highly regarded and highly trained, and resented it when, suddenly, nursery nurses were done away with and became level 3s —or perhaps level 4s. Level 3 is not a particularly onerous qualification to get; one can do it in 12 months or over two years. I hope that we stick our mast firmly to the top of our nurseries and say, yes, we want the people working there to have the right qualifications.

Of course, there are some wonderful people working in playgroups and helping out in nurseries who do not have these qualifications, but for goodness’ sake—we asked for a commission to look at this issue, and the Nutbrown commission spent a lot of time working on this. It said, “Yes, they should be at level 3”. Should we just ignore that and tear it up? No, we should not. We should make sure that quality is at the heart of the provision. Finally, we should also make sure that the leadership of those nurseries is of the highest calibre.

My Lords, I thank the Minister for the very helpful meeting he held yesterday, when we had the opportunity to explore a number of issues that have exercised us throughout the passage of the Bill, in particular, the outline of the funding review.

Amendment 11 in this group was much in my thoughts after our meeting and the presentation. I fear that the funding review’s progress and the conclusions it will reach may well be a threat to the existing staff- child ratios, which would be a retrograde step were it to happen. Of course, because the Government, sadly, seem determined to put the cart before the horse—passing legislation through your Lordships’ House and telling us afterwards how it will be funded—I feel I have every reason to be concerned.

Amendment 11 goes to the very heart of the standard of education and childcare that parents can expect, especially those with special educational needs children. While I am the first to recognise that there are many good educators in the childcare education sector who themselves have no formal level 3 qualification—a point well made yesterday by the noble Baroness, Lady Howarth of Breckland—that does not mean we should not seek to do something about that and ensure that everybody has the appropriate qualification. The simple fact is that no one leaving education today will have a job for life. Everyone will have to retrain and upskill in their working lives. If we do not recognise that by ensuring that the first learning and educational experience a child receives in its life is delivered by someone who themselves has been well trained, we start at a disadvantage.

We must be bold in our ambition for our children, and Amendment 11 is surely the foundation of that ambition. That is why we on this side strongly support it.

My Lords, I will speak to Amendments 3, 5, 11 and 23 regarding the quality of childcare to be delivered under the Bill, staff to child ratios, the workforce, and provision for children with special educational needs. I thank the noble Baronesses, Lady Massey, Lady Tyler and Lady Pinnock, and the noble Earl, Lord Listowel, for highlighting the importance of high-quality childcare and, in particular, the skills and qualifications of the early years workforce, including for children with special educational needs and disabilities.

I reassure noble Lords that we all want childcare that meets the needs of working parents and their children, including those with special educational needs. I have listened carefully to the debate this evening and I completely agree with the points that have been made about the importance of the quality of childcare and its impact on child development. I reassure the House, and particularly all those who have contributed to this debate, that the quality of early education and childcare and the welfare of children remains paramount.

All childcare must be delivered in a safe, secure and welcoming way that contributes to a child’s welfare and their development. The Government believe that the extended entitlement needs to supplement and complement the current early education entitlement. It will need to provide positive and stimulating experiences for children, and staff will need to have the right skills and knowledge to deliver this care. There are a number of aspects to these amendments, each of which I will address in turn.

First, the amendment tabled by the noble Baroness, Lady Massey, seeks to extend the existing ratios for the current 15-hours early education entitlement to the 30-hours childcare entitlement and to set these out in primary legislation. All early years providers registered on the early years register must meet the early years foundation stage framework requirements for welfare and well-being, including ratio and qualification requirements.

The English childcare system has some of the tightest adult-child ratios in the world. For three and four year-olds in group provision there must be one adult for every eight children. Or, where a person with a suitable level 6 qualification is working with the children, a 1:13 ratio can be used. The existing ratios have been set out in the EYFS since 2008 and we are committed to keeping them. I would like to place on record that there are no plans to change the ratios to deliver the new entitlement. I am very clear about this. The Government consider the current approach of using secondary legislation to be the right one for ratios, as was discussed in Committee. Ratios for all providers are already set out in secondary legislation, and this allows for a quick response if changes are needed to keep children safe and well cared for. I hope I have reassured noble Lords on this point and urge the noble Baroness to withdraw her amendment.

I turn next to those parts of the noble Baroness’s amendments that seek a minimum level 3 qualification for all staff. We know that highly qualified staff lead to better outcomes for children. I am sure that noble Lords will welcome the Government’s commitment to wanting the sector to continue to attract highly qualified staff with a strong aptitude for working with young children and the right mix of knowledge and skills to deliver good-quality childcare.

The qualification level of the early years workforce has risen in recent years. Continuing this increase is a key aim of the Government’s workforce strategy, through the introduction of early years educator qualifications—these are equivalent to A-level standard—and early years initial teacher training. Research tells us that, in group daycare settings, 87% of the workforce has a relevant qualification at level 3. Indeed, many of the workforce are qualified beyond level 3. Since 2007, more than 16,000 individuals have achieved early years professional status and early years teacher status.

Over the summer, the Government, in partnership with the early years sector, made some key strategic changes to widen access to level 3 courses, allowing more individuals to begin their training. This included removing the requirement for new entrants to level 3 apprenticeships and level 3 stand-alone courses to hold GCSEs in English and maths at grade C or above on entry to their course. Now, those who do not already hold their GCSEs will be supported to gain them alongside their early years qualifications before entering the workforce at level 3. I hope that noble Lords will welcome this change.

The Government have made these changes in response to calls from the early years sector to simplify the route to early years qualifications. As a result of this collaborative approach, the changes have been warmly welcomed in the early years sector. I would like to quote Sue Robb, head of early years at 4Children, who said:

“We welcome the government’s decision that apprentices can work for their childcare qualifications at the same time as studying for their GCSEs in maths and English. This will encourage more apprentices into childcare and early years”.

It is through this collaborative approach that the work- force strategy will continue in 2016, when the Government will review progression routes within the sector to determine what more can be done to enable good-quality staff to maximise their potential and forge a successful career in early years.

We also know that it is not just the certificate that a member of staff holds that leads to benefits for young children but the proven ability of individuals to interact with children and care for them. This is what Ofsted focuses on when inspecting and making its judgments. Many members of the workforce qualified below level 3 provide the high-quality care that is needed. I believe it is important to recognise the excellent work that these people do; 44% of childminders, for example, come into this category, representing a significant part of the childcare workforce.

For these reasons, I believe that it is unnecessary, and would indeed be unnecessarily disruptive, to require all staff, including many in the private, voluntary and independent sectors, to have a level 3 qualification. I therefore urge that the amendment be withdrawn. I am in no doubt that the early years workforce will continue to be central to ensuring benefits for children across all types of settings.

I will next respond to the amendments relating to staff skills and qualifications in order to deliver the appropriate care to disabled children and those with special educational needs. It is the Government’s intention to ensure that the safety and care of all children is met, and we recognise that staff need to have the right skills and knowledge to deliver this care.

I would like to take this opportunity to restate something that I said in Committee: the law is very clear that this entitlement and the existing entitlement must be available for every eligible child who wishes to access it. A child with SEN or a disability not being able to find quality childcare in their area is not acceptable. It is not right and nor is it the responsibility of the parent of a child with SEN or a disability to have to scour the local area to find a place. Local government and providers who wish to deliver the entitlements need to work together to improve this situation. The early years foundation stage already requires providers to ensure that the necessary arrangements are in place to support children with SEN or disabilities. It also requires providers delivering funded places to have regard to the SEN code of practice.

Individuals gaining early years teacher status through early years initial teacher training routes must meet the teacher standards on early years to qualify and work as early years teachers. It is a requirement for them to adapt the education and care they provide to respond to the needs of all children. This means that they must demonstrate a clear understanding of those with special educational needs and disabilities, and be able to use and evaluate distinctive approaches to engage and support them.

I hope that noble Lords are reassured that the Government continue to support the development of the early years sector within a broader, self-improving education system. The Government have invested £5.3 million in voluntary and community sector organisations this year, many of which focus on upskilling the workforce by offering training and development. A number of these programmes are delivering specific SEN and disabilities training to the early years workforce. In particular, the National Day Nurseries Association’s current SEND champions grant has proven very popular among the workforce and has been oversubscribed three times.

Local authorities also have a role to play. SEN and disability reforms within the Children and Families Act set out how local authorities, early years settings and schools must meet the needs of children with SEN and disabilities. Local authorities are expected to ensure that there is sufficient expertise and experience among local early years providers to support children with SEN. In many local authorities, they are doing this by having an area SENCO. A recent local authority implementation survey, which received responses from 104 local authorities, indicated that 78% already have an area SENCO for early years providers to access. We are confident that this number will continue to grow as the reforms become embedded.

It is clear that the early years workforce has an important part to play to ensure that children with SEN and disabilities are suitably cared for. However, the market is diverse—the majority is made up of private and voluntary institutions—and it would be very challenging to require every provider to have a suitably qualified member of staff or a SENCO. This would be a particularly challenging requirement to place on childminders, who make up 52% of the sector. As I have previously explained, every provider delivering the early years foundation stage, regardless of their size, must ensure that arrangements are in place to support children with SEN and disabilities.

I recognise that the amendment allows the Government to set a prescribed size, but I would be concerned about the potential perverse incentives with this; for example, a provider not taking more than 49 children if at 50 children the regulations would be more burdensome. Therefore, it would be more appropriate to look at ways in which we can learn from local authorities with area SENCOs and encourage other areas to follow them, building on the model of local authorities that we heard from in our recent survey.

From September 2016, we will roll out the 30 hours’ extended entitlement in certain areas to test market innovation and flexibility of provision, including the access available to those children with SEN and disabilities. One of the criteria we will set for local authorities which want to become early implementers is that they must clearly demonstrate how they will meet the needs of children with special educational needs and disabilities. While SENCOs are already a valued part of the landscape, we want to develop and test other innovative ways of meeting the needs of children with SEN and disabilities. We do not want to prejudge the learning that we will gain from the early implementers and I hope that noble Lords will understand why we do not want to close down other potential options by settling on a single solution now.

Finally, but by no means least, I turn to Amendments 3 and 5, which seek to ensure that the childcare provided under this Bill is “high-quality”, including making it a requirement for every child to be assigned a “key person”. I assure all noble Lords, as did my noble friend Lady Evans in Committee, that children are at the centre of our thinking. The Government are committed to ensuring that the entitlement delivers quality childcare that supports early development and is flexible and affordable for parents.

I hope that noble Lords have recognised the Government’s commitment to quality childcare in my response to the other amendments in this group. We have committed to keeping the current ratios. An effective strategy is in place to develop further the early years workforce, which has been welcomed by the sector. We are committed to getting high-quality provision in place for children with SEN and disabilities, and testing the best way to secure that.

The required quality of provision for funded childcare places is set out in regulations, and providers are held to account for the quality of the service they provide through a strong accountability framework. The noble Lord, Lord Sutherland, mentioned Ofsted. The current Ofsted framework gives a strong focus on the quality of adult interactions with children, with outcomes for children improving as a result. The combination of regulation and accountability has produced a childcare offer in which 85% of providers are now judged “good” or “outstanding” by Ofsted, compared to less than 70% five years ago.

In addition, it is vital that parents understand what to look for in high-quality provision. I am grateful to the noble Lords who emphasised this when we met yesterday and I would be very happy to write to the noble Earl, Lord Listowel, to set it out in more detail. Ofsted is already taking steps to make its inspection reports simpler and clearer for parents, and I am pleased to say that, in addition, the Minister for Childcare and Education will take forward work to develop easy-to-use guides and questions for parents to use when choosing a childcare provider. This will build on the recently published and hugely popular What to Expect, When? guide for parents, which shows parents what their children should be able to do as they progress and develop through their early years, providing tips for parents on how they can help their children reach those milestones. The new, easy-to-use guides will refer to key workers.

While there is of course always more to be done, the approach that we are taking is working. As the early years foundation stage profile data published yesterday reveal, an increasing proportion of children are achieving a good level of development at age 5: 66% in 2015 compared with 52% in 2013.

There have also been improvements in provision for disadvantaged children, for whom high-quality childcare can help to mitigate the risk of falling behind early and staying behind. As the quality of providers in disadvantaged areas has improved—78% are now judged “good” or “outstanding”, compared with 59% five years ago—so, too, have outcomes for lower-attaining children. The newly published data reveal that the gap between the lowest-attaining 20% achieving a good level of development and the rest continues to close, from 37% in 2013 to 32% in 2015.

We know that the quality of childcare makes a difference to outcomes, particularly for the most disadvantaged, and as such government will make sure that the regulations and the accountability framework that underpin the system continue to drive quality delivery. Section 7 of the Childcare Act 2006 places a duty on local authorities to secure prescribed early years provision free of charge. The details of how this provision is delivered, including various aspects of its quality and safety, are set out in regulations. We intend to use the same approach for the extended entitlement and will consult next year on those regulations.

I turn to Amendment 5, on key workers. All registered early years providers must meet a comprehensive set of safeguarding and welfare requirements. The requirements already cover child protection, ensuring that those who care for our youngest children are suitable to do so, promoting children’s good health, ensuring that premises are safe, and preventing accidents and injuries as far as possible. To strengthen these requirements even further, the Government are already introducing new measures outside the Bill significantly to increase the number of staff with paediatric first aid training. Providers are already required to assign every child a “key person”. Key persons have an important role to play, helping to ensure that every child’s learning and care is tailored to meet their individual needs. The key person is a familiar figure who is accessible and available as a point of contact for parents, too.

The key person system is already well established, as required under the EYFS. The safeguarding and welfare requirements for registered early years providers are comprehensive, as is absolutely right. Parents want to be reassured that when they leave their child, or, indeed, grandchild, all aspects of their safety and welfare will be addressed.

I do not believe that we should single out any individual requirements in order to given them prominence in primary legislation. It seems odd to stipulate that regulations setting out what is meant by “high-quality” childcare must require that each child is allocated a key worker, but not mention the other requirements around safeguarding and welfare. In saying this, I am not downplaying the valuable role that the key person plays but I do not see a case for singling out their role in primary legislation. I think we are in agreement that secondary legislation is the right place for us to set out the comprehensive suite of requirements, but I did enjoy the noble Earl’s comments about Mrs Everest, aka “Woomany”.

In conclusion, I would like to reiterate the point that high-quality childcare, delivered by staff with the right skills and qualifications, which meets the needs of children, including those with special educational needs and disabilities, is a vital principle for this Government. I hope the noble Baronesses and the noble Earl have been reassured by my responses and I urge them not to press their amendments.

My Lords, I am most grateful to the Minister for his careful response and to noble Lords who have tabled amendments and taken part in this important debate on quality. I should first point out that I made a couple of omissions in my opening statement because of my wish for brevity. The man I spoke of was, of course, Winston Churchill. Also, the Minister kindly made some comments to me earlier but I was not in my place. I assure him that I was stretching my legs behind the Bar and heard every word he said, but it was not a good time to choose to do so. I apologise for that.

I am grateful to the Minister for taking the time to answer in detail on these important matters. It is good to be reminded that he is developing a strategy for the early years workforce. It is most important to all of us, I am sure. I listened with interest to the debate about the importance of Ofsted versus the importance of high-quality qualifications for staff. I am very familiar with this issue from discussions about children’s homes, and there seems to be a parallel. Within the culture of residential care for looked-after children in this country, there is a strong conservative bias towards a low-qualified workforce and a high level of regulation. Many people working in this field and many authoritative figures would say, “We do not need higher qualified staff; we need good regulation and we will work with what we’ve got”. I have followed this issue for many years and have always taken the opposite view. We need highly qualified staff when working with such vulnerable children—even more so than the staff on the continent, who are definitely more highly qualified. I am very sympathetic to the argument of the noble Lord, Lord Storey. We should start with high-quality teachers and professionals, and then regulate to make sure everything is done properly. That is the motor to real improvement.

There is a concern about private group provision and the percentage of early years teachers in those settings. We should not be too prescriptive but we know how important having professionals in early years settings is, particularly for the most disadvantaged children. It is a matter of concern that nearly 50% of independent group providers do not have early years teachers in those settings. I am sure that this will be debated further in the other place. I welcome the Minister’s many comments about the improvement in the qualifications of the workforce during the last Government. I beg leave to withdraw the amendment.

Amendment 3 withdrawn.

Amendments 4 to 6 not moved.

Amendment 7

Moved by

7: Clause 1, page 1, line 6, leave out from second “child” to end of line 10 and insert “—

(a) who is under compulsory school age,(b) who is in England,(c) who is of a description specified in regulations made by the Secretary of State,(d) in respect of whom any conditions relating to a parent of the child, or a partner of a parent of the child, which are specified in such regulations, are met, and(e) in respect of whom a declaration has been made, in accordance with such regulations, to the effect that the requirements of paragraphs (a) to (d) are satisfied.”

My Lords, I shall also speak to Amendments 8, 9, and 10, which concern eligibility for the extended entitlement.

The additional childcare provided for in the Bill builds on the existing entitlement to 15 hours of early education for three to four year-olds and disadvantaged two year-olds. The Government’s intention with this extended entitlement is to support working parents with the cost of childcare and to enable them, should they wish to do so, to return to work or to work more.

I will first address Amendment 10, tabled by the noble Baronesses, Lady Pinnock and Lady Tyler. While I understand that the noble Baronesses would like working parents of children aged between one and two to benefit from additional childcare, I can assure them that there is already a significant amount of support for parents of children in this age group. In the last Parliament we introduced the entitlement to 15 hours free childcare for disadvantaged two year-olds. We have legislated for tax-free childcare, which will save around 1.8 million working families with children under the age of 12 up to £2,000 per child per year. We have committed to increasing childcare support within universal credit by around £350 million, to provide 85% of childcare costs from next year, rather than the current 70%, where a lone parent or both parents in a couple are in work. The Government’s clear commitment is to increase the hours of free childcare available to working parents of three and four year-old children, when many parents feel more able to return to work.

Turning to those children that the Government intend to benefit from the new entitlement, our intention is that the criteria for accessing the entitlement will include conditions relating to paid work undertaken by the child’s parent or the parent’s partner. The criteria will be set out in regulations, rather than in the Bill, but our intentions are clearly signalled by Amendments 7 and 8. As set out in Committee, the amount of work parents will need to undertake will be set relatively low. Children of parents who earn at least the equivalent of eight hours per week at the national minimum wage, including those who are self-employed, will qualify for the extended entitlement. In the case of lone-parent households, the same threshold will apply. That makes this a significant offer of additional support.

We have considered carefully the debate in Committee about parents who may not be in a position to meet the minimum income threshold, for reasons which may be connected with incapacity for work, caring responsibilities or because they are temporarily away from the workplace. That is why the Government’s policy statement, published at the beginning of this month, set out further information on the circumstances in which we think that children of such parents should nevertheless qualify. The amendment we have brought forward would enable the Government to specify the circumstances in which a person should be regarded as in paid work for the purposes of the new entitlement. This would enable the Government to include, within regulations, those parents who are out of work or temporarily away from the workplace.

In summary, the Government intend that the additional entitlement should be available in the following circumstances: where both parents are employed but one or both parents is temporarily away from the workplace on parental, maternity or paternity leave; where both parents are employed but one or both parents is temporarily away from the workplace on adoption leave; where both parents are employed but one or both parents is temporarily away from the workplace on statutory sick pay; where one parent is employed and one parent has substantial caring responsibilities, based on specific benefits received for caring; or, finally, where one parent is employed and one parent is disabled or incapacitated, based on receipt of specific benefits. The Government believe that including parents who meet these criteria within the entitlement provides an appropriate balance in supporting parents to work where they can do so but also avoiding undue disruption to providers and children due to short periods of parental absence outside the workplace. I hope noble Lords will welcome the Government’s intention to include these circumstances in the eligibility criteria for the extended entitlement, which includes a number of groups specified in Amendment 9 tabled by the noble Baroness, Lady Jones, and the noble Lord, Lord Touhig.

Turning to parents on zero-hours contracts, as mentioned in the Opposition’s Amendment 9, we recognise that the system needs to reflect the variety of working patterns of families across England. I should therefore like to reassure all noble Lords that the contractual position of parents will not determine whether they are eligible for the additional childcare. Parents on zero-hours contracts will be eligible in the same way as anyone else if, on average, they earn at least eight times the minimum wage per week as determined by information held by HMRC on parental earnings.

For parents who are not in work but are undertaking work-related training, in addition to the existing entitlement for three and four year-olds the Government already provide support to help with the costs of childcare to parents in recognised education courses. This includes schemes such as the childcare grant which offers parents support of up to 85% of their childcare costs depending on their household income. We believe that that is already a significant contribution to childcare costs while a parent is studying. Children whose parents are students but who are also in work will qualify for the extended entitlement in the same way as any other parent, as long as they meet the eligibility criteria. I would also like to mention very specifically here that parents on an apprenticeship, who by definition will be working full time, will be able to benefit from the extended entitlement.

As I have already explained, it is our intention that where one parent receives benefits for undertaking caring responsibilities, in the case of couple families they will be regarded as if they were in paid work as long as the other parent is working. This will mean that in such families they will be able to receive the additional entitlement supporting the other parent to remain in work or extend their hours of work. The entitlement is intended to help parents work. In the case of single-parent carers, should they work in addition to their caring responsibilities, they will be entitled to the additional childcare, like other parents.

I should also like to reassure the noble Baroness, Lady Jones, and noble Lord, Lord Touhig, that it is not our intention that children of parents who lose their job unexpectedly should be disadvantaged. If a parent’s circumstances change their child will remain eligible for the extended free entitlement for a short period. We hope that within this time the parent will be able to regain employment and continue to declare that they expect to meet the criteria that I have just set out. If that is not the case, and after the grace period the parent is clear that they no longer expect to be in paid employment, they would become ineligible. We expect to provide further detail on how this will work in regulations and statutory guidance but a common-sense approach would be for children to keep their place for the remainder of that term.

The Government recognise the importance of volunteering and the role that volunteers play in improving their local community. However, the purpose of the extended entitlement is to help parents go out to work if they want to. As I have explained, entitlement is based on working the equivalent of eight hours, which means that parents who work part time and wish to combine this with some voluntary work will, of course, be able to do so.

Today, and in our policy statement, we have aimed to set out who the Government intend to benefit from the extended entitlement, but I am aware that noble Lords may question why we do not intend to set this level of detail out in primary legislation. As explained, eligibility will broadly align with that for tax-free childcare. The Childcare Payments Act 2014, which established tax-free childcare, sets out general conditions of eligibility, including the need to be in qualifying paid work. However, it is secondary legislation which sets out what is meant by qualifying paid work and when a person is to be regarded as being in such work. Those regulations are obviously highly technical, cross-referring to benefits, allowances and credits established under a number of pieces of primary legislation. Similarly, the approach that the Government have taken in this Bill is to signal in primary legislation that parents will be expected to meet conditions as to paid work in order for their children to qualify.

By taking a power to specify in regulations the circumstances in which a person is to be regarded as in such work, we have also signalled a clear intent to cater for circumstances in which a parent does not meet the paid-work condition, for example because they are temporarily away from the workplace due to sickness or parenting responsibilities, but their child ought nevertheless to qualify. However, we think it is appropriate that the technical detail as to which allowances will mean that a parent can continue to be regarded as being in paid work ought to be left to secondary legislation, and we feel that this strikes the right balance. This will also mirror the approach taken to the entitlement to 15 hours of free childcare for certain eligible two year-olds, where the detail as to which children are eligible is set out in regulations. The secondary legislation for the new entitlement will be laid and approved by each House using the affirmative procedure on their first use, therefore providing the opportunity for debate in both Houses.

I hope noble Lords will recognise that the Government have given careful consideration to the question of eligibility and, through their own amendments, have addressed the key issues raised in Committee and provided a clear explanation for why some groups mentioned by the noble Baroness and the noble Lord may not be eligible. I therefore urge the noble Lords not to press their amendments and I commend Amendments 7 and 8.

My Lords, I rise to speak to Amendment 9. Our amendment builds on the Minister’s own previous admission that a more detailed criterion was needed and his pledge to consider the issues again, taking into account what he described as our helpful contributions at Committee stage.

In this spirit, we are again trying to be helpful. Although the Government have made some concessions, we do not believe they have gone far enough, or are clear enough about which parents would qualify for the free hours. Again, we share the concerns of the most recent report of the Delegated Powers and Regulatory Reform Committee, which criticises the Government for relying on the detail of the eligibility criteria being spelled out in regulation rather than on the face of the Bill. It went as far as to say it was “mystified” by this omission.

This is particularly important given that the Government seem to be rushing this Bill through because they want to send an early message to parents that the new entitlement is on its way. However, unless parents are clear on whether or not they will qualify, I rather think that that message will be lost on them. Of course, the current 15 hours of free entitlement applies to all parents, but the additional hours envisaged in this Bill will apply only to parents working a minimum of eight hours a week. I have to say that I do not think that that will go down well among parents with different circumstances sharing the facilities in nurseries. For example, nursery providers and parents will find themselves grappling with definitions and calculations. Some weeks parents will qualify, and other weeks they will not.

As the noble Lord, Lord True, pointed out in Committee:

“At the moment we have a beautifully simple system”.—[Official Report, 1/7/15; col. GC 2099.]

It is easy to administer, and there is a strong case for maintaining the additional free hours as a universal benefit.

However, if we accept the Government’s focus on just helping working parents with the cost of childcare, helping them return to work or to work more hours, then it is important that those new eligibility rules deliver that objective. That is what our amendment seeks to do. The first part of our amendment reflects the Government’s plan that there should be a minimum eight hours worked each week. The second part of our amendment identifies the exceptions to this rule for parents who are in the job market, training for work or unable to work through no fault of their own.

I submit that the categories we have identified are the very people whom the Government are most likely to help back into work by providing additional free childcare. These are the hard-working parents on the bottom rung of the jobs ladder, who will genuinely struggle with childcare costs. If the Government want to encourage work and extend working hours, these are the very people we need to help. Putting an artificial bar of a minimum of eight hours a week does not really address those concerns.

When the Minister addressed these issues in Committee he argued that there were some discretionary payments that might help parents who study or who were carers. The Minister has repeated those assurances today. However, that is very different from an automatic entitlement to free childcare and, as I have said, there is a strong case for keeping it simple. The Minister also made it clear that parents on flexible contracts, zero-hours contracts or who lose their job unexpectedly should not be disadvantaged. We welcome this commitment and our amendment seeks to enshrine it on the face of the Bill. Our amendment would provide a simple entitlement to categories of parents for whom the Minister has already expressed some sympathy. On that basis, I hope that the Government will feel able to support our amendment.

Throughout the debate, we have grappled with eligibility criteria. I recognise the fact that the Minister has listened and defined much more clearly the working parents who will qualify under the scheme. However, as the noble Baroness, Lady Jones, has just described, it will be a very complex scheme, as set out in the Bill.

I want to speak to Amendment 10, which we tabled, by first of all thanking the noble Baroness, Lady Evans, for reminding everybody that it was a Liberal Democrat initiative to ensure that 40% of two year-olds from the most deprived and disadvantaged families were for the first time given 20 hours of free childcare a week.

What concerns us here is the huge gap in childcare provision for the majority of parents and their children between the end of paternity or maternity leave and access to free childcare at age three. We want to keep reminding the House and the Government that this gap must be bridged. Despite what the Minister said, it will cost most parents who are in work around £400 a week, which is a significant sum of money, for their one and two year-olds to access full-time childcare. This is somewhat addressed by the tax-free childcare allowance of £1,000-plus a year, but that comes nowhere near addressing the substance of the bills that parents face.

The other issue that I want addressed and have consistently raised is that people who are out of work for more than a year find it increasingly difficult to get back into work. If we can reduce those barriers by providing free childcare, we will be helping them, their families and the state in the long term. That is why I continually raise this point whenever we debate childcare. For those reasons, I want to stress this amendment today. I know that it will not be supported across the House, but I want to keep reminding people about this issue. I shall keep coming back to it, because it is very important for many parents—and for social mobility, which the noble Earl, Lord Listowel, for instance, is concerned about. I hope that in the longer term the Minister will be able to address this gap in childcare provision.

My Lords, I thank the noble Baronesses, Lady Jones and Lady Pinnock, for their very helpful and clear contributions. As I explained earlier, the Government have attempted to set out clearly which children will be eligible for the new entitlement. We are making provision to ensure that parents who are temporarily away from the workplace as a result of other vital duties, such as caring for a new baby or adopted child, will be able to continue to receive their free place, reducing any disruption that short-term absences could cause to providers, and most importantly to the children.

The Government’s commitment is clear. I am afraid that this provision is for working parents of three or four year-olds and that is the entitlement that we intend to keep. The noble Baroness, Lady Jones, asks why we will not define eligibility in primary legislation. As I explained, the details are technical and the nomenclature of the various underlying benefits and allowances may change. By putting this level of detail in regulations, we will be better able to amend eligibility to ensure that we continue to provide places to those whom we want to benefit. We provided substantial details of our intentions in our recent policy statement, which I have put on record in the House today. The House will have the opportunity to debate the detail of the regulations, which will be affirmative.

Amendment 7 agreed.

Amendment 8

Moved by

8: Clause 1, page 1, line 10, at end insert—

“(2A) The conditions mentioned in subsection (2)(d) may, in particular, relate to the paid work undertaken by a parent or partner.

(2B) For the purposes of subsections (2) and (2A), the Secretary of State may by regulations—

(a) make provision about when a person is, or is not, to be regarded as another person’s partner;(b) make provision as to what is, or is not, paid work;(c) specify circumstances in which a person is, or is not, to be regarded as in such work;(d) make provision about the form of any declaration, the manner in which it is to be given and the period for which it has effect.”

Amendment 8 agreed.

Amendments 9 to 11 not moved.

Moved by

12: Clause 1, page 1, line 19, leave out subsections (4) to (7)

Amendment 12 agreed.

Amendments 13 and 14 not moved.

Amendment 15 had been withdrawn from the Marshalled List.

Amendment 16 not moved.

Amendment 17

Moved by

17: Clause 1, page 2, line 36, leave out subsections (10) and (11)

Amendment 17 agreed.

Amendment 18

Moved by

18: After Clause 1, insert the following new Clause—

“Discharging the section 1(1) duty

(1) The Secretary of State may make regulations for the purpose of discharging the duty imposed by section 1(1) (“extended entitlement regulations”).

(2) Extended entitlement regulations may (amongst other things)—

(a) require an English local authority to secure that childcare of such a description as may be specified is made available free of charge for children in their area who are qualifying children of working parents;(b) make provision about how much childcare is to be so made available for each child, and about the times at which, and periods over which, that childcare is to be made available;(c) make provision about the terms of any arrangements made between English local authorities and providers or arrangers of childcare for the purposes of meeting any requirement imposed under paragraph (a) or (b);(d) impose obligations or confer powers on the Commissioners for Her Majesty’s Revenue and Customs;(e) make provision requiring information or documents to be provided by a person to the Secretary of State, the Commissioners for Her Majesty’s Revenue and Customs or an English local authority;(f) make provision for the purpose of enabling any person to check whether a child is a qualifying child of working parents;(g) for that purpose, make provision about the disclosure of information held by a Minister of the Crown, the Commissioners for Her Majesty’s Revenue and Customs or an English local authority;(h) create criminal offences in connection with the onward disclosure of information obtained under paragraph (g) where that information relates to a particular person and is not disclosed in a way authorised by or specified in the regulations;(i) make provision for reviews of, or appeals to the First-tier Tribunal against, determinations relating to a child’s eligibility for childcare under section 1;(j) make provision for a person specified in the regulations to impose financial penalties on persons in connection with—(i) false or misleading information provided, or statements made or provided, in connection with a determination of a child’s eligibility for childcare under section 1, or(ii) dishonest conduct in connection with the process of making such a determination;(k) require English local authorities, when discharging their duties under the regulations, to have regard to any guidance given from time to time by the Secretary of State. (3) Extended entitlement regulations which impose a duty, or confer a power, on the Commissioners for Her Majesty’s Revenue and Customs, or authorise disclosure of information held by the Commissioners, may only be made with the consent of the Treasury.

(4) In relation to a criminal offence created by virtue of subsection (2)(h), extended entitlement regulations may not provide for a penalty of imprisonment on conviction on indictment greater than imprisonment for a term not exceeding two years (whether or not accompanied by a fine).

(5) If provision is made by virtue of subsection (2)(j)—

(a) the maximum amount of any penalty that may be specified in, or determined in accordance with, the regulations is £3,000;(b) the regulations must include provision enabling a person on whom a financial penalty is imposed—(i) to require a review of the imposition of the penalty or its amount by the person who imposed the penalty;(ii) to appeal against the imposition of the penalty or its amount to the First-tier Tribunal.(6) The Secretary of State may by regulations substitute a different amount for the amount for the time being specified in subsection (5)(a).

(7) In section 15 of the Childcare Act 2006 (powers of Secretary of State to secure proper performance of English local authorities’ powers and duties under Part 1 of that Act) references to Part 1 of that Act are to be read as including a reference to section 1 and this section.

(8) In this section—

“childcare” has the meaning given by section 18 of the Childcare Act 2006;“English local authority” means—(a) a county council in England;(b) a metropolitan district council;(c) a non-metropolitan district council for an area for which there is no county council;(d) a London borough council;(e) the Common Council of the City of London (in their capacity as a local authority);(f) the Council of the Isles of Scilly;“parent” has the same meaning as in section 1;“qualifying child of working parents” has the meaning given by section 1(2).”

Amendments 19 to 20 (to Amendment 18) not moved.

Amendment 20A (to Amendment 18)

Moved by

20A: After Clause 1, line 44, at end insert—

“( ) Regulations as described in subsection (2)(b) must ensure that the times at which childcare is to be made available provide sufficient flexibility—

(a) for parents who work outside the hours of 9am to 5pm, Monday to Friday; and(b) to ensure that childcare is available during school holidays within the local authority area of the relevant childcare provider.”

I thank the Minister for his very general but principled commitment to greater flexibility and for his willingness to explore the possibilities. However, at this stage I would have hoped for a much clearer definition of expectations in the flexibility that we are going to allow when providing childcare. For those reasons, I would like to test the opinion of the House.

Amendment 21 (to Amendment 18) not moved.

Amendment 18, as amended, agreed.

Amendment 22

Moved by

22: After Clause 1, insert the following new Clause—

“Childcare duty: consequential amendments

(1) In section 99 of the Childcare Act 2006 (provision of information about young children: England), in subsection (1), omit the “and” at the end of paragraph (aa) and after paragraph (b) insert “and

(c) any other person who provides early years provision for the purposes of section 1(1) of the Childcare Act 2015 (Secretary of State’s duty to secure 30 hours free childcare available for working parents),”.(2) In Chapter 4 of Part 2 of the School Standards and Framework Act 1998 (financing of maintained schools)—

(a) in section 45A (determination of specified budgets of local authority), after subsection (4B) insert— “(4C) For the purposes of this Part, a duty imposed on a local authority in England under section (Discharging the section 1(1) duty) of the Childcare Act 2015 (duties in connection with Secretary of State’s duty to secure 30 hours free childcare for working parents) is also to be treated as an education function of the authority.”;

(b) in section 47ZA (free of charge early years provision outside a maintained school: budgetary framework: England), in subsection (3), for paragraph (a) (but not the “and” after it) substitute—“(a) for the purpose of the discharge of—(i) the authority’s duty under section 7 of the Childcare Act 2006, or(ii) a duty imposed on the authority under section (Discharging the section 1(1) duty) of the Childcare Act 2015,”.”

My Lords, this new clause makes amendments to existing provisions of primary legislation that are consequential on the new duty on the Secretary of State under Clause 1 of this Bill and the Secretary of State’s powers to make regulations for the purpose of discharging that duty.

The proposed amendment to Section 99 of the Childcare Act 2006 would enable the Secretary of State to require childcare providers who deliver the extended entitlement to supply basic information about children receiving free childcare to local authorities and to the Secretary of State. Since 2008, childcare providers who deliver the current early education entitlement have been required to provide individual child-level data to local authorities and the Secretary of State through the school census and the early years census. The information collected enables the department to monitor take-up of free places and measure the success of the early education entitlement. Take-up rates are then published annually.

Take-up rates are key to ensuring that funding for the early entitlement is properly allocated to local authorities and, in turn, to providers. This also enables us to identify any children who are accessing more childcare than they are entitled to, which is vital in order to guard against abuse of the system. We wish to do the same for the new extended entitlement. Providing basic information about children in their care, such as their name, date of birth and the number of government-funded hours they take up, does not place an undue administrative burden on providers, as it is information they hold as a matter of course.

I should also like to reassure noble Lords that robust safeguards are in place that prohibit publication of the data in a form that names or identifies individual children. The collection and use of data by the Secretary of State, local authorities and other specified persons is, in any case, also bound by the provisions of the Data Protection Act. I am sure that noble Lords agree that making provision to enable local authorities and the Government to collect data on children accessing free childcare is key to enabling us to monitor the successful delivery of the entitlement.

Secondly, I turn to the amendment to the School Standards and Framework Act. That Act, together with regulations made under it, sets the legal and budgetary framework for the allocation of financial assistance by local authorities to maintained schools, and to private, voluntary and independent providers of free early years provision in their area. This amendment extends that legal framework to financial assistance provided to settings delivering the new entitlement to 30 hours of free childcare for working parents.

I hope that noble Lords agree that it is important that we monitor take-up of the extended entitlement and that the existing legal framework for the allocation of funding by local authorities to childcare providers is updated to reflect this new entitlement. I urge noble Lords to accept this amendment, and I beg to move.

My Lords, will the data give information about the number of homeless families that are taking up the entitlement, for instance, or about the number of families with children in income poverty taking up the entitlement? If it is helpful to her, I am happy for the Minister to write to me.

Amendment 22 agreed.

Amendment 23 not moved.

Amendment 24

Moved by

24: After Clause 1, insert the following new Clause—

“Funding of childcare

For the purposes of discharging the duty imposed by section 1, the Secretary of State must ensure that—(a) the level of payment made to any childcare provider by the Secretary of State for the provision of childcare is paid at a rate which ensures that the provider does not have to subsidise the cost of providing free of charge childcare by placing additional charges on other childcare which they provide; and(b) particular provision is made for children living in deprived areas.”

In moving Amendment 24, I will speak also to Amendment 25. I have three things to say, as there are three areas that these amendments cover.

First, we know that capital funding is a big issue for the National Association of Head Teachers in particular. The association is concerned that, with growing numbers in the primary phase and the early years phase per se, there will be inadequate buildings expansion to address the additional 15 hours’ free childcare. Local government associations are also pressing the Government to commit to a capital fund for the expansion of buildings to ensure that the childcare can be accommodated. That is one reason why we tabled the amendment: to ensure that the Minister considers this issue when he makes these decisions.

Secondly, I want to focus on children in deprived areas. I know that the Government will respond by saying that there is an early years pupil premium. Indeed there is. It is worth £300 a year. That is 25p for every hour that a child is in full-time childcare. This is not really sufficient to make a significant difference to those children. On top of that, increasingly, the direct schools grant is not focusing on deprivation factors. Together, those two elements have resulted in us tabling the amendment in order to draw the Government’s attention to the importance of considering this issue as a matter of urgency when funding decisions are made.

My final point, raised earlier in the debate, is about cross-subsidisation. I will repeat the figures I was given—on Facebook, as it happens. Some parents are paying a rate of £5 an hour in the free element of their childcare. That rises to £8.53 when parents are paying for childcare outside the free hours. That shows the difference between the cost applied to free childcare and the figure that the provider needs in order to have a sustainable business. For those reasons, I have tabled these two amendments. I beg to move.

My Lords, I support these amendments. In essence they follow on from our earlier debate about funding. The noble Baroness has made a compelling case for the payment schemes being fully funded. This is important for providers and local authorities, who do not want to discover that once again, they are being expected to cross-subsidise the free places from other budgets or income streams. It is particularly important for children living in deprived areas, for whom additional funding from another pot simply might not be available.

We also support the strong case being made for an element of capital funding being included in the local authority grant. If part of the Government’s strategy is to increase demand and bring new people into the jobs market, rather than simply provide a higher subsidy for those already in work, extra capacity will need to be found. We cannot rely on the market to fill this gap, particularly in the poorer areas, so local authorities will need to step in and help.

The last thing that we want as a result of this Bill is for the gap in provision between the more affluent areas and deprived ones to widen, but if we are not careful that could be the consequence if the places are not fully funded. We support these amendments and the certainty that will arise from the commitment to funding being enshrined in the Bill.

My Lords, I would like to speak to Amendments 24 and 25, tabled by the noble Baronesses, Lady Pinnock and Lady Tyler, to which the noble Baroness, Lady Jones, has just referred, and to which the noble Baronesses, Lady Andrews and Lady Howarth, referred earlier in relation to cross-subsidy.

On Amendment 24, I thank the noble Baronesses for highlighting the need for the rate paid to be sufficient for providers delivering the extended entitlement, and for bringing to my attention the need to secure provision for children in deprived areas. I understand the concerns they are seeking to address through these amendments, and the Minister mentioned earlier that we share the aim of getting the funding for the entitlement right. We are clear that this funding must be sufficient to ensure that providers are funded adequately to be able to deliver the additional requirements set out in the Bill.

We have listened to providers’ concerns that increasing government-funded hours will limit their ability to cross-subsidise from parent-funded hours and that delivering at current rates may not be sustainable. That is why the Prime Minister has committed to increase the average hourly funded rate paid to providers. As was mentioned earlier, we are the only party to have made this commitment. We have already committed £840 million of new funding to deliver the extended entitlement, and that is before we deliver on our pledge to increase the hourly funding rate.

My noble friend Lord Nash has spoken at length about the review of the cost of providing childcare, the purpose of which is to provide a robust analytical underpinning for a funding rate that is fair and sustainable for providers and delivers value for money to the taxpayer. I confirm that the review will include in its consideration the needs of children in deprived areas. I also assure noble Lords that the Government understand the importance of early years education for children from disadvantaged households.

We know that high-quality early education can lead to higher attainment later but there is a persistent gap between children eligible for free school meals and their peers in the proportion achieving a good level of development in the early years foundation stage profile. This is why we introduced the early years pupil premium in April this year, which provides extra funding to early years settings for each three or four year-old child from a disadvantaged household. We have estimated that there will be around 170,000 children eligible for this extra support in 2015-16. We expect to receive the first data on take-up of the early years pupil premium by the end of this year and will consider these very carefully and take them into account when we develop future policy.

Turning to Amendment 25, the Government aim to deliver a quality free childcare entitlement, with capacity created cost-effectively without driving up costs to parents. The majority of working families with three and four year-olds already use more than 15 hours of childcare. This means that many children will already be in a childcare place and will not require a new one. Rather, the new extended entitlement will pay for the additional hours parents are already purchasing from an early years setting themselves, helping working families with the cost of childcare.

There is natural growth in the childcare system but we can, and should, encourage new providers to enter the market or existing providers to expand. Collaborative arrangements across different types of providers and increased flexibility for providers are important elements of this. That is why, for example, under the Small Business, Enterprise and Employment Act, childminders will be able to provide childcare on non-domestic premises.

The Government have already made a £100 million investment of capital in early years to support the expansion of provision for two year-olds. We believe there is existing capacity in the system to help deliver the new entitlement, and we are continuing to talk to local authorities to increase our understanding and evidence of where this is. The Government are committed to funding the extension of the entitlement at a level that ensures choice and flexibility for parents, is sustainable for providers, and is fair to the taxpayer. Decisions on the level of funding, including any capital, will be made in the forthcoming spending review. I therefore urge the noble Baroness to withdraw her amendment.

I thank the Minister for her commitment to the capital element and to focusing on areas of deprivation and disadvantaged families in future deliberations. With that in mind, I beg leave to withdraw the amendment.

Amendment 24 withdrawn.

Amendment 25 not moved.

Clause 2: Supplementary provision about regulations under section 1

Amendment 26

Moved by

26: Clause 2, page 3, line 8, at end insert “or (Discharging the section 1(1) duty)”

My Lords, this group of amendments concerns the regulations made under the Bill, which will be key to setting out the detail of the new entitlement, including who will be eligible and how it will be delivered. Therefore, I understand noble Lords’ concerns about ensuring that they have a proper opportunity to scrutinise this detail.

There was much interest in the regulations in our earlier debates in this House and in the report by the Delegated Powers and Regulatory Reform Committee. The committee concluded that the scope of the delegations and powers under Clause 1 as drafted were too wide. Given the importance of secondary legislation to the Bill, I am in complete agreement with noble Lords and with the committee’s report that it would be appropriate for regulations to be approved by a debate in both Houses. That is why I have brought forward these amendments, which would require regulations made under Clause 1 and extended entitlement regulations to be laid and approved by each House using the affirmative procedure. I hope this will reassure noble Lords that we have listened. I hope the Government’s amendments will be welcomed.

Amendment 27, tabled by the noble Baroness, Lady Jones, would ensure that a statutory instrument containing regulations in exercise of any power in the Bill would not be made unless a draft of the instrument had been laid and approved by each House; in other words, it would subject regulations to the affirmative procedure each time the regulation-making power was exercised. We believe it is right that initially we should deal with the regulations under the affirmative procedure, rather than the negative procedure as originally planned. However, we do not believe it is necessary to make them affirmative each time.

We need to strike the right balance between the mechanics of the affirmative process—for example, the need to find time in the parliamentary timetable for debates in both Houses, no matter how small the change—and the ability of government to respond efficiently and effectively to support delivery of the new entitlement, should this be necessary. That is why the government amendments in this group envisage that regulations made under Clause 1 and regulations made for the purpose of discharging the Secretary of State’s duty will be subject to a debate the first time the powers are exercised but that subsequent regulations made under the Bill would be subject to the negative resolution procedure.

The exception to this would be in any instances where regulations seek to amend or repeal primary legislation, or in the case of regulations seeking to update the maximum level of any financial penalty set out in the Bill, which would be subject to the affirmative procedure. This follows the precedents of parliamentary scrutiny adopted in childcare legislation or comparable education legislation. The regulations that underpin the current Section 7 entitlement have been subject to the negative procedure since they were introduced in 2008. These have been amended only four times, and each time the changes were subject to a public consultation.

We believe that our approach is the right one. As noble Lords have already heard, we have made great progress since Committee to narrow the scope and clarify the detail of what we will include in the regulations. I also reassure noble Lords that feedback from parents, providers and employers will be taken into account in the development of the draft regulations, and we will wish to draw on the expertise of noble Lords. Furthermore, we have committed to providing a full impact assessment on the extent of the free entitlement, which will be published when we undertake a formal public consultation on the draft regulations in 2016. Following the consultation, we will lay the draft regulations before the House for a full debate before they can be approved and added to the statute book.

I hope noble Lords agree that by the time they are laid, these regulations will have undergone a significant amount of close scrutiny. Therefore, I am confident that we will be able to present a set of regulations to the House that are fair and workable and remain true to the spirit of the Government’s commitment to support and reward thousands of hard-working families. I beg to move.

My Lords, I regret very much having to put Amendment 27 before the House but, frankly, the Government leave us no choice. We have seen throughout the passage of the Bill the cavalier attitude the Government have taken—not by the Ministers who have represented the Government in this House, I hasten to add, but by the Government as a whole. In support of that assertion, I quote from the 2nd Report of the Delegated Powers and Regulatory Reform Committee, published on 26 June, which says at paragraph 10:

“We note that the Minister said that ‘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’. That is not, in our judgment, a proper use of legislation: the purpose of an Act is to change the law, not to ‘send a message’”.

Earlier, in paragraph 8, the committee says:

“In our view, the Government’s stated approach to delegation is flawed. While the Bill may contain a legislative framework, it contains virtually nothing of substance beyond the vague ‘mission statement’”.

Finally, in paragraph 9 of the report, the committee states that:

“We do not accept the Government’s attempt to dignify their approach to delegation by referring to a need to consult. We of course acknowledge the need for consultation as a precursor to the formation of policy; but this should in our view have followed the well-established sequence of a Green Paper setting out proposals, followed by a White Paper containing the Government’s legislative intentions, and finally the presentation of a Bill”.

There we have it—that spells out quite clearly how the Government should be presenting legislation to Parliament.

Since then, we have had some concessions, but not enough to persuade us on this side not to table Amendment 27. We have argued that all the regulations made on the Bill should be subject to affirmative resolution of both Houses of Parliament. The Government’s response is to say that the initial regulations made under Clause 1 would be subject to an affirmative resolution but not the rest. Why is this? I do not think the Minister has given us a thoroughly acceptable answer this evening. In its 8th report, published yesterday, the committee points out that,

“conditions could subsequently be altered—and conceivably removed—by negative procedure regulations”.

It also says:

“The first-time affirmative procedure that the Government now propose for regulations under clause 1 would mean that the initial (affirmative) regulations would include the eligibility conditions; but conditions could subsequently be altered—and conceivably removed—by negative procedure regulations. We do not regard that as satisfactory, and, in the absence of provision about eligibility on the face of the Bill, we recommend that regulations under clause 1(2)(d) and (2B) in particular should require the affirmative procedure whenever made”.

That is a report of distinguished Members from all sides of this House and we should take note of it. I am not alone in believing that this is a damning indictment of the structure of the Bill, handed down by a distinguished committee. I invite the Minister, in his reply, to state quite clearly that the Government will look further at this and come back, at Third Reading, with an amendment to make all the regulations in the Bill subject to an affirmative resolution. That is righting a wrong and I hope the Government will do it.

My Lords, I support my noble friend on this point. If the Delegated Powers Committee had believed that first-time affirmative action was sufficient it would certainly have said so, because its mark as a committee is to be proportionate. There is a very good reason why it has said, so strongly, that any changes must be done through the affirmative procedure each time. Perhaps I may use the Government’s arguments against them. The Minister previously argued that these definitions of eligibility were technical, but they are not. The point about these regulations is that the definitions represent the substance of the Bill: who is going to be eligible for these extended childcare provisions. They are a serious aspect of the Bill and should be on the face of it. The Minister argued that there may be a need to change the definitions and if they are in secondary legislation they can be changed more easily. If that is the case, the changes to the definitions are very serious indeed. As the committee says, they may be made to remove or add new categories. The Government know that they are dealing with a febrile and dynamic situation with a complex aspect of policy and they may well require to change these regulations. We are dealing with massive uncertainties here. The Government would be well advised—I say this in all sincerity—to follow the advice of the committee in this instance and ensure that each change in the regulations is properly debated in this House by way of an affirmative resolution

My Lords, I do not often listen to myself in debates but I did so earlier on and began to wonder if I was sitting on the right set of Benches, on a Cross Bench. However, I am now reassured that I am, on two grounds. First, I welcome the report of the Delegated Powers Committee very warmly indeed: somewhat more so than the Minister. Secondly, I support the amendment on a belt-and-braces basis. The point has just been made that there are many uncertainties here and we need to be reassured that these will be resolved on the Floor of this House.

My Lords, I have one comment on the report of the Delegated Powers Committee. If all Bills had to be preceded by a Green Paper and a White Paper, there would be a long interval after a general election before there would be any legislation at all. Some people would welcome that but, on the other hand, those who are anxious to fulfil their commitments might not wish to wait that long.

The Government recognise and understand the expressed views and wishes of the House and the Delegated Powers Committee to be able to debate the regulations in more detail. Our amendments will provide a higher degree of parliamentary scrutiny beyond the original intention. Furthermore, the department will continue to consult on any material changes to the regulations once they have been approved and laid under the negative procedure. We recognise the importance of seeking the views of parents, local authorities and providers. Each time the regulations that underpin the current entitlement have been amended, which is only four times, they have been subject to a public consultation. The current entitlement is subject to a negative procedure and we are not persuaded that this situation is sufficiently different to warrant finding parliamentary time for changes which may be minor. The department will continue to follow this good practice and will consult on any material changes to regulations made under Section 1 and regulations made for the purposes of discharging the Secretary of State’s duty under what will become Section 2. Therefore, in the Government’s view, it would not be necessary to include this type of direction on the face of the Bill. I hope noble Lords will be reassured by my explanation that we have listened to their concerns and taken them seriously. I therefore urge the noble Baroness not to press Amendment 27, and for noble Lords to accept government Amendments 26, 28 and 29.

Amendment 26 agreed.

Amendment 27

Moved by

27: Clause 2, page 3, line 17, leave out subsections (4) and (5) and insert—

“( ) A statutory instrument containing regulations under section 1 or section (Discharging the section 1(1) duty) may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.”

Amendments 28 and 29 not moved.

Clause 5: Commencement

Amendments 30 and 31

Moved by

30: Clause 5, page 4, line 2, at beginning insert “Section (Funding review),”

31: Clause 5, page 4, line 4, at beginning insert “Subject to section (Funding review),”

Amendments 30 and 31 agreed.

Amendment 32 not moved.