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Affordable Childcare (Select Committee Report) — Motion to Take Note

– in the House of Lords at 3:45 pm on 18th March 2015.

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Moved by Lord Sutherland of Houndwood

That this House takes note of the Report of the Select Committee on Affordable Childcare.

Photo of Lord Sutherland of Houndwood Lord Sutherland of Houndwood Crossbench 3:46 pm, 18th March 2015

My Lords, it will not have escaped noble Lords’ notice that today is the day of the Budget. Noble Lords who have a speech will doubtless be pleased to know that there will be no jokes about two kitchens and that the financial statistics that I quote will be unambiguous, clear of criticism and contradiction and absolutely pellucidly in the forefront of what we may accept.

I thank the usual channels for making time for this debate so soon after the publication of the report and before the House rises in anticipation of a general election. There is good reason for that, which I will come to in a moment.

I want to begin by changing the mood away from Budgets and from what I regard as a minor key to a major key. It is not often done in this House, but I shall quote a line of poetry to start the consideration of the issues before us. The line comes from our greatest English-language poet of the 20th century, TS Eliot:

“In my beginning is my end”.

That is the opening line of “East Coker” in Four Quartets. I have no doubt that our subject today is not best understood through the angularity of Eliot’s verse, but there is a resonance there that encourages me to steal or adapt a line fashioned in his world for our world today. My only possible justification for such a crime of literary criticism is Robert Crawford’s recent, magnificent book Young Eliot because, as he makes plain, Eliot pillaged and refashioned lines, descriptions and names from his early boyhood for his poetry in later life. Did you know, for example—this is a pub quiz question—that “Macavity” was the name of a schoolboy in his class whom he did not like very much? He had his revenge. There will be none of that in my speech, I promise.

The line,

“In my beginning is my end”,

has resonance for our subject. I have no doubt that the point will be easily grasped by those who share the enthusiasm of my excellent committee members for early care, education and child development. Simply put, the earliest years of life and what they offer—“my beginning”—resonate and echo throughout all that is to follow in the years thereafter. Some who have a deprived early onset to activity rise none the less phoenix-like from the ashes of early need unmet, but many bear its scars throughout life. Half of the adult male population in England are either illiterate, innumerate or both, and that has its beginnings in what was not done for them very early, before formal education took its course. For most of us, including those least likely to be classified as deprived, how we begin has huge significance for how we continue through life. I will return to that point in a few moments, as doubtless will a number of my fellow committee members.

Early child development and provision for it helps those with great need and those who perhaps are from a less deprived context, but the greatest help inevitably for those who are in need. I have no doubt that successive Governments should be commended for their grasp of this point and response to this correlation. In 1990, in England and Wales 59,000 nursery places were available; there are now 1.8 million. That shows that successive Governments have taken the issue seriously and have put resource, backing and initiative into bringing about high-quality early education.

Clearly, other factors are at play, and I will turn to some of those at the moment, but first I wish to underline in triplicate the impact of all this on children. It is not a matter of teaching nine times tables to three year-olds, although I dare say that a little bit of help with numbers is good. It is rather a matter of helping by laying the very foundations for a whole education and a mature life. Early in life that is what happens—the foundations go down—and it is especially important for those suffering from various forms of deprivation, sometimes personal, sometimes social, sometimes institutional. But there are, as I have stressed, benefits for the many.

The help given in early education and development, just so we are aware of the realities, stretch from changing nappies through learning how to communicate with the help of a good teacher, tutor or assistant, to learning the basics of language, because these are often not available at home. This objective of early child development is clearly at the heart of the policy of all three main political parties, and it is the reason why the Department for Education has such a central role in providing and ensuring that provision is adequate.

There is, however, another main objective, which we picked up in the course of our discussions and in the evidence given to us. This significant additional responsibility lies not with the Department for Education but with the Department for Work and Pensions. The intention is to increase the possibility of joining the workforce for parents—usually mothers, I have to say—with young children. Some family groups need to contemplate this because of poverty, and some wish to do this for the excellent reason that there is a career that has been temporarily laid aside but that will be resumed, and a great contribution will be made to the public through the development of that career. The even greater financial pressure on one-parent households will, I think, be discussed later by one of my colleagues.

Some parents wish to provide a combination of parenthood and developing responsible careers, but it is important to say that some groups gave evidence that not all parents, not all mothers, wished to do this. Some choose deliberately to remain at home, and nothing we say in this report—and, I hope, nothing that is said in this debate—raises questions about the validity of that fair choice.

I have sketched out the two major objectives of government policy: early child development, and the enhancement of careers or the possibility of joining the workforce. If that was all there was to it, we would all say, “Yes, well done”, and we might have gone home to the Back Benches in October, but it is more complicated than that, as noble Lords will assume. We did not pick up the Oliver Twist approach and say, “Thank you very much”, and hold out our begging bowl for more money; rather, we spent our time examining in some detail how effectively and efficiently the huge sums of public resource were being spent in pursuing these objectives.

In examining these twin policies and the difficulties they face, sometimes individually and sometimes because they interact with each other, I pay tribute to my colleagues on the committee, most of whom come from various political parties but who were content to seek common agreement on this issue. I have no doubt that all the political parties will have something about it in their manifestos. However, my colleagues showed the restraint and good common sense characteristic of this place and looked for a common core: namely, what can we all agree on, and what markers should future government policy observe?

The two main areas are early child development and creating additional places in the workforce. Evidence points to the effectiveness of childcare that takes place in a community and a group and is provided, ideally, by professionally qualified people. The life options it opens up to recipients are very wide indeed and very important. As I suggested, this applies to all children, but particularly to those from a needy background. However, the committee stressed that if the relevant policy is to be effective, it will depend on provision by the PVI sector—the private, voluntary and independent sector.

Given that we have a dual economy, it is important that the Government recognise that maintaining the health of this sector is a prerequisite of the policy working and of the places that are created having a realistic option of being filled. I believe that the future of this sector rests on consolidating the quality of what is provided, as we found that the PVI sector gets less money to do the same job. Therefore, the possibility of graduates being employed in this sector is reduced. Graduate employment is the usual external marker of quality and is justified in this case. While that is the case, the PVI sector will not be able to do all that successive Governments have wanted it to do.

A role of government here is to look at how the money goes down the system. We ask for assurances that this will be done and that any incoming Government will have this on their agenda. They should look at how the money goes down the system so that a PVI nursery and a state-maintained one are on a level playing field. It is also clear that PVI provision would be very successful if it were embedded in state schools. There is a sotto voce assumption that this will happen and that somehow schools will increase their intake to include two, three and four year-olds. This would be nice if it were to happen, but there are practical constraints. As we all know, primary schools are under significant pressures of space. Even if they wanted to include these children, they might not have the space to do so. Furthermore, many teachers went into the teaching profession to teach five to 12 year-olds, not necessarily to deal with the rather different problems of very young children. Therefore, these places will not automatically be provided through the state system. Again, I stress the importance of the Government ensuring that there is a healthy market out there so that the PVI sector has reason to expand to meet government targets.

The evidence that we received points to the need to recognise professional links between providers and the homes of young children. Where this is done, the impact is much greater. I could give noble Lords examples of schools and nurseries where this is done very effectively. It means, however, that additional resource is required to meet the additional costs. People will go and talk to parents and ensure that they understand the importance simply, for example, of reading to young children; language lies at the core of this stage of education.

We also looked at what Ofsted does in the inspection system here, and we simply put up a warning signal: if, as is happening now, inspections extend provisionally to two year-olds, perhaps the systems used for five, six, seven and eight year-olds will not transfer down as easily as they do to reception classes, so we would like Ofsted to be encouraged to look at how it assesses what is going on in these classes.

Many more detailed points will be made by my colleagues. In the concluding section of my remarks, I simply want to hang on to the question of creating work spaces. I have to say that there is simply an element of naivety in government in all this. That came out in some of the answers that we got. There is too readily an assumption among some politicians that if we provide the cash and the numbers, and get the headline, all will be well. It is not as straightforward as that. There is, for example, tension between the provision made if one’s focus is the first objective, early child development, as compared with the second objective, creating employment possibilities. The difference is clearly illustrated and there are many aspects to it, but if one wants high-quality child development, all the evidence we have is that the best way of doing this is three hours a day for five days a week. If, however, one is trying to create flexibility of employment, employers will most probably be looking for two eight-hour sessions from the mother in question. These differences can be reconciled, but we did not see sufficient thought being given to the implications, hence my charge of naivety.

I have reservations about how well this is working. Again, it is assumed that places will be created—“We have put the resource in, and there will be places”. That is not inevitably so, and the evidence again is that in rural areas the availability of places does not always match the demand. There may be a long distance to travel between work, home and nursery school. We noticed too—and this is from the IFS—that in the recent round of funding £64 million was spent creating new jobs. That amounted to 12,000 new jobs. That is not a great return for £64 million and is certainly less than might reasonably have been expected by such a creative policy.

I have suggested that there is a potential tension between the two aspects of policy, and this shows up in the way in which the private and voluntary sectors will want to plan provision. They are under severe constraints and, for example, often end up cross-subsidising the so-called free places by charging extra sums for the additional hours to parents who can afford it. All this is part of the background that needs more thorough inspection than we believe the Government have given.

In conclusion, there are two areas of confusion. One is for parents who are trying to use this system. The evidence is that they do not find it clear, simple and available. The evidence is that they, as parents, have decisions to make, and the answers are perhaps not immediately apparent to them. This shows up in a variety of ways, but there is an assumption, usually by accountants who work for the Treasury or the Inland Revenue, that the country out there is full of people who are economically rational men and women. That is not so; nor do they have the skills of an accountant to work out what government process is or how the financial systems work.

We will be told that the new system is in fact such that all will be clear next autumn when it comes in. We will see. The guidance issued for the new way of supplying this says:

“For every 80p you or someone else pays in, the government will top up an extra 20p. This is equivalent of the tax most people pay—20%—which gives the scheme its name, ‘tax-free’”.

When you get government advice telling you what “tax-free” means, look out: I see the hint of someone spinning here. It is not clear.

This is my last point. The other unclarity is at government level, where two main departments deal with this—education and work and pensions. There is also the overriding dark space of the Treasury. As a Select Committee of your House, we could not get to the bottom of how these two government departments interact and discuss how a common set of policies will cohere. For the reasons I have given, there are difficulties. We could not get a picture of whether Ministers meet regularly, whether officials meet regularly, or whether there are minuted meetings. As I said, the Treasury was notable by its darkness and its absence, as I think the House now knows very well.

If this is to continue to be a source of investment—I hope it will—clearly we need to ensure that evidence-based policy has adequate research to back it up. I beg to move.

Photo of Baroness Shephard of Northwold Baroness Shephard of Northwold Conservative 4:06 pm, 18th March 2015

My Lords, I am very grateful to have been a member of the Select Committee on Affordable Childcare under the expert chairmanship of the noble Lord, Lord Sutherland. I am delighted, too, that parliamentary time has been found for the committee’s report to be debated in this House. It is a privilege to follow the noble Lord. As ever, he has given a wonderful tour d’horizon, which does not leave an awful lot for the rest of the committee to say. I will be very brief in my remarks, but knowing the other committee members’ enthusiasm and expertise, I do not think that the debate will be truncated.

The committee was conscious in its deliberations that we are in an age of austerity. For that reason, we frequently referred in an admiring way to the fact that this Government and their predecessor managed to make advances in recent years in early years provision. These include the free early education entitlement of 15 hours a week for 38 weeks in the year for all three and four year-olds and for the 40% most disadvantaged two year-olds—to be extended to 60% of that group from September. There is the childcare element in what is now universal credit, and, despite the remarks of the noble Lord, Lord Sutherland, what will soon be the employer-related tax-free childcare scheme. Indeed, one of the most useful, practical things that the Government have agreed is the extension downwards of the eligible age range for use of pupil premium.

In my brief contribution, I would like to emphasise three points. The first is the need for clarity in government objectives for early years provision, and, associated with that, a clear system of evaluation of outcomes. The second is the need to prioritise scarce resources where they can be most effectively used. The third is the need for high-quality provision, because it is only high-quality provision that can be effective in achieving the best outcomes for children, in particular the best outcomes for the most disadvantaged.

First, on clear objectives, the committee found that, even if we were not in an age of austerity, where every pound counts, there is a need for the Government to clarify their objectives in early years provision. The noble Lord, Lord Sutherland, touched on this point. What is the aim of the provision? Is it to improve children’s life chances or to facilitate parental employment and thereby help alleviate poverty? The Minister who gave evidence to the committee said that both were government objectives, and indeed both are obviously very important. However, if that was so, we felt that there should be much more of the kind of meaningful evaluation of the outcomes of early education provision that one would expect from a total spend in England and Wales of £6.4 billion a year in the next Parliament. It is a big sum and we should know how the policies are working and how they are achieving the objectives.

The clarity of objectives and, indeed, evaluation was not made easier by—as, again, the noble Lord, Lord Sutherland, touched on—the proliferation of lead departments, not least of course the Treasury, which was so modest about its role that it refused to come and give evidence to the committee. This has been vigorously taken up by the leadership of this House and I think that there may be a change of practice in the next Parliament. That would be a very good achievement for the committee and all its supporters on that issue.

Secondly, I turn to one of the Government’s most important objectives of overall policy in education, which has been to narrow the attainment gap. Given that, one of the committee’s key recommendations, which appears on page 7 of our report, was that the Government should,

“prioritise its spending to ensure best value for its investment. We know that children from disadvantaged backgrounds stand to benefit more from early education, and”— this is a key point—

“are less likely to be accessing it in the absence of the policy. We therefore recommend that the Government reviews the overall budget for early education and childcare support and considers whether the evidence supports targeting more resources at those children most likely to benefit. A tool for doing so already exists in the Early Years Pupil Premium”.

Last week, research commissioned by the Early Intervention Foundation, the Cabinet Office and the Social Mobility and Child Poverty Commission, of which I am deputy chair, confirmed the importance of social and emotional skills in relation to a range of adult outcomes, from jobs to health. The research showed how such skills play a role in accessing top jobs, independent of academic attainment, and how gaps in these skills open up early on—indeed, they are observable from the age of three—between children from advantaged and disadvantaged backgrounds.

By the time children reach the age of 10, social and emotional skills play a discernible role in transmitting access to top jobs between generations. In other words, early years intervention in this area is a major tool in improving attainment and therefore also social mobility.

These aims in themselves are obviously strongly desirable, but the absence of policies—again, as referred to by the noble Lord, Lord Sutherland—aimed at promoting such skills is costly in every way: to individuals, families, society and the Exchequer. A recent report from the Early Intervention Foundation calculated that local and national government in England and Wales are spending nearly £17 billion annually on picking up the pieces from damaging social issues affecting young people, some of which, the Early Intervention Foundation believes, could be averted with the right kind of intervention through early education.

Thirdly, I say the “right kind” of early years intervention because another important finding from our Select Committee’s work is that the quality of early years education is all-important and that at least a quarter of the disadvantaged two year-olds accessing their free entitlement to early education are doing so in a setting not judged good or outstanding by Ofsted. It is excellent that settings are inspected by Ofsted. It is also excellent that the Government have made an attempt to improve the life chances of disadvantaged two year-olds by entitling 40% of them to 15 hours of free early education. Of course, it is excellent that there is a mixed market in that there are two strands of provision, one of which, in particular, provides a sort of flexibility which is so valued and so essential for many parents. The noble Lord spoke of the difference in quality provided in the different strands at their extremes. I think the committee felt that the next push should be to improve the quality of provision overall, so that resources are not squandered on measures that in the end are not effective enough to do the job.

A key element in the quality of provision is the level of qualification of the staff, and the next Government should look very carefully at what kind of early years education and childcare is being provided, and how effective it is, particularly in the case of disadvantaged children. The empowerment of those children by all the tools society has at its disposal—and that includes early years provision—will make a better society for all of us.

Photo of Baroness Massey of Darwen Baroness Massey of Darwen Labour 4:16 pm, 18th March 2015

My Lords, I am delighted to follow the noble Baroness, Lady Shephard, today. She was such a vital force in this inquiry and I want to reinforce some of her remarks this afternoon. I am very grateful to the noble Lord, Lord Sutherland, not only for securing the debate and introducing it with such vigour, but for his superb, patient chairing of the Select Committee which produced this report. I thank all those involved because being part of the Select Committee was a most enlightening and productive experience—and an enjoyable one.

The noble Lord, Lord Sutherland, mentioned, that all political parties place great emphasis on high-quality childcare as a contribution to two aims: encouraging women, in particular, back to work; and giving children a good start in their intellectual, social and emotional lives. For me, the second of these, focusing on benefits to children, is the most important thing we should be attending to, and I shall focus today on issues raised in Chapter 3 of the report, on child development.

I was one of those mothers who chose to stay at home to look after children. It was easier in my day and I enjoyed looking after young children. We all know that the lives of parents today are much more complex than many of us experienced as parents, particularly for women. Parents want high-quality childcare and need to be able to afford it. Some parents say that they find the system of delivery overcomplex in seeking both high quality and flexibility. We point this out in our conclusions and recommendations in our report.

As I say, I wish to focus mainly on child development. The committee was aware of much research and emphasis placed on early intervention and its impact. We sought in the inquiry to hear about more research and the evidence base, the impact on policy development, the attainment gap, the home learning environment and the quality of childcare. First, on outcomes and the evidence base, mentioned by the noble Baroness, Lady Shephard, we state at the beginning of Chapter 3:

“The overwhelming view of our witnesses was that early education, when it is of high quality, had the potential to have significant and long-lasting effects on outcomes for children”.

The key words, of course, are “high quality”—what constitutes high equality, where it is evident and what impact it has. The Effective Pre-School, Primary and Secondary Education, which started in 1997, was quoted by many witnesses and the noble Baroness, Lady Shephard, referred to it today. It followed 3,000 children in England from the age of three to 16. The survey states that pre-school experience, compared to none, enhanced all-round development in children and was particularly advantageous to those children who were most deprived. Settings with staff with higher qualifications had higher quality scores and their children made better progress. Quality indicators included warm, interactive relationships with children, having a trained teacher as the manager and a good proportion of trained teachers on the staff.

The study also states that, for all children, the quality of the home learning environment was more important for intellectual and social development than parental occupation, education or income.

Other findings of the study include an estimate of the economic value of investing in early education. GCSE scores were used to predict future lifetime earnings and positive benefits to the Exchequer.

As others have said, we are looking at two types of pre-school care and education—the local authority-funded maintained schools and the private, voluntary and independent providers, the PVIs. Research suggests that the quality of early education provided by the state is, on average, better than other education, although improvements are happening. The key factors beneficial to child development identified in the EPPSE study were borne out by witnesses to our inquiry for all settings.

On the attainment gap in children, the view of our witnesses indicated that early education was important but that was, on its own, not sufficient. Barnado’s said that there had been a consistent and large gap in educational attainment in the UK based on income. The Early Childhood Research Centre told us that there was a 19-month vocabulary gap at age five between children of the poorest and most affluent families. The implications are clear. Children in deprived areas need the best quality early years education. The reverse is often true, according to our witnesses. The best quality care is in more affluent neighbourhoods.

Family intervention was discussed by some witnesses. One said that even the best early education could not be a magic bullet and many said that a strong home learning environment was important. Professor Nutbrown advocates the use of home visits by childcare providers to improve parental confidence and support in learning. A good example—I quote from other research, not the evidence we heard—could be the NCB’s family literary intervention project for two to five year-olds, where parents are encouraged to read with and talk to children. The current Ofsted inspection framework for early years settings also places an emphasis on the important of engaging parents with their child’s development.

Quality of staffing in the early years settings is, of course, crucial. We heard a great deal of evidence about the importance of qualified and trained staff. Staff ratios were also considered important. The National Day Nurseries Association pointed out that the Government’s proposal in More Great Childcare had been largely rejected by professionals because relaxing ratios would risk damaging the quality of childcare.

Several witnesses raised the issue of a lack of available data on which to assess the impact of current free early education, partly because—I was quite surprised at this—there appears to be a lack of baseline data from which to measure progress. Ofsted recognises this, as well as the confusion created by the different assessment frameworks in place for private and maintained settings. I understand that the Department for Education has now commissioned the Study of Early Education and Development—SEED—to assess the impact of the free early education entitlement offer, in particular the impact of funded places for two year-olds from lower income families. Other studies are also now in place. The committee recommended that the Government should seek robust evidence on the impact and value for money of their early education entitlement offer.

I shall summarise the key findings on early years development and offer a few comments. First, the quality of childcare is all-important. It means excellent staffing and a stimulating environment for children. Secondly, the committee recommended that the Government should review the situation and consider whether the evidence suggests that more resources should be targeted at those children who are most likely to benefit. I have no doubt that this is what should happen. The consequences of deprivation are horrendous, as the noble Lord, Lord Sutherland, pointed out. Thirdly, the home environment is vital to developing the social, emotional and intellectual skills of children. Again, I have no doubt that more work with parents and young people before they become parents is needed.

Parenting is a tough job and good practice can be learnt. Fourthly, I also have no doubt that better evaluation of the impact of early years education is essential in order to assess what is best for children, parents and professionals.

I hope that note will be taken of this report by politicians, the providers of childcare and by parents. It sets out a wealth of evidence and makes several recommendations. Again, I have been pleased to be part of the Select Committee and I thank my colleagues and the noble Lord, Lord Sutherland, for their persistent involvement in the important issue of affordable childcare.

Photo of Baroness Walmsley Baroness Walmsley Liberal Democrat 4:26 pm, 18th March 2015

My Lords, I thank and congratulate our chairman, the noble Lord, Lord Sutherland, our two special advisers, Professor Kathy Sylva and Dr Gillian Paull, and our excellent clerking team for the way they have helped us to make sense of a very complex situation. Our witnesses stated two main policy objectives for government involvement in the early years. Firstly, fostering child development, and by doing so reducing the attainment gap between rich and poor and improving social mobility. Secondly, increasing parental employment, and by so doing helping families to balance their budgets and reducing child poverty. It soon became clear that there is a tension between these two objectives, since certain funding focuses to support the one might possibly hinder the other.

Part of the Government’s difficulty in using their levers is that we have a mixed economy of early education and childcare provision in this country. The private, voluntary and independent—PVI—sector delivers the majority of places, especially the free entitlement places, but the maintained sector delivers most places for four year-olds and is very important and influential for younger children, too. Each sector has its strengths and weaknesses. The highest-quality early education is found in maintained nurseries and schools, although they often do not provide the flexibility that parents need to enable them to go to work. The PVI sector is very flexible, but although there are some excellent settings, quality overall is patchy and in some places poor. We concluded that if they are to achieve both of their policy objectives, the Government must support and celebrate the strengths and address the weaknesses of both. It is the issue of quality upon which I propose to concentrate today.

It became very clear that the best value for government money comes from providing high-quality early education to children from disadvantaged families because they are the ones who have shown the greatest improvement in outcomes when they experience quality provision. Indeed, we went so far as to say that funding poor-quality places is a waste of government money. The coalition Government have attempted to address the attainment gap for disadvantaged children in two ways. The first is by introducing the offer of 15 hours per week free early education and childcare to the 40% most disadvantaged two year-olds to get them involved in a stimulating environment early. It is early days for this policy, and we still do not have figures for uptake, but we have ascertained that not all of these places are being delivered in high-quality settings. That is why we have recommended that the Government will get best value for their money if they move as soon as possible to funding these places only in good or outstanding settings.

What do we mean by quality? The evidence showed us that the best outcomes are where there are qualified staff, outreach into communities and homes, and integrated services, as well as a nurturing, stimulating and safe environment for the children. So where do we find the best quality? The answer is clear. It is in schools, particularly maintained nursery schools, where 57% were found to be outstanding by Ofsted and 39% good. This compares to 12% outstanding across the whole sector and 65% good. Fortunately, because this is where they are most needed, two-thirds of maintained nursery schools are to be found in disadvantaged areas—indeed, these schools are unique in providing outcomes which are as good as, if not better than, schools in affluent areas. No other part of the education system does this, so it is well worth scrutinising them to find out how they do it.

These 410 nurseries, currently providing about 38,000 places, are maintained schools, funded by local authorities, and therefore they have to employ a qualified head teacher, qualified early years teachers and nursery nurses. They have particular expertise in helping children with special needs and have a higher than average concentration of such children. Their role is also to reach out to disadvantaged families, to whom they offer other services such as health and social care because of their multidisciplinary ethos. They help parents improve the home learning environment and they play a vital role in research, leadership and training for the whole sector, since many of them are now teaching schools.

Clearly, we need to foster these schools and, if we want to help PVI settings to improve their quality, we must help them to become more like maintained nursery schools. The problem is that teachers do not come cheap; nor should they. In an attempt to be fair, the previous Government introduced a “level playing field” as regards funding—which is actually anything but level. As a result, settings that are prepared to employ teachers—or must employ them, in the case of maintained nurseries—are not funded appropriately to do so. The PVI sector cannot afford to employ teachers in any numbers, partly because the free entitlement on which they rely is funded below the cost of delivery, which causes them to top up their income elsewhere in order to break even. We said that this must be addressed.

We also need to increase the supply of qualified early years teachers, perhaps by reintroducing the leadership fund, and to fund the free entitlement properly to ensure that, where settings are employing teachers, they get the money to do so. The Government have used bursaries to pay the tuition fees of students studying to become teachers in other shortage subjects, such as sciences and modern languages. I see no reason why the same cannot be done in order to increase the supply of well qualified people in the early years sector. However, at the same time, something must be done to ensure that there are jobs for them to go to when they qualify. Professor Cathy Nutbrown had a lot to say in her report about this, and the committee regretted that the Government have not yet felt themselves able to implement all her recommendations.

If there is no additional money, improvements in outcomes must be achieved by prioritising certain groups of children. Fortunately, thanks to the Liberal Democrats in the coalition, the Government have already developed a tool by which this can be done—this is the second way in which the Government are seeking to address the attainment gap. As has been mentioned, it is called the early years pupil premium. It starts next month and I am convinced that it is going to be as successful as the school age pupil premium has been. Indeed, we have committed to working in government towards tripling the current level of EYPP in order to narrow the attainment gap between rich and poor children even further.

Now, something has happened since our Select Committee published its report, and I really wish we had had this evidence before we did so. The organisation Early Education has published an audit of maintained nursery schools which makes for worrying reading. It shows that, due to a series of cuts in funding from local authorities, many of these schools are faced with closure. They are certainly not able to expand their available places in the way that excellent schools further up the age range have been able to do under this Government. This is a long-term trend—about one in three has closed over the past 30 years—but if we are looking for models of best practice to assist us in bringing up the quality of the whole sector, we need to stop this trend in its tracks. I hope that the early years pupil premium will help because it will go to those settings working with the most disadvantaged children: that is, the maintained nurseries.

However, one other solution has been proposed by the sector since we published our report, which is that maintained nurseries are given greater freedom to innovate to avoid closure. A few are federating with primary schools already, but they are asking to be allowed to become academies or co-operative trusts. They are doing so reluctantly, because most of them value their relationship with local authorities and would prefer to be adequately funded by them. However, hard decisions have to be made, and if it is academise or close, most of them would prefer the former. I am aware that this situation has been brought to my attention since we published our report, but it is reassuring that a great deal of what Early Education recommends in the audit to which I have referred is exactly the same as the recommendations in our report. There is considerable synergy there. I ask my noble friend the Minister: are the Government aware of the dangers facing these centres of the excellence that the Select Committee is seeking, and will they consider the sector’s request to allow academy freedoms further down the age range?

Photo of Lord Patel Lord Patel Crossbench 4:36 pm, 18th March 2015

My Lords, it was a privilege to be a member of the Select Committee on Affordable Childcare under the chairmanship of my noble friend Lord Sutherland of Houndwood and in the company of so many knowledgeable and sometimes very lively other members—they were certainly highly knowledgeable.

Today I will focus on childcare support and its effect on maternal employment, and the effects of demand-side subsidy on parents with low income.

One of the three aims of the Government’s investment in childcare is to allow parents to work. The committee felt that there is another aim of childcare support: poverty reduction. I will briefly speak on both these issues.

Although childcare costs are a concern of both parents, it is usually the woman’s employment that is most affected. In the evidence submitted in response to the question, “Did childcare support improve the mother’s ability to work?”, there were fewer responses, but the majority commented that the key aim of returning to work was poverty reduction. The evidence from the Family and Childcare Trust and the Child Poverty Action Group was that both felt that by making the return to work possible, childcare support helped reduce child poverty, particularly for lone parents.

Has state support for childcare resulted in more women working? The initial introduction of childcare policies in the 1970s saw a dramatic rise in maternal employment rates, which reached 65% in 1998, but the current rate is only slightly higher at 68%—in contrast to the rate of employment of single parents, which has risen from 46% in 1998 to 64% in 2014. Both those figures suggest that there are other forces and policies that may have contributed to maternal employment rates apart from childcare policies. There has been no evidence-based evaluation of the impact of childcare subsidies on maternal employment—a view shared by Professor Brewer from Essex University.

Further, the Department for Work and Pensions has accepted that no estimates of the impact of either working tax credit or universal credit on the maternal employment rate has been carried out. HM Treasury, while believing that higher childcare costs act as a disincentive to work, admitted that there was a lack of evidence to link working tax credit to employment rates. The committee further looked at evidence on the impact of free early education on maternal employment rates. While the policy clearly increased the number of children who could access free early education, there was minimal effect on increasing employment rates for women. The assumption was that reducing childcare costs to the parents would inevitably result in gains to the Exchequer from more working parents and, to this end, the Department for Education and the Treasury provided impressive sums that they had assumed in terms of possible financial gains. However, there was a lack of evidence to support links between demand-side support and the maternal employment rate.

It is undoubtedly true that the government policies in relation to childcare have made a difference to meeting the objective of child development, as was referred to by others, and, to a lesser degree, the objective of reducing child poverty. However, there is insufficient evidence to judge whether they have made an impact on maternal employment rates. There is an urgent need to bridge the evidence-base gap on parental employment and childcare costs. Therefore, I say this to the Minister that I hope that this Government, and hopefully the future Government, will gather evidence to establish the link between parental employment choices and childcare costs, which is one of the recommendations of the report.

I turn briefly to the other issue and will comment on some aspects of the demand-side subsidy of childcare support and its effects, particularly on the less well off and single parents. I believe that there is a real concern here. Most of the evidence received tended to focus on the childcare element of working tax credit, possibly reflecting on the poverty reduction issues that were a concern for most who submitted evidence. Those who submitted evidence also commented on the complexity of the funding streams and the confusion that that causes.

My comments concentrate on the effect that childcare support has on the lives of single parents, a concern highlighted by the charity Gingerbread and others. Single parents rely on childcare to work, study and help reduce poverty. The Government’s commitment to make work pay and the general acceptance that it is the best way out of poverty have to be commended. However, increasing childcare costs, well above inflation, flat wages and the fact that single parents often are in insecure employment with lower wages mean that, for them, the reality is different. In 2011, the cut in state support from 80% to 70% of childcare support undermined the government policy of making work pay.

The government proposal to help low-income families by increasing state support to 85% of childcare support is welcome, but limiting it to new universal credit claimants and only from April 2016 has its drawbacks. While it will help single parents, those living in areas with higher childcare costs and lower wages will see little benefit. Added to that, single parents have different childcare needs, often have to work longer hours using different childcare providers and are faced with other costs, such as meals and upfront funding, which they find difficult to meet. For those and other reasons, for single parents and parents with disabled children there is a need for improved support for childcare.

We need a childcare support system that is less complex and works better for poorer families on lower wages. That may mean more targeted childcare support, removing any disparities resulting from the welfare system, and may mean revisiting the childcare cap. I hope that the Minister can say that this Government, and any Government who follow, will look at these issues and bring forward ways to implement a childcare system that works better for the poor and the disadvantaged. At least, I hope that the Minister can commit to review by autumn 2016 how the childcare reforms are working, whether the commitment to make work pay has been realised, and how universal credit and the new tax-free childcare support pathways are working. I hope that she will be able today to comment on those proposals.

Photo of The Bishop of Derby The Bishop of Derby Bishop 4:45 pm, 18th March 2015

My Lords, I, too, congratulate the noble Lord, Lord Sutherland, on chairing the committee, on introducing this debate and on enabling us to have TS Eliot as a frame alongside the pragmatism that we need in looking at this important issue. I rise with some trepidation, because I am perhaps the first speaker who was not a member of the committee, so I speak without that expertise behind me.

It is important that we commend successive Governments on putting early education and childcare, and return to work for parents, high up the agenda in terms of investment. We need to think about how that investment is best directed and what its priorities should be.

As we have heard, the report raises important issues about the private, voluntary and independent sectors—PVI. A concern is expressed, which we have heard from other noble Lords, about the level and quality of the staffing in the PVI sector. It employs fewer graduates and, because of its budgetary constraints, it has lower pay levels. So there is a concern about a sector that the report recognises will continue to be the majority provider of childcare and early education. How this sector is nurtured and given the right opportunities to come up to standard are important issues, as is how what it brings can be recognised even if it is not shown forth in terms of graduate entry and qualified professional staff.

I want to look two aspects of the PVI: one is the role of local authorities and the other is the role of the sector itself. The report recommends that the Government review how local authorities discharge their duties in respect of funding free early education places in the PVI sector. It recognises that many local authorities pay less to PVI settings than they do to the maintained settings—so the setting that is taking the bulk of the strain, especially in needy areas, is underinvested. The report points that out very clearly.

The Childcare Act 2006 requires local authorities in England and Wales to provide sufficient childcare for working parents. This year, only 43% of councils in England have provided enough childcare. Last year, the figure was 54%, so that is quite a dramatic fall in the past year and it represents a trend that is going away from the aspiration of the report and of this debate.

Let me give your Lordships an example from my own background in Derby, where I serve. On Monday, the Derby Telegraph, our local paper, had an article about this issue. The headline was that parents have to pay for childcare that they should be getting free—a nice emotional pitch to get people interested. It showed that the Government give £4.51 per hour for three and four year-olds and £5.09 for two year-olds to local authorities, so the average per hour is £4.47. That is the average of what the Government are investing in local authorities. According to the report, in Derby this year, the city council is giving to school nurseries £3.64, which is well below the average. It is giving to pre-school and private nurseries £3.68 per hour, which again is dramatically below the average. By contrast, to council nurseries, the grant is £5.60 per hour, which is well above the national average. I would be interested if the Minister wanted to comment on that kind of pattern of distribution.

The report in the paper says that the local council will not comment on how the amount that it gives to providers is decided. So I want to flag up some questions for the Minister. Should there not be transparency for government, who are putting in the money, and for electors about the criteria and the policy priorities of local authorities?

Secondly, should local authorities consider childcare provision as part of a wider strategy for local economic development and child poverty reduction? Should it be a main theme of a public strategy? Finally under this heading, is there another way? Should the money go direct to parents and not via local authorities? I would be interested if the Minister had any comment on that route if there is such uneven distribution that seems to penalise the very sector that carries the bulk of the weight of this project and that suffers from underinvestment.

I have a brief comment on the fact that maternal employment, it was found, contributes positively to child development and parental health and well-being. There is a problem of a gap that I am not sure the report highlighted. If we take seriously the point of the noble Lord, Lord Sutherland, about how in our beginnings are our endings, we need to recognise that gap. I have a daughter, Lizzie, and she now has a daughter, Lila. When Lila was born, my daughter wanted to go back to work. Of course, there is little provision for very small children. Also, obviously, the staffing ratios for very small children are quite high because of the degree of care needed, so it is very expensive. My daughter tells me she paid £1,000 a month for that kind of childcare. She had the kind of job where she could pay that—I do not think it was a hint to me to pay it; she was happy to pay it. However, that clearly disadvantages people who do not earn that kind of money and so will not take an early advantage of continuing their career. We saw amazingly positive benefits in such a small child as Lila being socialised in a nursery environment from a very early age. It seems that if our beginnings are our endings, we have to look at the very beginning—those early stages—and how that can be properly invested in. There are comments in the various manifestos about bringing down the age in which we invest in childcare and early education but it would be interesting if the Minister could comment on what I perceive as a gap in our beginnings.

I will say a little about the wider learning environment in the private, voluntary and independent sector that is so crucial to child development, early education and parental well-being. We probably realise in this House that 60% of Church of England churches offer parent and toddler groups. Those are very important spaces in communities for parents—especially new parents—and small children. They are largely free, run by volunteers and based on commitment from local people and local networking. The one that my granddaughter Lila goes to is actually the hub of the community and all kinds of networking, producing what we would call social capital: goodness and grace in the community. That is a very important investment alongside the individual benefits that young children get in their own learning plans and development. There is a social element to education that feeds and grows community. We need to look at how we invest in that and how it can be encouraged.

Some 76% of Church of England churches run activities in local schools. In quite a needy part of the diocese where I work, in the former mining district of Shirland, we have a thing called the Shine After School Club. Again, that creates a new learning opportunity for parents, children and members of the community which adds enormous value to the state provision. When we look at the PVI sector, we must look at what it offers through not just graduate-level formal learning opportunities that Ofsted can monitor but also those soft things about socialisation, support, play skills, community networking and being out of home for children, mothers and parents in a different environment. Those things are very important for our community well-being as well as the well-being of individual families and people. Home and community are important sites of learning alongside the formal places with a syllabus that can be measured.

I finish with two more questions for the Minister. How can the strategy of the Government and the helpful questions asked by this report encourage local authorities to engage with the PVI sector creatively and to invest in it fairly? How can there be better integration between the measurable benefits of individual progress, early education and childcare and parents getting back into work, and the softer benefits that are so important for the health of society in terms of the work that mother and toddler groups, after-school and all such activities do? That is not the Government’s responsibility, but how can they encourage that to be recognised as a valuable part of the mix for the future?

Photo of The Earl of Dundee The Earl of Dundee Conservative 4:55 pm, 18th March 2015

My Lords, I join others in thanking the noble Lord, Lord Sutherland, for introducing this debate on affordable childcare. I should like to refer to a few aspects of the current arrangements. There are the so-called trade-offs: how children’s early learning and their parents’ employment prospects may or may not be jointly promoted. Then there is the scope for simplified presentations and procedures to achieve greater take-up. There is also the need to enhance quality and narrow the gap between public and private delivery. Not least, there is the importance of proper assessments and evidence.

As several noble Lords have reminded us, the Select Committee’s report acknowledges that government policy implies trade-offs even if it does not stipulate them: on the one hand to promote child development while at the same time to facilitate parental employment. For example, cheap, low-quality childcare might help parents to work but it would fall short of the Government’s child development objectives. Does my noble friend agree that there is an inherent tension between those two objectives? Will the Government clarify how the competing aims of the policy are prioritised and what mechanisms exist between government departments to address necessary trade-offs?

As the noble Lord, Lord Sutherland, implied, it appears that take-up of the schemes might rise significantly as a result of better procedures and presentations. We are told that measures are planned for this autumn to simplify childcare accounts. However, their envisaged scope may not advantage all income groups of parents. Perhaps my noble friend would, therefore, adjust and extend the proposed arrangements so that all parents benefit.

Then there is the quality gap in delivery between the public and private sectors, where the latter produces less good results. Regarding PVIs, the Select Committee recommends that they ought to be more fully reimbursed than they are. As my noble friends Lady Shephard and Lady Walmsley have already observed, staff qualifications should be more thoroughly scrutinised in the first place. Does my noble friend concur that those two expedients alone, if adopted, would help to narrow the current quality delivery gap between the public and private sectors?

Early learning offers for two and three-year olds began here in the late 1990s. Since then, however, there have been no systematic assessments. As result, there is still insufficient evidence of efficacy. Does my noble friend agree? What plans are there to put that right?

We should certainly begin with analysis of our own performance, but it is also very useful to know how other states may have built up good practice. The United States, not least, has a good record in this field. Should not the Government thus also study results from there and elsewhere?

Apart from comparisons with other states, does my noble friend accept that there are a number of well evidenced and creative interventions of which we should also take proper note? Such include the teaching of music, which has proved to be of inestimable value when introduced in the right way to early learners.

For encouraging confidence and ability at the start of life, this subject is clearly of key importance; and one in which the United Kingdom is well placed to succeed. However, we may all believe that a number of adjustments suggested by your Lordships today are urgently called for. Meanwhile, we are very fortunate to be guided by the excellent report of the Select Committee.

Photo of Baroness Tyler of Enfield Baroness Tyler of Enfield Liberal Democrat 4:59 pm, 18th March 2015

My Lords, it was a great pleasure and privilege to serve as a member of the Select Committee on Affordable Childcare under the sterling leadership of the noble Lord, Lord Sutherland. I am proud that we have produced a report that prioritises the needs of the most disadvantaged children. That is going to be the main thrust of my comments this afternoon.

Childcare policy has always had to grapple with multiple aims: improving child development, narrowing the gap between the most and least disadvantaged, allowing parents to work, and possibly others as well. As someone who has long advocated early intervention as a way of improving social mobility, I am pleased that the report highlights so clearly the objective of narrowing the attainment gap. This recognises the tremendous potential of early education to enable children from disadvantaged backgrounds to achieve their full potential and to break the cycle of inter- generational poverty and disadvantage.

Although I am sure it will not have failed to grab noble Lords’ attention that the title of the report is Affordable Childcare, the committee rightly took the view that childcare can be said to be truly affordable only if it gives both parents and the state value for money. The evidence we received suggests that existing spending on early education is not as effective as it could be in narrowing the attainment gap. The Nuffield Foundation’s recent Early Years Education and Childcare report finds that the effects of the 15 hours of free early education provided to three and four year-olds and the most disadvantaged children has been relatively modest so far. The free entitlement provision currently provided has very welcome but short-term effects on disadvantaged children’s cognitive development, but these effects largely disappear by the time the child starts primary school.

As so many noble Lords have already said in today’s debate, this is a long way from the potential of high-quality early education. Large-scale studies in the UK and abroad have demonstrated that early education has a dramatic and positive effect on everything from GCSE attainment, likelihood of attending university and lifetime earnings to the likelihood of having a criminal conviction. Moreover, they show that these effects are larger for disadvantaged children. By age three, disadvantaged children are nearly a year behind in intellectual development compared with their more advantaged peers. Early education offers precisely the chance for us to rectify these inequalities before they grow larger still.

It is true, as we have already heard this afternoon, that if it is not combined with a good home-learning environment, the effects of early education can be limited. As Professor Cathy Nutbrown, author of the Nutbrown review on childcare qualifications, memorably said: “The 15 hours”—of free entitlement—

“cannot make up for all the other hours in the week”.

Although the committee recognised that early education alone cannot remedy the many forms of disadvantage that children from low-income families face, good-quality early education can have an impact far beyond the classroom. As the noble Baroness, Lady Massey, said, the committee heard that the best childcare centres not only provided quality sessions in the classroom but acted as a resource for parents. These childcare providers worked closely with parents, sometimes making home visits and building partnerships, to ensure that the beneficial aspects of early education could be sustained in the home.

However, as the report makes clear, this is not the sort of childcare that most children are currently receiving. Childcare in the UK is provided through a mixed model that we have already heard about this afternoon and which can sound rather complicated and jargony. In what is called “maintained settings”—that is, nursery classes in primary schools, nursery schools and some children’s centres—childcare is provided directly by the state, while others are provided through the private, voluntary, and informal sector, which other noble Lords have already referred to as the PVI sector.

Some 60% of three year-olds and 96% of disadvantaged two year-olds accessing free early years entitlement do so through the PVI sector. Although the maintained settings in disadvantaged areas were found to be equal or better in quality than their counterparts in more advantaged areas—a point already made by my noble friend Lady Walmsley—the obverse is true in the PVI settings, where those serving disadvantaged areas were of markedly lower quality compared with PVI settings in advantaged areas. The committee was rightly at pains to emphasise that there is good provision in the PVI sector. However, the evidence also showed that they were less effective at providing precisely the aspects of childcare that we know to be most important to a child’s development, which are high-quality interactions with staff and support for the child’s language and learning.

This is in part a matter of qualifications. Although the PVI sector is steadily improving, its lower quality reflects the remnants of a time when childcare focused primarily on quantity rather than quality. As a consequence, PVI settings have more lenient qualification requirements, and staff in PVI settings serving disadvantaged areas have particularly low levels of qualifications. For example, just 5% of paid staff in PVI daycare settings hold qualified teacher status. Echoing the recommendations of the Select Committee report, I urge the Government—both this Government and the next—once again to consider implementing the recommendations of the Nutbrown review to help support the sector in raising qualifications over time. Can the Minister give us any hope on this point?

At the same time, it is clear from the evidence that local authorities have not been able to ensure that PVI settings providing the early education entitlement are sufficiently funded, which clearly places them at a disadvantage compared to the maintained setting. My noble friend Lady Walmsley has already made the point that the playing field is certainly not level in the early years. The Select Committee heard numerous stories of PVI settings operating at a loss or cross-subsidising free hours with paid hours in order to make ends meet. Underfunding early education settings is a false economy; the data have demonstrated that early education rectifies social inequalities only if it is of sufficiently high quality. I strongly support the report’s call to end the underfunding of free entitlement hours and to tie funding to indicators of quality. The Government must ensure that the PVI sector has the resources it needs to improve if early education is to be an instrument of social mobility, as I wish.

There is good news, as the report makes clear. My noble friend Lady Shephard has already alluded to the fact that we have a ready-made tool to hand. I have previously strongly welcomed the extension of the pupil premium to early education. Starting next month, the early years pupil premium will give additional funding to settings that care for disadvantaged children so that they have the resources they need to provide high-quality care. This is an excellent development for which the Government deserve real credit.

The flipside of how the two sectors operate is that while the maintained sector tends to be of higher quality than the PVI sector, it also tends to lack flexibility. This is a point in which the committee was very interested. It is problematic, as for early education to have the impact I have described, it must be accessible for disadvantaged families. Lower-income parents are more likely to work anti-social or odd hours, and single-parent families, which are more likely to be impoverished, are particularly in need of flexibility. Though take-up of the early education offer has been very high, the minority who fail to take up the offer are some of the most disadvantaged families, and this lack of flexibility in maintained settings is part of the explanation.

For single parents, lack of flexible childcare can be a major obstacle to work. The charity Gingerbread found that childcare was an obstacle to working for all but 11% of single parents surveyed. In fact, more than a third of single parents had to use care from three or more providers. Too often, the complicated patchwork of childcare that single parents had to navigate meant that they had to trade down, as they put it, to less lucrative jobs or reduce the hours that they worked. As the committee found, the steep taper on subsidies for childcare means that even if single parents were able to work more hours, all or most of their additional income would go towards meeting childcare costs.

The situation need not be so bleak. The Select Committee was heartened to hear of instances where schools and PVI providers formed collaborative arrangements or partnerships to provide parents with flexible and high-quality childcare. Children receive high-quality early education in a school setting and wraparound care in the PVI setting. Even if schools do not have the capacity to expand the number of early education places they offer, they can still make sure the places that they offer are accessible to parents working anti-social or odd hours. I hope that such instances of collaboration can be replicated throughout the country. What steps do the Government plan to take to encourage this?

Finally, too often childcare is entirely inaccessible to disabled children. According to a survey by the recent parliamentary inquiry into childcare for disabled children, 41% of parents reported that their children did not access the full 15 hours of free entitlement, meaning that the early education offer is failing to reach some of the children who most need it. Just 11% of local authorities report having sufficient provision for disabled children. Even when childcare is available for disabled children, it can often be exorbitantly expensive. As we have already heard, an alliance of childcare and disability organisations reported that families of disabled children pay eight times more in childcare costs than do other families. Given this, it is clear that the current cap on costs that can be claimed back is set too low. What steps are the Government considering taking to help those families?

I end by repeating my thanks to the noble Lord, Lord Sutherland, to other committee members for such stimulating and at times vigorous discussions, to our professional advisers, and to the excellent committee staff.

Photo of The Earl of Listowel The Earl of Listowel Crossbench 5:10 pm, 18th March 2015

My Lords, to follow up on the point made by the noble Baroness, Lady Tyler, I have spoken with parents who have been looking for childcare for their disabled child, and they can look through many providers before they eventually find someone who can. These providers are not exceptional, in that they are not that different from any other provider; it is just that they are prepared to go the extra mile to accept the family with disability and have the professional confidence to do so. I hope that that question will be answered.

I, too, thank my noble friend Lord Sutherland of Houndwood for calling and securing this debate. He said,

“In my beginning is my end”,

quoting TS Eliot. Some of your Lordships may have seen the headlines in both the Times and the Telegraph today that say that prolonged breast-feeding in childhood results in higher income as an adult. It points out that a longitudinal study from Brazil says that not only is IQ several points higher as an adult if one has prolonged experience of breast-feeding as an infant, but one’s income is increased as an adult. The study looks across all social classes, so it eliminates that particular factor. So truly it is true that in my beginning is my end. That is why I am so grateful to the chairman of the committee and the members of the Select Committee for producing the report that we are discussing today.

I would like to concentrate on the question of raising the status of childminders, nursery workers and nursery managers and all those early years professionals working in this area. I agree with all that has been said—that it is vital to provide high-quality provision for children and families. I would like to ask the Government to think about doing what they have done so successfully for teaching and social work and spreading that to the early years workforce. I know that important steps have already been made in that workforce. I praise this Government and the previous one for what they have done for teachers, in raising salaries and introducing Teach First, recruiting the best graduates, attracting them into the profession and finding very often that they stay there. In social work in recent years, they have introduced newly qualified status so that newly qualified practitioners get additional support, they have introduced the College of Social Work so that there is an institution that champions the profession and they have introduced a Chief Social Worker for Children and Families and a Chief Social Worker for Adults to be expert, powerful advocates who are involved closely in forming policy in the area of social care. So there is a good example in both those cases, which I hope might be applied to early years professions.

I first worked with children in the 1980s. However, my childcare work did not comprise early years provision. In the late 1980s, I worked with 10, 11 and 12 year-olds. I turned up, said I wanted to do the job and I was given a gaggle of children to look after. Their parents gave me some money and I took them ice-skating, swimming or whatever. There was no supervision or training. That situation has changed over time to some degree, but even now insufficient training and support is given to people working in that area of childcare. That was my first experience of childcare work, and it struck me as a very laissez-faire, low-status profession.

By contrast, one of the jobs undertaken by staff at a children’s centre I visited recently was to help three young women communicate effectively. They were native English women but their English was so difficult to understand that they had to be taught how to speak English in a way that most people would understand. I do not wish to be unkind and I am very grateful for the work that early years professionals do in early years settings, but I think it is recognised that it is generally a low-paid, low-status profession and that those entering it often have very low educational qualifications. I do not think that is right given the importance that this report places on high-quality childcare.

Over a number of years I have looked at services provided for vulnerable young people. I have visited the continent and met practitioners there. I was struck by the key cultural difference between them and us—namely, the higher status of social workers, teachers and foster carers on the continent. I visited Denmark a while ago to look at the children’s homes there. On the flight back, I, and the group of parliamentarians I was with, fell into discussion with my neighbour, a young woman of 21, who told us that she was an early years worker. She was a Danish social pedagogue who spoke fluent English. She had an interesting, thick novel beside her and was not at all fazed by speaking to a group of parliamentarians. Her father and mother were both early years professionals and social pedagogues. She was visiting England with a group of fellow students to do some postgraduate studies—of a kind that we do not have in this country—visiting archaeological sites around York that relate to Denmark. I was struck by this young woman’s high level of education, her confidence and by the cultural difference between the Danish approach to this area and what I have experienced in England.

An English practitioner in this field, whom I have known for some time and who was educated at either Oxford or Cambridge, practised for several years as an accountant and eventually became the manager of a private nursery. It has been a delight to speak to her about her practice over the years and a pleasure to observe the thought that she puts into her work. I know that many other managers give that depth of thought to their work, but we need to raise the status of early years work and attract more people with the very best education and life experience into the profession so that we can deliver the high-quality provision that our children need.

A very important point, which I do not think has not been mentioned today, concerns that of having a key person in the nursery. My understanding of the most important principle underpinning early years care is that whoever is providing the care is providing a bridge relationship for children while the parents are absent. So when the parent hands the child over to the key person in the nursery or the childminder, the parent communicates to that person what has happened at home that night and how the child is feeling. Then, during the course of the day, the key person in the nursery or childminder watches the child and hands them back to the parent, saying, “This is how your child is today; this is what he has been eating”, and will relate any particular issues. They keep the child in mind and the relationship with the child is maintained. What is most worrisome and needs to be thought about is that that kind of relationship must not be undermined. I am not sure that this has been highlighted.

When we are thinking about settings, particularly group settings such as nurseries, we should therefore think closely about staff turnover. I was pleased to hear all that has been said about the value of maintained nursery provision. What struck me when considering turnover of staff and the various types of provision was that, on average, maintained nursery provision had low staff turnover of 3% or 4%. However, in some other types of provision, such as PVI provision, turnover increases to 14% or 15%. The higher the level of staff turnover, the more difficult it is to foster and maintain those important relationships, and we are becoming increasingly aware of how important those relationships are.

On another matter, I was concerned to hear what the noble Baroness, Lady Shephard, said about a third of provision for two year-olds not being classified as good. That issue definitely needs to be addressed and many of us have been speaking about that.

The noble Baroness, Lady Massey, talked about the importance of engaging parents. At a recent meeting to talk about working with parents, particular concern was expressed about fathers becoming disengaged from their families. According to the OECD, we are going to overtake the United States fairly shortly in terms of the number of boys and girls growing up without a father in the home and probably with no relationship with their father. It is important that we do all we can in this country to try and keep fathers involved with their families. It was therefore disappointing to hear from a practitioner from a children’s centre that Ofsted has stopped looking at how effective children’s centres are at engaging with fathers. She said, “All the work we do in terms of, for example, writing letters to attract fathers is not regarded by Ofsted because it is no longer measured or considered to be important”. That was only one practitioner, but I should be grateful to hear from the Minister whether that is indeed the case. Perhaps she can write to me. Has Ofsted stopped looking at how effective children’s centres are at engaging with fathers? If that is the case, I hope that the Government, or the next Government, will do something about it.

Again I am grateful to the chairman and members of the Select Committee for this important report. I am also grateful to the Government for all that they have done to raise the status of teachers and social workers, and I hope that the next Government can apply some of the principles and practices that have been so successful in those areas further to early years provision. I look forward to the noble Baroness the Minister’s response.

Photo of Baroness Jones of Whitchurch Baroness Jones of Whitchurch Shadow Spokesperson (Education) 5:23 pm, 18th March 2015

My Lords, I am grateful to the noble Lord, Lord Sutherland, for introducing his report with such clarity and authority. I am only sorry that I have not been able to bring my own poem along, but I was very impressed with his. Perhaps that is something we should aim to do in future debates; I rather like the idea.

I also thank all members of the committee for contributing to this excellent report, which is a shining example of our new Select Committee system at work. I very much hope that the evidence and arguments in the report can provide a backdrop to many of our debates about childcare in the future, because the report is certainly a useful resource for us.

One of the key lessons underpinning the report, and which has been echoed by a number of noble Lords, was the lack of sufficient independently verified evidence—particularly on the impact of demand-led measures on employment and earnings. I share the committee’s frustration that the Treasury refused to engage with the inquiry, and I was pleased to hear that that is being followed up. This need for evidence-based policies is something that we take very seriously and which would be at the heart of our policy initiatives in government.

We are also very much aware that the core issue of affordability of childcare is central to a wider cost of living crisis, where family budgets are being squeezed, wages have fallen behind prices and many people who want to work full-time cannot get full-time work. Specifically, the evidence shows that working families with children and one-earner families have been the hardest hit by the Government’s tax benefit changes since 2010. For example, by the general election a family where both parents work will be £2,073 worse off; a family with only one person working will be a staggering £3,720 worse off; and a family where no parents work will be £2,114 worse off. If we add that to the spiralling cost of childcare, which has risen by some 31% since 2010, we can see why this remains an area of policy crisis.

In that context, I raise some issues and challenges that more specifically arise from the report. First, I would have liked the report to drill down a little more into why the costs of childcare have risen more than inflation. We need to understand and fix the funding delivery mechanism, so that any future childcare subsidies do not simply fuel additional costs in the sector. As we heard, the report identified that the private, voluntary and independent sectors are running the free early years places at a loss. Indeed, parents are cross-subsidising the free places, either for themselves or for others. Clearly this is unsustainable in the longer term.

If this is as a result of the way the Government allocate money to local authorities via the dedicated school grants, without sufficient levers to ensure that the money is used for the purpose for which it was originally intended, we need to surface that, address it and face up to it. We all know that local authority budgets have been cruelly cut year on year and that they constantly have to juggle priorities, but if there is a national directive from the centre that, for example, 15 hours of childcare should be provided free to all three and four year-olds, sufficient funds should be allocated, nationally and locally, to make sure that that happens. I therefore agree with the committee that the way local authorities discharge their duties under the free childcare funding formula needs to be reviewed, but equally we need to address the Government’s culpabilities in designing a funding system that, at the moment, seems destined to fail.

The other side of this equation is whether there are, or could be, sufficient places available to provide for this new demand. The noble Lord, Lord Sutherland, referred to places increasing considerably in the past. However, the latest Ofsted report on the number of registered childcare places in England, region by region, shows an overall fall of some 40,000 places between

September 2009 and August 2014, and a recent FoI survey found that nearly half of councils—some 44%—said that they would not have enough places to meet the latest offer from the Government of places for disadvantaged two year-olds. This is backed up by the recent report of the British Association for Early Childhood Education, which claimed that there are now 49 local authorities in England without a single maintained nursery school.

Meanwhile, the Government’s plan to expand nursery places on school premises, which I think we would all welcome, is in danger of being scuppered by the upcoming baby boom, which is already putting pressure on primary school accommodation, with increasing numbers of children being taught in overcrowded classrooms and temporary accommodation. We are left to fall back on the poorer-quality provision in the private, voluntary and independent sectors, but as we have seen and heard today, the market has not responded to fill that gap in childcare places as it is not seen as being sufficiently profitable, so that shortfall remains. I ask the Minister where the extra places will come from. I look forward to her response in that regard.

Of course, one area where the Government have shown a considerable lack of concern for early years development is the collapse of the Sure Start network. Not only have 700 children’s centres around the country been allowed to close but an increasing number stand empty for much of the time due to reduced opening hours and cuts to services.

In Swindon, for example, at the end of the month the Conservative council is closing nine out of 14 Sure Start centres, despite calls to delay the decision until after the election. Centres such as these would benefit from our policy to open up children’s centres to offer childcare and would help them fulfil their role as hubs for family services in the community. The charity 4Children estimates that this could lead to at least an extra 50,000 places being delivered into the sector. Perhaps the Minister could remind us why the Sure Start network has been allowed to decline under this Government’s stewardship, and say whether she endorses our policy of using the premises to fill the childcare places gap.

We absolutely endorse the Select Committee’s view that parents face a nightmare of complexity and confusion in navigating the childcare payments systems. As we have heard, it is not immediately clear which route will leave them better off, nor which will make the payments in a timely manner, particularly for those people who do not have permanent and reliable employment. What is worse is that, once again, there is evidence that the parents of children who might benefit most from free childcare are not accessing that payment system. I do not think that anyone can say with confidence that universal credit will be delivered on time and on budget. That is why we believe in simplifying and streamlining the childcare payments entitlement—to ensure that it is accessed by those who need it most.

We are committed to building on the existing 15 hours’ free entitlement for three and four year-olds by offering an extra 10 hours’ free childcare for working parents. This will be supplemented by a primary childcare guarantee of access to childcare through the school from 8 am to 6 pm. We have already spelt out how this will be funded, but the important point is that it will be delivered by investing directly in the extra free childcare places. The value of this extra childcare support is more than £1,500 per child per year. We believe that focusing on supply-side provision—much as we did when we set up the Sure Start system years ago—is the best way of driving up quality and reaching out to the most disadvantaged families who need these facilities the most.

Finally, I should like to say something about quality. The report highlights the need to drive up standards and we absolutely endorse that concern. Of course, the Government demonstrated their complete lack of understanding of child welfare and development when they tried, unsuccessfully, to drive up the ratios between children and staff. Thankfully, those proposals have been put on ice but there remains a suspicion that they might be bought back into play as a short-term fix for the lack of childcare places in the system in the future. I hope that the Minister can reassure us that that will not be the case.

Meanwhile, we are committed to a holistic nought to five year-old strategy that builds on the now substantial evidence that early intervention and quality early years childcare are crucial in determining a child’s successes in life. A number of noble Lords have made that point in different ways. We have already announced our plans to protect the early intervention grant and I would be grateful if the noble Baroness could clarify whether both the coalition partners would do likewise. The next stage has to be to build on Cathy Nutbrown’s excellent work on training and qualifications for early years practitioners. Again, a number of noble Lords have made reference to this, and I should be grateful if the noble Baroness could update us on the Government’s steps in addressing and implementing her proposals.

The report, quite rightly, identifies the difference that high-quality staff can make to child outcomes. We need to work with Ofsted and the FE and HE sectors to provide better professional training packages that provide a well rewarded career for life in a sector sadly blighted by low pay. I agree that we need to find more imaginative ways of attracting people into, and keeping them in, the sector. We also need to find new and innovative ways of attracting those who have had a career break back into the sector, to help boost the availability of professional staff. Perhaps the Minister could share with us the Government’s proposals for improving staff quality, training and attracting new entrants into the sector.

This is an excellent report and we have had a fascinating and forthright debate. I do not feel that I have had time to do justice to all the issues that we have surfaced today. However, as I said at the outset, I think the report will prove to be a handbook and compass for future debates and policy developments, and I am grateful again to all those who made it happen. Meanwhile, I look forward to hearing the Minister’s response.

Photo of Baroness Garden of Frognal Baroness Garden of Frognal Lords Spokesperson (Women & Equalities), Baroness in Waiting (HM Household) (Whip) 5:35 pm, 18th March 2015

My Lords, I, too, thank the noble Lord, Lord Sutherland, for securing this important debate and for his eloquent speech in introducing it, and the touch of poetry which set us all off on the right note. I am grateful also to noble Lords for their contributions. So, I take this opportunity to thank the noble Lord, Lord Sutherland, and the other members of the Select Committee for the report they have produced. It is a timely and comprehensive report, and something that, as noble Lords acknowledge, the next Government will want to consider in full.

As far as the coalition Government are concerned, we end this Parliament with the same commitment we had at its start—to support all parents to access affordable, quality childcare. That is why, by the end of this Parliament, and despite the challenging economic climate, we will have increased our annual spending on childcare by £1 billion. I hope that the noble Baroness, Lady Jones, will acknowledge that progress has been made by the coalition Government. However, of course we are not complacent and, as the Select Committee’s report acknowledges, challenges remain.

We know that good quality early years provision, especially from age two upwards, has positive benefits on children’s all-round attainment and behaviour, particularly for disadvantaged children. We know, too, that these last all the way through to GCSE and future earnings. Evidence strongly supports this. Recognising that early education matters, we have increased the free early education entitlement for all three and four year-olds to 15 hours. This is an increase on the 12.5 hours introduced by the previous Government which, as well as benefiting children, also helps their parents with the cost of childcare.

My noble friends Lady Shephard, Lady Tyler and Lord Dundee, talked about the evidence of the benefits of early learning for two, three and four year-olds. We are certainly obtaining further evidence from our new study in early education and developments, as acknowledged in the report. The noble Lords, Lord Sutherland and Lord Patel, were among those who also spoke on this subject, and about the cost of childcare. We have increased the child element of tax credits to a maximum of up to £2,780 for families with one child, which is £480 more a year than at the election, and above inflation by £15. The cost of childcare undoubtedly acts as a financial disincentive to work and we know that government support helps to remove or lower those barriers. As my noble friend Lady Tyler pointed out, there is a real need for flexibility in childcare to enable people to access childcare so that they can go back to work and access employment. The other provision is for the benefit of the children themselves.

We are introducing tax-free childcare, which will be accessible to many more families than the current employer-supported childcare scheme. Up to 1.8 million families could benefit by up to £2,000 per child per year, which is also available to self-employed parents. The tax-free childcare extension was mentioned by the right reverend Prelate the Bishop of Derby and my noble friend Lord Dundee. The point about extending the scope further is that it is passed to relevant ministerial colleagues. It is important to have cross-departmental dialogue on these matters. The right reverend Prelate mentioned giving money directly to parents. We do this through tax credits and/or the new tax-free childcare scheme, which will put money in the pockets of parents, enabling them to choose the childcare that suits them. The right reverend Prelate also spoke of the church community provision which again plays a valuable part in this area.

The noble Baroness, Lady Massey, and my noble friend Lady Shephard mentioned the targeting of services in deprived areas. Schools, of course, provide an important part of the solution in more deprived areas, and the department is doing more to make it easier for schools to open and expand their nursery provision. We recognise, however, that our poorest children are less likely to take part and benefit from early years education. We remain concerned that children from poorer backgrounds continue to start school behind their richer peers. That is why we introduced the new entitlement to early education for around the 40% of the most disadvantaged two year-olds which aims to address the gap. Already more than 150,000 children are benefiting from this.

Alongside investing in places for eligible two year-olds we have made £100 million of capital expenditure available to support the introduction of this programme. This has created up to 67,000 new nursery places for two year-olds. As my noble friends Lady Walmsley and Lady Tyler alluded to, from April we are extending the pupil premium into the early years, which will provide an additional £50 million to support three and four year-old children from disadvantaged backgrounds. This should help to close the gap between children from such backgrounds and their peers by supporting providers to raise the quality of their provision.

My noble friend Lady Tyler and the noble Earl, Lord Listowel, mentioned support for children with disabilities. The Government are committed to supporting families with disabled children. Our vision for young children with disabilities is the same as for all children—that they achieve well in their early years, at school and college and lead contented and fulfilled lives. Our special educational needs and disabilities reforms through the local offer and independent advice make it clear that help is available to children with SEND. Local authorities must now offer joined-up help at the earliest possible point without false distinctions between education, health and care. We have also invested £30 million in independent supporters to help families applying for an education, health and care plan.

Children with disabilities aged two, three and four are able to benefit from 15 hours of free childcare through the early years entitlement. Linked with this, local authorities have the flexibility within their direct schools grant funding to provide additional resources and support for those children who need it—for example, to provide a young child with additional one-to-one support. The noble Earl, Lord Listowel, mentioned the importance of children being handed over from parent to carer through early years care.

Universal credit and tax credits also provide more generous support for children. The disabled child addition in universal credit provides extra support to low-income families with a disabled child. This is worth more than £4,300 per year. We have recently announced that tax-free childcare will allow parents of disabled children to receive a government top-up of £4,000 a year, twice that for other families. This support will be provided until the age of 17.

We are trying to take a number of measures to address the particular difficulties faced by families with disabled children. One of these is to influence the shape of local services at a strategic level and so we have increased funding for parent/carer forums from £10,000 per forum in 2013-14 to £15,000 in 2014-15.

On collaboration and accountability, we are, as I said, encouraging more schools to offer nursery provision, either themselves or in partnership with officers. We expect this to help address the gap in participation and achievement between the poorest and others. We are supporting collaboration through investment of £5 million in teaching schools and by working with 4Children on the development of its childcare hubs. We are increasing accountability through the reception baseline, which schools will be able to use from September this year. This will provide a snapshot of children’s starting point in reception and means the progress that schools make with all children, including those from a lower starting point, will be recognised. The baseline will be the only way used to hold schools to account for progress from reception right through to key stage 2 from September 2016.

Many noble Lords mentioned the importance of high-quality provision. As the Select Committee’s report set out, we recognise the importance of the role of qualified staff in our early years settings. We know that the qualifications of the workforce directly impact on the quality of provision. It is therefore pleasing that the proportion of staff with level 3 qualifications continues to increase, as does the proportion qualified to at least degree level.

However, we continue to do more. That is why we have introduced the new early years teacher status and established more robust criteria for level 3 qualifications, the early years education criteria. We now have more than 14,000 early years specialist graduates who have been trained since 2007, more than 1,500 are currently in training and a further 540 high-quality graduates began training in September 2014. Moreover, we have extended Teach First to the early years.

We heard the noble Baroness, Lady Jones, my noble friends Lady Walmsley and Lord Dundee, the noble Lord, Lord Sutherland, and the right reverend Prelate the Bishop of Derby, as well as my noble friend Lady Tyler express their concerns about provision by the private, voluntary and independent sector and the maintained provision. We must acknowledge that the employment and deployment of staff of PVI settings is largely a matter for the settings themselves. The legal framework provided by the Early Years Foundation Stage sets the overall parameters in which settings must operate, but they can choose to exercise permitted flexibility to determine the qualifications expected of staff and how they are applied to children in their care. The right reverend Prelate the Bishop of Derby talked about transparency in funding and investment. The department publishes data on the rates each local authority pays its providers in a funding benchmarking tool. In terms of local authority investment in PVI settings, local authorities are able to use funding flexibilities to support such settings so as to ensure sufficient and quality childcare places. The EFYS enables settings employing a graduate to operate a higher staff to child ratio, which gives nurseries greater freedom to operate in ways that best meet their needs and the needs of the children in their care. In this way, a nursery can increase its income and investment in its staff, including by helping existing staff to improve their skills and qualifications.

My noble friends Lady Shephard and Lady Walmsley, the noble Baroness, Lady Massey, and the noble Earl, Lord Listowel, raised concerns about the quality of early years settings. On recent inspections, in August 2014, 80% of all active early years providers were rated good or outstanding by Ofsted, which compares with 69% in August 2010. For two year-old children, 85% attend a setting currently rated by Ofsted as good or outstanding.

A number of noble Lords mentioned the importance of the home learning environment because evidence tells us that a rich home learning environment in the early years has a substantial and measurable effect on a child’s achievement right through to the age of 11. What parents do with a child is more important than who they are; that it is more important than, say, parental occupation, education or income. Parents and families continue to be supported by children’s centres in a number of ways, both in relation to universal services and through targeted support for those facing the risk of poor outcomes. Independent data show that record numbers of parents and children are using children’s centres—in fact, more than 1 million. Family learning provision is also supported by the Government as part of community learning. Much of this is targeted towards the early years and takes place in children’s centres and schools. There is consistent evidence of the benefits of family learning for both parents and children. All of this helps to encourage a culture of learning in the family and equips parents to be more active in supporting their children’s intellectual, physical and emotional development. I certainly hope that music, as mentioned by my noble friend Lord Dundee, would be included.

The issues touched on in the Select Committee report also bring into scope other reforms and interventions being made by this Government, including more places and more provision. Here we have taken action to give more choice to parents, including the creation of childminder agencies and supporting schools to open nurseries and offer 8 am to 6 pm provision. The matter of flexibility was also raised by noble Lords.

The noble Lord, Lord Sutherland, the noble Baroness, Lady Massey, and my noble friend Lord Dundee all made reference to the fact that it can be very difficult for parents to navigate the various schemes available to support them. We are certainly taking action to address this, including by publishing draft guidance for parents on the universal credit scheme online for consultation and feedback with a promise of more comprehensive information to be made available closer to the date of rollout. However, I take the point that some of the ways in which these surveys are framed and how the forms are designed are not the easiest for people to access, and very often it is those who are most in need who find them most difficult to access. I am sure that more work will need to be done, including on the dialogue between the various departments to make sure that the DWP, HMRC and the DfE are talking to each other to make it as straightforward as possible for parents to access the provision that they need.

My noble friend Lady Walmsley mentioned academy freedoms. We are aware of some of the calls that she mentioned to extend academy freedoms down the age range, and it is something that the next Government will want to look at closely. It is currently on the table but has gone no further than that.

The noble Earl, Lord Listowel, asked whether Ofsted inspections included looking at the role of fathers. Ofsted and the Association of Directors of Children’s Services will be establishing a joint policy group to agree the revised approach and the timetable for implementation later in the year. I am sure, within that, they will wish to consider the role of fathers.

There have been a number of other contributions to this debate, which I will need to review and follow up in writing. A number of noble Lords mentioned the Nutbrown review, parts of which we have of course implemented and parts of which are under review.

In conclusion, I repeat that the Government are committed to supporting all parents in accessing affordable, quality childcare. We are committed to addressing the particular issues that face children from disadvantaged backgrounds and have introduced the key measures that I outlined—measures of which we can be proud—although we acknowledge there will always be more to be done in this area. I thank the noble Lord, Lord Sutherland, and the committee for such a thorough and insightful report. Its recommendations will be of great value to the next Government, and I thank all noble Lords for their contributions today.

Photo of Lord Sutherland of Houndwood Lord Sutherland of Houndwood Crossbench 5:51 pm, 18th March 2015

My Lords, I thank the Minister for her detailed and, in places, reassuring reply and look forward to further comment in due course. I also thank all noble Lords who took part in the debate, not least those who are not members of the committee. We appreciate their interest and their presence, and what they bring to us that we did not find on the committee. I also thank our special advisers, who were both excellent and complementary in how they worked together. Finally, along with committee members, who I have already mentioned, I thank the officials who guided us through the various pastures and, sometimes, the rapids of process. In fact, they are still doing so. I had a reminder note during the debate to say that as I spoke initially, I missed out a couple of key words. I referred to half the adult male population being either illiterate or innumerate—I missed out that it was half the adult population “in prison” who are either illiterate and innumerate, which is rather different.

One thing I have learnt in this debate, apart from the continuing care of the officials, is that, if you quote a line of poetry, you certainly get noticed. I commend it to those who introduce debates in future:

“In my beginning is my end”

Your Lordships will be pleased to know that my end is much shorter than my beginning.

Motion agreed.