Clause 9 - Arrangements between local authority and childcare providers
Childcare Bill
12:30 pm
Nick Gibb (Shadow Minister, Education; Bognor Regis and Littlehampton, Conservative)
I thought that this might be an opportunity to get a little more detail from the Minister about financial assistance. The clause concerns arrangements between a local authority and the provider of child care which involve financial assistance from the former to the latter. Clarity on the Government’s intentions would be helpful. Will that financial assistance help with the capital cost of providing child care places or will it subsidise the running costs of child care places, or will it be a combination of both?
In paragraph 5.1 on page 34 of “Choice for parents, the best start for children: a ten year strategy”, it says:
“The Government’s vision is that all families with children aged up to 14 will have an affordable, flexible, high quality childcare place for their child that meets their particular circumstances. In addition, support should be available for finding care outside these hours where necessary.”
Paragraph 5.2 says:
“To meet our commitment a new duty will be placed on local authorities who will be responsible for ensuring that local childcare needs are met, working with central government to make sure that services are both affordable and of a high quality standard wherever families live.”
What does that mean in practice? The child care strategy goes on to say:
“parents will be expected to contribute to the cost of childcare, supported through the childcare element of the Working Tax Credit and any subsidy to the provider.”
My understanding of that is that the principal means by which the Government intend to make child care affordable is through the child care element of the working tax credit. Moreover, they intend for all three and four-year-olds to receive a full 38 weeks of free early education and child care from 2006. The Minister alluded to that. That means, according to page 51 of the 10-year strategy,
“an extension of the 12.5 hours of free childcare for all three and four year olds to 15 hours for 38 weeks a year for every three and four year old by 2010, on the way to the vision of 20 hours a week for 38 weeks a year”.
The Government have said that the principle behind financial assistance—indeed, behind their entire child care strategy—is what they call “progressive universalism”. That is probably the first time that that phrase has been uttered in this Committee, and that surprises me. What does it mean, Mr. Benton? It means help for all and additional support targeted on those who need it most. The way in which the hon. Member for Doncaster, North is nodding, I half suspect that he invented the phrase in an earlier existence—but perhaps not.
The increased number of child care places is as a result of the working tax credit, which is a demand-side subsidy funded by central Government. Furthermore, supply-side subsidies, through the neighbourhood nurseries initiative, have provided for about 45,000 child care places. Central Government funds those also, as they do free places for three and four-year-olds in schools and nurseries. Other initiatives include the new opportunities fund subsidies for out-of-school child care and the Sure Start programme.
The Government’s position is summarised in paragraph 7.4 on page 52 of the 10-year strategy. It says:
“in common with other countries the Government invests in childcare on both the supply side and the demand side. On the supply side payments are made direct to the provider to support and procure provision. On the demand side, payments are made to parents to help with the cost of childcare”.
Paragraph 7.5 continues:
“In addition to providing the universal free part-time early education for three and four year olds, the Government sees an enhanced role for supply side subsidies in driving up quality and ensuring sustainability. The Government also sees a continuing and enhanced role for the childcare element of WTC in helping to make childcare more affordable for families.”
I set that out, Mr. Benton, in an attempt to understand what financial assistance local authorities are being given the duty to provide to child care providers. Is it a supply-side subsidy, in which case is it a capital subsidy to help establish more child care places, or is it a revenue subsidy to help to keep the costs down for parents? If it is the latter, will it be universal or will it be targeted at those who need it most? If the assistance is meant to be a demand-side subsidy, how will that work in practice? Finally, can the Minister set out how the new duty is fully funded? What elements of the support to local authorities are earmarked and covered by the new duties?