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Free Childcare Scheme

Volume 837: debated on Wednesday 20 March 2024


Asked by

To ask His Majesty’s Government what assessment they have made of the availability of additional funded childcare provision, ahead of the expansion of the free childcare scheme in April.

My Lords, we are delivering the largest expansion of childcare in England’s history. Latest projections show that more than 150,000 new funded places will be secured by April. We expect that number to grow, collectively saving parents more than £500 million in costs. We continue to support the sector’s expansion, with £400 million of additional funding to uplift hourly rates next year and a guarantee that rates will increase in line with cost pressures for two years after that.

My Lords, on these Benches we agree with the ambition of the policy, but delivery of the expansion of the free childcare scheme is falling short. With the charity Coram Family and Childcare finding that parents in some parts of the country are spending over 50% of their income on childcare, and with children needing to be registered for nurseries before they are born, what more are the Government doing to ensure that parents and children get the expansion of free childcare that they have been promised?

It is slightly curious to say that delivery is falling short when the new entitlements start in April of this year. The noble Baroness knows that we have made a significant investment in capital to support local authorities. We have made a number of innovations in relation to the workforce and the uptake of the scheme has been very encouraging. Most importantly—I think the Institute for Fiscal Studies has confirmed this—we have announced very generous funding rates, particularly for younger children.

My Lords, I think we are surprised at the confidence of the Minister, given that we have seen a 50% increase in the number of nurseries that have closed in just the last year, that 40% of nurseries say they are undecided as to whether they will deliver the new funded offer for two year-olds, and that 20% say that they will but that places will be limited. Why is the Minister so confident about this scheme? We hope she is right, but can she give us more reassurance as to why she thinks it will definitely happen?

The first thing I would say is that the noble Baroness and the noble Lord are right that this is a very ambitious expansion of childcare. However, the really significant increase in capacity will be in September 2025, so we have some time to put in place what is needed to deliver on that. The noble Lord talked about the number of nurseries that have closed. I know he is also aware that the childcare workforce has gone up year on year, over 2022-23, and is up by 40,000 places—I mean that the number of places has increased in the past five years by 40,000, while there has been a 1% annual decline in nought to five year-olds.

My Lords, I understand that there have been reports suggesting that the pressure on childcare places will cause special needs children to be squeezed out of the provision. Could my noble friend clarify the situation?

We are aware of the concerns to which my noble friend refers. The House knows that we are doing a great deal to create a fairer special needs system. One of the key things here is the phased implementation of the expansion to the 30-hours offer, to make sure that we develop and continue to monitor the capacity for children with special educational needs.

My Lords, why does it take a crisis before the Government act? Is there no forward planning in her department to identify need and do something before it becomes a crisis?

Some people might recognise that the Government are making a very substantial investment in this area. We have already spent more than £20 billion over the past five years to support families with the cost of childcare, and this next step will be another major one.

I really do not think that the House would wish to cast aspersions on the intention of this policy. Most people would think that it was good and worth supporting. However, can the Minister say whether there is an accurate match between the funds that will be available to the sector from the Government to support this expansion and the need that they have identified for the funds in order to do it successfully? I think she will agree that there has been some doubt as to whether those two numbers match.

I genuinely thank the noble Baroness for her question, because it gives me the opportunity to set out a couple of things. One might want to look at funding rates for different ages of children to see whether there is sufficient funding. The funding for three to four year-olds is almost identical in the new scheme to previous rates. For two year-olds, the Government will pay £8.28 an hour, compared to £6.07 previously, and for those between nine months and two years, £11.22, compared to £6.05. I leave the noble Baroness to draw her own conclusions.

Could the Minister help me? She spoke about entitlement. Could she tell me what the difference is between entitlement and delivery?

The Government have committed to deliver the number of childcare places needed for those who are eligible and seek to take advantage of the opportunity that the Government offer.

Does the Minister agree that many families up and down Britain are tearing their hair out over the cost and difficulty of accessing quality affordable childcare? Clearly, delivery is crucial. Would she also agree that childcare is one part of the jigsaw puzzle, and that many working families in Britain are also worried about security of employment and predictability of working hours and income in order to be able to access childcare? What we really need is a new deal for working people that delivers that security, as well as childcare provision.

I know the noble Baroness is well aware of the very substantial increases that we have made in the national minimum wage. To put it in context, the 30 hours of free childcare is equivalent to just under £7,000 per child, which I think she will agree is a substantial contribution to the average family income.

My Lords, one of the best things we had under Tony Blair was Sure Start; it was all over the country and children benefited. Why can we not introduce full Sure Start again, like we had 20-odd years ago, so that children up and down the country can benefit?

I am not sure time permits me to go into everything regarding Sure Start, but I draw the noble Lord’s attention to the family hubs that the Government are rolling out around the country. The learning that we took from Sure Start and put into the family hubs was a focus on disadvantage and the length of time for which families can get support. Sure Start was, understandably, focused on very young children, but those of us who are parents know that one might need support with one’s children at different point as they grow up. That is one of the philosophies behind the family hubs.

Has the Minister looked at comparative data which shows that childcare is so much more expensive and the requirements so much more stringent here than in other countries around the world? It is also the case that calculations have been done in the States to show that, if all childcare was absolutely free, it would eventually be covered by the tax returns from women and other parents who would be freed up to go back to work.

That is exactly what the Government are delivering, and exactly those calculations were behind the Government’s decision to make such an increase. In 2027-28, we will be spending in excess of £8 billion on free childcare hours and early education. To make sure that the noble Baroness is aware, from September 2025 there will be 30 hours of free childcare from when a child is nine months old until they start school.