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Free Childcare Entitlements

Volume 783: debated on Wednesday 6 September 2017


My Lords, with the leave of the House, I will now repeat a Statement made in the other place earlier today by my honourable friend the Minister of State for Children and Families.

“Thank you very much indeed, Mr Speaker, for allowing this Urgent Question, which gives me the opportunity to highlight this Conservative Government’s determination to support as many families as possible with access to high-quality, affordable childcare and early years education. We are investing a record amount. Our support will total £6 billion per year by 2020.

My department is committed to ensuring that all three and four year-olds have access to free childcare. All parents—regardless of income and employment status—are entitled to 15 hours of free childcare for their three and four year-olds. Take-up of this universal entitlement is 95%. In addition, take-up of 15 hours of free childcare for disadvantaged two year-olds is rising, and it is fantastic that over 70% of eligible two year-olds are benefiting from this.

On 1 September 2017, the Government reached a major milestone in delivering their key manifesto pledge to double the free childcare entitlements for working parents of three and four year-olds from 15 to 30 hours. Today I have laid a Written Ministerial Statement updating the House on delivery of the 30 hours offer. By 31 August, more than our target of 200,000 30-hour codes had been issued to eligible parents wishing to take up a place this autumn. Indeed, the actual figure, I can update the House, is 216,384 codes issued.

These families starting their places join the existing 15,000 families who are already benefiting from 30 hours of free childcare in our 12 early delivery pilot areas. Independent evaluations of these areas were encouraging, showing that over three-quarters of parents reported greater flexibility in their working life as a result of 30 hours, and more than eight out of 10 childcare providers who were offering the existing 15-hour entitlement went on to offer 30 hours. During the autumn I will closely monitor the delivery of all free childcare entitlements to ensure continued improvements to all our offers for parents and providers. I will continue to work closely with Ministers at HM Treasury to ensure that parents are able to access the HMRC-run childcare service smoothly.

The majority of parents have successfully applied using the childcare service, but some parents experienced difficulties accessing the service through the system by the 31 August application deadline. However, those parents who are eligible and applied before the deadline will have a code to allow them to access our 30 hours of free childcare. They will not lose out. I am pleased to report that this is yet another key manifesto pledge delivered for working families”.

My Lords, I thank the Minister for repeating that Statement as well as for his Statement on the same subject on 18 July. The Government then responded to an Urgent Question on the process of applying for the 30 free childcare hours. The Minister’s response included the admission that the childcare service is a complex IT system which had “experienced technical issues”. He went on to state that:

“HMRC, which developed the service, has been working hard to resolve these issues and as a result the customer experience has improved”.—[Official Report, 18/7/17; col. 1525.]

I have to say that it has not improved enough in the intervening seven weeks to avoid many parents being unable to get their code to access the 30-hour entitlement. None the less, I note what the Statement says in respect of no one losing out. However, according to figures given by the Minister in another place today, six days after the new entitlement began, only 152,000 out of 390,000 eligible parents have been able both to get a code and to find a place for their children. That represents a success rate of under 40%. What plans do the Government have to increase that rate dramatically? I suggest that re-evaluating the policy’s funding would be one means of doing so.

I hope that the Minister will also be in a position to provide an answer to a key question asked earlier by my colleague Tracy Brabin in another place. She did not receive an answer, but three hours have elapsed and I am confident that the Minister’s officials will have ensured that he arrived at the Dispatch Box fully briefed and able to provide an answer. The question was: can the Minister guarantee that he will not allow a two-tier system to emerge whereby parents who can afford to pay extra will have access to the new entitlement and those who cannot pay will not?

I am grateful to the noble Lord for his comments. I think it is fair to say that no Government have done as much as this one to develop childcare. We have delivered a massive increase in childcare provision and the sector has handled that well. Our evidence from the 12 live pilot projects—not surveys but live projects—is that they are handling this implementation well. As I said, this is a complicated project, which the noble Lord also referred to, but overall it is going well. Of course there are teething problems, as there always are with a new provision, and we apologise to those parents who may have experienced them. We will do all we can to help them.

The evidence from the 12 pilots, however, is that the vast majority of providers are engaging, parents are happy and, for many of them, this project has had a life-changing impact. We have heard some moving stories of parents who have experienced this. Almost a quarter of mothers have reported that they have been able to increase their working hours, along with a 10th of fathers. The fact that some 150,000 or so places have been taken up reflects that these are very early days. It is inevitable when one has a deadline that there is always quite a rush up to it, and the fact that 70% of these children have already had their codes validated by nurseries is pretty good, given that only a few days have elapsed since the deadline and obviously not all parents will want to take up the offer immediately.

We have no desire to preside over a two-tier system. The Government have done all they can to support less privileged children. We have the early years pupil premium, the free entitlement for two year-olds and tax-free childcare. It is certainly not our intention to preside over that kind of system.

My Lords, I welcome the Minister’s Statement. As he rightly said, getting these extra free hours—the 30 hours and the 15 hours—is life changing for many families, particularly working families who perhaps could not afford the extra costs of childcare or did not have the family networks to support them.

I am pleased that the Government have apologised for the problems—the website crashing and the difficulties of the eligibility codes, et cetera. The fact is, mistakes will occur in any new system. The fact that they have resorted to doing some of the eligibility codes by manual means shows the determination to sort this out and ensure that every parent gets the financial support they need.

I have two other issues to raise. The first is not the financial aspect or the application, but whether the places are there to provide for families. I raise the impact of the introduction of free childcare for three and four year-olds on availability of places for one and two year-olds. Two year-olds from the most disadvantaged backgrounds are already struggling to access places in many areas. If we are to create more places for three and four year-olds there is a danger that the places for two and three year-olds will be reduced.

There is also concern about the sector facing quite serious financial problems. The number of nurseries forced to close has almost doubled. The parliamentary Public Accounts Committee found that many private and voluntary providers were finding that the funding they receive does not cover the costs. Are there plans for government to meet with local authorities and the private sector to see what extra support can be provided?

Finally, I would be interested to know what proportion of children eligible for the 30-hour week of free childcare received the eligibility code by 31 August. The Minister might have given that in his reply, but if he could repeat it I would be grateful.

I am grateful to the noble Lord, Lord Storey, for his realistic comments on this complicated but important new provision. As far as availability is concerned, as I said, in the 12 live pilot schemes 80% of existing providers have engaged and another 10% say that they are considering it. Obviously there will be some areas where there may be gaps in provision and we will work with the sector to see that they are filled.

We did a detailed study of the amount of money that should be paid, which the National Audit Office described as thorough and wide-ranging. The recent independent survey from Frontier Economics said that we were more than covering the costs of the extra provision.

So far as support for providers is concerned, the noble Lord makes a very good point that we need to do all we can to help providers develop their businesses. We have a package of support to help providers to ensure that their business remains stable. This includes a document of key insights from successful providers, guidance on marketing, managing finances and business planning, and an online directory of organisations that can provide business and finance support. We have also awarded grants to the National Day Nurseries Association and the Professional Association of Childcare and Early Years to develop new business sustainability resources. We will do whatever else we need to do.

On the percentage, we anticipated on the basis of a 75% take-up that we would get 200,000 applicants at this time. We have had 216,000.

My Lords, I pay tribute to the Minister who has taken this policy through from the beginning—he took the Bill through the Lords and has taken pains to listen to concerns from around the House. I think I speak for us all when I say that we are very grateful to him. On the issue of quality, maintained nursery schools, in particular, where the staff are qualified teachers, find that they have higher expenses and overheads than much other provision, because of their highly qualified staff. Will he pay particular attention to concerns raised from that sector as this is rolled out, and be sensitive to its particular needs?

The Minister was good enough to listen to concerns about homeless families and their access to this provision. Will he also keep an eye on how effective we are at reaching out to them and how the pilots have worked in that area? If he could say some more reassuring words about high-quality provision and assure us that the rollout will not lead to a dilution in quality, it would be very welcome.

I am grateful to the noble Earl for his comments. I should apologise: I promised him a letter last time we discussed this to confirm my point that whether the parents are in temporary accommodation, or even homeless, will have no impact on the provision because it is not based on residence. Perhaps I can save the taxpayer the cost of a stamp by confirming now that that is the case, rather than writing. Of course, we are very keen to preserve the quality of childcare. The figures, as I am sure he knows, are very encouraging. The proportion of children with a good level of development has gone up since 2010 from 56% to 69% and the proportion of childcare providers rated good or outstanding has gone up from 69% to 93%. The gap between disadvantaged children and others has narrowed quite significantly and we have a workforce in which 79% of staff in group-based providers and 69% of childminders are qualified to at least level 3. We are determined to maintain, indeed to increase, the standard of the workforce.