The Parliamentary Under-Secretary of State for Education (Claire
Coutinho) With permission, Madam Deputy Speaker, I would like to
make a statement about the progress we have made towards delivering
the genuinely radical childcare reforms announced in the
Chancellor’s spring statement. The Chancellor announced that from
September 2025, working parents will be able to access 30 hours a
week of childcare, for 38 weeks a year, from the term after their
child turns nine...Request free trial
The Parliamentary Under-Secretary of State for Education ()
With permission, Madam Deputy Speaker, I would like to make a
statement about the progress we have made towards delivering the
genuinely radical childcare reforms announced in the Chancellor’s
spring statement.
The Chancellor announced that from September 2025, working
parents will be able to access 30 hours a week of childcare, for
38 weeks a year, from the term after their child turns nine
months to when they start school. I am pleased to announce that
from today, the Department for Work and Pensions has raised the
amount working parents on universal credit can claim for their
childcare to £951 a month for one child and £1,630 for two or
more children. That is an increase of roughly 50% from the
previous limits, which were £646 for one child or £1,108 for two
or more children.
The Government are also helping eligible parents to cover the
costs for the first month of childcare when they enter work or
increase their working hours. Those parents will now receive up
to 85% of the first month’s childcare costs back before next
month’s bills are due, meaning that from then on they should have
the money to pay for childcare one month in advance.
When I have spoken to families on universal credit, many have
told me that they have struggled with up-front childcare bills,
making it harder for them to get back into work. These childcare
reforms support one of the Prime Minister’s five key
priorities—to grow the economy—by giving families on universal
credit up to £522 extra each month to cover childcare costs. This
is a transformational package that is designed to remove as many
barriers to work as possible.
The evidence is clear: the earliest years, before a child goes to
school, are the most critical stage of a young child’s
development. That is when they are learning most rapidly, and
when the foundations are being laid for future success.
We are also committed to improving the availability of wraparound
childcare. Reliable wraparound childcare, before and after
school, helps parents to work and can offer children great
activities around the school day. The education and care provided
in childcare settings up and down the country is pivotal for
children. Visiting and talking to nurseries, childminders and
other providers is one of the best parts of my job. I wish to put
on record my thanks for the hard work and dedication of the
talented people who work in the sector.
I have travelled across the country visiting providers: from
Chestnuts Childcare in Shirebrook to Kids Inc in Crowthorne; from
Little Stars in Peterborough to Imagination Childcare in Moredon;
from Curious Caterpillars in Stroud to Playsteps Day Nursery in
Swindon; and from Bright Horizons in Didcot to Acorn Day Nursery
in Emberton. I thank my hon. Friends the Members for Peterborough
(), for Bolsover (), for Bracknell (), for North Swindon
(), for Stroud (), for Milton Keynes North
(), for Cities of London and
Westminster () and others for hosting me on
those visits. They all share my determination to get this right
for parents and providers.
When I am out on those visits, I often hear how much of a
lifeline the settings are for parents, allowing them to work and
develop their own careers, while providing the high-quality early
education that gives our youngest children the best start in
life.
I support the ambitious expansion of childcare support for
working parents that the Chancellor announced in his spring
statement. It represents the single biggest investment in
childcare this country has ever seen. It will make sure that
parents are able to access the high-quality, affordable childcare
that they need.
Today’s changes are just one part of our generally radical plans.
By 2028, we expect to be spending more than £8 billion per year
on early years education, which is double what we spend now. This
will build on the 30 hours of funded childcare for three to
four-year-olds that this Government introduced in 2017, extending
the entitlement to eligible working parents of children aged from
nine-months-old to when they start primary school. It will remove
one of the largest hurdles that working parents face, and it will
save parents £6,500 per year on average.
We have heard it loud and clear from the sector that getting the
funding right is crucial. From this September, we will provide
£204 million of extra funding for local authorities to increase
the hourly rates that they pay providers, and we will make sure
that rates continue to go up each year. That means that, from
September, the average hourly rate for two-year-olds will go from
£6 per hour to around £8 per hour, and the average rate for three
to four-year-olds will be over £5.50 per hour. From 2024-25, the
average rate for under-twos will be around £11 per hour. We will
confirm the September rates for each local authority before the
summer break. We will also ask the sector for its views on how we
should distribute the funding for the new entitlements from April
2024, including the rules that local authorities will have to
follow when distributing the funding to providers.
Of course, money is not everything. We also want to boost the
early years workforce, who are so crucial to the success of
nurseries across the country. There are multiple ways that we are
doing that. I have heard from many people who manage nurseries
that the way that we regulate staffing in settings is stopping
providers from making the most effective use of their staff and
giving their best people responsibilities that match their
abilities.
Likewise, childminders and nurseries have been telling us about
barriers to delivering the education and care that they want for
children. That is why we have launched a consultation on proposed
changes to the early years foundation stage requirements. Every
single one of our proposals has come from conversations with
people working in the sector. They will give settings more
flexibility and help address some of those barriers, while
maintaining high-quality provision and keeping our youngest
children safe. Indeed, 96% of childcare providers in England were
judged good or outstanding at their most recent inspection, which
should give parents huge confidence in the standards of
provision.
Some of the new measures will help free up staff to pursue
professional development opportunities. We are investing up to
£180 million in the early years education recovery programme,
which offers a package of training, qualifications, expert
guidance and targeted support for everyone working in the
sector.
To train people up, we need to get more people in, so we are also
going full steam ahead with a new national campaign early next
year to promote the sector and support the recruitment and
retention of talented staff. We will also consider how to
introduce new accelerated apprenticeship and degree
apprenticeship routes, so that new entrants can build careers at
all levels of the sector.
I wish to reassure Members that we will work closely with the
sector to deliver these historic reforms, just as we did on
previous successful roll-outs of the 30 hours entitlement for
three to four-year-olds, the 15 hours entitlement for
two-year-olds from disadvantaged backgrounds, and the holiday
activities and food programme. We cannot do this without early
years providers, childminders and local authorities. We have a
strong track record of working together to deliver childcare for
parents, and I will be listening closely to them when considering
our next steps.
Madam Deputy Speaker, I commend this statement to the House.
Madam Deputy Speaker ( )
I call the shadow Minister.
2.14pm
(Portsmouth South) (Lab)
I thank the Minister for advanced sight of her statement.
The Government’s realisation of the importance of childcare
remains striking, despite what the Minister says, for how long it
has taken. Childcare is important for so many reasons—for giving
every child the best start in life, for helping every parent to
take on and succeed at the jobs they love, and for the foundation
that it provides for success at school and throughout education.
Above all, as my hon. Friend the shadow Secretary of State for
Education has rightly said, childcare is important for supporting
families to achieve and thrive together. Yet it is only now that
the Government have arrived at the party. It is typical of this
Government that they are not only late but focused on tweaks that
they trumpet proudly but that do not deliver the scale of reform
that is urgently needed.
The reforms reflect some of the changes to universal credit that
the shadow Secretary of State for Work and Pensions has
repeatedly called for. But, as he has also warned Ministers, they
do not go far enough in giving people the chances and choices to
go back to work at the scale necessary to tackle the
challenges.
On childcare, the Government’s fixation on their broken hours
model leaves them blind to the wider challenges around supply and
demand of childcare and the extraordinary structure of the market
for extra hours. The failure of that market is felt by every
family. A decade of sticking-plaster politics from the
Conservative party has caused them pain. But the announcement
does nothing to ensure that childcare places are available in the
cities, towns, and villages of our country. In some places,
nursery and childcare spaces are outnumbered 10 to one by the
children who need them.
I am delighted that the Minister has visited the seats of so many
of her newest and presumably most nervous colleagues, but, as
well as talking to parents who have found childcare, she would
have done better had she spoken to parents who have not. The
announcement does little to deliver the extra staff who will be
needed to deliver the extra entitlements for parents that the
Minister so enthusiastically announces. It does nothing to
deliver the childcare places in which our children will be cared
for and in which, we hope, they will learn in those extra hours
and months of their lives. It is great to hear that the Minister
will be listening to providers and local authorities, but
listening is no substitute for action. It does little to retain
or upskill the existing staff in the sector who are leaving in
their droves for work that is more clearly valued. It does little
to enrich childcare, to drive up quality, to make it a part of
our education system, and to deliver a foundation for achievement
and success right through school and life. It does little to
deliver the flexibility that parents need not merely at work, but
to get into work—to get the training and skills that they need
and that our companies, communities and country need. In short,
the announcement today is little more than a post-dated cheque.
It is a promise of jam tomorrow—a promise that brings more
questions than answers.
Madam Deputy Speaker, let me briefly set out a few questions in
the hope that the Minister can address them in the debate today.
When the 30-hours childcare entitlement is spread over a year, it
is the equivalent of 22 hours a week. What steps is she taking,
right now, to address the cliff-edge in costs between the
Government-funded hours and the hours for which parents have to
pay? Will she repeal the restrictions that councils face in
making more childcare provision available? Is she genuinely
confident that a new advertising campaign will be enough to
attract workers to the sector? Is she aware that, for an increase
in entitlements to childcare places to work, there must be more
staff, and more settings, otherwise more parents will simply find
that they cannot get the childcare that they need and to which
they have entitlement? Finally, how does the Minister intend to
ensure better uptake of childcare entitlements among eligible
families given the complexity and bureaucracy of the existing
system?
I thank the hon. Gentleman for his reply. Let me address some of
the points that he raised in turn.
The hon. Gentleman talked about the ability of parents to look
for childcare in the holidays. We have the £200 million holiday
activities and food programme, which is particularly targeted at
disadvantaged children. Last summer, more than 600,000 children
accessed that. When we did our initial survey of that programme,
about 70% of those children said that they had never been to
anything like that before, which is a great sign of the
opportunity that it is spreading. He talks about the work that we
are doing with local authorities. To understand sufficiency and
any challenges, we are contacting every single local authority as
part of the roll-out.
The hon. Gentleman talked about getting more staff, and we have
set out some flexibilities; I talked in my statement about the
recruitment campaign we are doing next year. He talks about
better uptake, but I would say that the uptake of the offer for
three to four-year-olds is in the 90% range; for two-year-olds it
is in the 72% range and tax-free childcare in recent years has
gone from 172,000 up to 500,000. Yes, there is more to do, but we
have very good uptake and any parent thinking about more
childcare should look at our Childcare Choices website to see
what they might be entitled to.
Overall, however, I get the sense from the hon. Gentleman’s
comments that he did not listen to my statement. I talked about
the £4 billion extra that is going into the sector, about plans
for staff and for childminders and about routes for
apprenticeships. I remind him that it was a Conservative
Government that expanded the offer for three to four-year-olds
and introduced the offer for two-year-olds, and now it is the
Conservative Government making the single largest-ever investment
into childcare.
What do we know about the Labour party policy? We know the
Opposition wanted to do universal childcare, but they denied that
last week. That was last week’s flip-flop—or I should say one of
last week’s flip-flops. They have talked about means-testing
childcare, which would mean taking away childcare from
middle-class parents at a moment when we know that families are
struggling with their finances. On the Government side we
recognise that childcare is important for families and important
for growth. Our childcare plans, as announced at the Budget, were
called by the International Monetary Fund a serious point of
growth in this country. We recognise that that is important.
Madam Deputy Speaker ( )
I call the Chair of the Education Committee.
(Worcester) (Con)
I congratulate my hon. Friend on this important statement. I
agree with her and, more importantly, I agree with the Treasury
that childcare is worth investing in. I welcome the changes to
universal credit, which I think will make a significant
difference, but I particularly welcome the £204 million of extra
funding for local authorities to distribute to providers; from
what the Select Committee has heard from providers, that is
urgently needed. We need to make sure we have capacity in the
system to meet the challenge of providing all that additional
childcare for families. I urge her to make sure that as much of
that funding as possible is distributed, and to talk to local
authorities about ensuring they do not top-slice it too
aggressively. When the Government announced the £8 and £11 rates
for the younger years, we heard from childminders in particular
that they simply did not believe that they would receive that. We
want a system in which the providers on the frontline of
providing childcare get the funding that the Government
announce.
We have a rule at the moment that local authorities have to pass
on 95% of the funds that they receive, and our returns show that
they pass on 967%. However, as the years go on, with the amount
of extra money that we have put into the system, we can
definitely look at those figures and at what can be done. Some of
that will be set out in our consultation before the summer.
(West Lancashire) (Lab)
The Minister told us about several childcare providers that she
has spoken to, but she has clearly not spoken to Munchkins
Village Nursery in Burscough in my constituency. The nursery got
in touch with me to say that, while the help for parents is very
welcome, the Government have by their own admission underfunded
the sector to the tune of about one third of the funding
promised—about £2 billion—and the nursery staff believe that the
sector is in financial risk. Does the Minister appreciate that,
regardless of any funding for parents, they simply cannot find
the childcare that they need?
I recognise that it has been a challenging few years for the
sector. In this piece of work we have surveyed about 10,000
providers, we have a providers’ finance report and we have
surveyed about 6,000 parents, so we used a very data-driven
estimate to come up with the figure. We will be consulting on the
funding before the summer and, as I said, there will be funding
coming in September before any expansion of the entitlements,
which start in April next year. There will be additional money
next year and by 2027-28 we will be spending an additional £4
billion that will be distributed via local authorities to those
settings.
Dame (South Northamptonshire)
(Con)
I congratulate my hon. Friend on such an excellent statement
today—I think the shadow Minister needs to read it, because he
clearly did not listen to it.
My hon. Friend has clearly thought about the need for top-quality
childcare, which for many young children is vital when their home
life is perhaps not all it could be. One thing she has not talked
much about is the provision of new workforce. Can she comment a
bit more on her consultation on changing the requirement for
high-level qualifications to a requirement for qualifications
that are more appropriate to providing empathetic and supportive
care?
I know my right hon. Friend is incredibly passionate about this
area, and I share her passion. In the consultation we have set
out some flexibilities after talking to the sector; an example of
that would be relaxing some of the requirements around having
level 2 maths for level 3 qualifications, which we know has been
a barrier for some people. We are looking at all kinds of
flexibilities that mean we will get the right staff at every
stage to make sure that our children get the right education.
(Westmorland and Lonsdale) (LD)
The Minister would have been very welcome in the north of
England, particularly in Westmorland. This announcement is
welcome in many ways and will help many parents in my
constituency who cannot afford to work at the moment. It is a
good step forward. However, many childcare providers—probably the
majority in my constituency—are linked to the primary school in
that community, and primary schools have never faced such awful
financial circumstances as they do now. I have visited many
schools in Westmorland the last few weeks, from Appleby to
Windermere, from Kendal to Brough, from Shap to Witherslack and
many others. They all tell me that the deserved pay rises for
teachers and other staff are unfunded by Government and that
energy costs, which they have seen go through the roof, are also
largely unfunded, leaving many schools in deficit and having to
shed staff. All that undermines their ability to provide
childcare and other forms of education. What has the Minister to
say to our local schools in Westmorland, which are desperate for
her support so that they can carry on providing education and
childcare?
We are taking schools funding to a historic real-terms high. We
are also making the single largest ever investment in childcare.
I recognise that it has been a difficult time for public sector
services, and the most important thing we can do is to grip
inflation and make the pound go further, but overall we are
putting record funding into both areas.
(Wokingham) (Con)
We do need more childcare, and I wish the Minister every success
with these policies, but we are going to need a lot more people,
businesses and other institutions to come forward to provide that
care. Will the whole Government do more? Can we get rid of IR35,
a tax on the self-employed? Can we raise the value added tax
threshold for small business? We must look at making childcare
more worthwhile, because we need the teachers and the
childcarers.
I thank my right hon. Friend—I have just had a bit of a flashback
to my days as a Treasury Parliamentary Private Secretary. He is
absolutely right that the supply of childcare will be a really
important part of growth, as has been reiterated by the IMF and
others.
(Belfast South) (SDLP)
Progress in this area is very welcome and necessary, but parts of
the statement will be dispiriting for families in Northern
Ireland, as we fall even further behind. Can the Minister confirm
that Northern Ireland will receive commensurate funding through
the Barnett formula, and have she and her officials given any
thought to how the new regulations and resources might be applied
in Northern Ireland? Furthermore, given the extremely austere
budget settlement in Northern Ireland, does she acknowledge that
even where there are improvements in childcare, many children
will be going on to increasingly degraded and under-resourced
primary schools?
The money will be passed on in the normal way across the
education budget. We regularly meet Education Ministers from the
devolved Administrations, and the Secretary of State held such a
meeting, I think from memory, in early June.
(Winchester) (Con)
An excellent statement—on behalf of nurseries in Winchester and
Chandler’s Ford, I thank the Minister. The recruitment drive in
particular is much needed. However, it would be easier to do
that, and to retain staff, if we could give staff a pay rise. The
sector tells my all-party parliamentary group on childcare and
early education—I thank the Minister for coming to address
us—that if it were not paying business rates, that would be a lot
easier. School-based settings do not pay them, but the rest of
the private, voluntary and independent sector does. I realise
that that is a matter for Treasury, but will she please take that
away and look at it again? That would make a her a true hero in
the sector when she continues her very welcome visits.
I will of course look at everything we can do to support all
settings. As part of the work we did to assess costs, we looked
at other costs, including things such as business rates, to
assess the level of funding we should give for the hourly rates,
but of course I will always look at anything I can do to support
nurseries.
(Twickenham) (LD)
Looking at the existing childcare entitlements for two, three and
four year olds, the Early Years Alliance and the Women’s Budget
Group estimate that the current offer falls short by about £1.8
billion—and that is even before we expand the offer, as was
announced in the spring Budget. The Government are providing only
an extra £204 million this year and £288 million next year,
before we expand the hours. That clearly falls well short. There
is no point expanding the hours if the providers are not there,
so could the Minister explain what she is doing to ensure that
early years providers actually remain financially viable?
As I said, it has been a challenging time for providers, but the
work we have done to come up with the hourly rate has been based
on a lot of evidence. I do not recognise that figures that the
hon. Lady talks about. As I said, we surveyed 10,000 providers
and 6,000 parents, and looked at providers’ finance reports, to
look deeply at the costs and come up with the hourly rate. I
continue to talk to all providers as we continue the
expansion.
(North Swindon) (Con)
It is a tribute to the Minister that she secured the single
largest ever increase in funding in this important area and that
the Labour Opposition could not even be bothered to turn up
today. She will know at first hand from visiting Imagination
nursery, which is now an outstanding provider, that it has the
sort of provision that we want to expand. For it to have the
confidence to do so, it needs certainty on funding to recruit and
retain staff and secure additional premises. Will she keep
pushing for as much advance clarity and certainty as possible so
that all children can benefit from this wonderful
announcement?
I absolutely will. It was a joy and a delight to visit
Imagination nursery, which does outstanding work, and I
congratulate it on its recent grade. I will take my hon. Friend’s
point on board.
(Stroud) (Con)
This is the first time in history that a Prime Minister and
Chancellor of the Exchequer have put the early years at the
centre of the country’s growth strategy. I note that an
International Monetary Fund analyst singled it out in saying
that
“supply-side measures, notably the increase in childcare
support…should have a positive effect on medium-term growth”,
so that is absolutely welcome.
I cannot thank the Minister enough for visiting BarBar Nursery,
Allsorts, and Curious Caterpillars Day Nursery. In our work with
Onward, we have called for a national campaign on recruitment. If
there is any possibility of that happening this year rather than
next, I would like a commitment from the Department that it will
get a wriggle on, because that is important.
Will the Minister work with the Local Government Association to
have a good look at what different councils are doing, not only
with the money flowing down from Government but on how often
childminders are paid? I know of childminders who are paid only
about three times a year. Not many of us could cope with that
type of cashflow.
As always, my hon. Friend makes excellent points on this matter.
I will absolutely consider her point about childminders and will
ensure that I continue to talk to her. She has been incredibly
helpful throughout this process and in securing the funding.
(Wantage) (Con)
I warmly welcome my hon. Friend’s statement, which will help some
of those on the lowest incomes either to take up work or to take
on more work. She will recall that when I had the pleasure of
taking her to a nursey in Didcot, it raised the varying rates
that nurseries are paid by local authorities across the country
for the same work. Does she agree that, although the Government’s
largest single investment in childcare ever is welcome, it is
important that local authorities pay a broadly comparable amount
of money to providers?
I am grateful to my hon. Friend for taking to me to Bright
Horizons in Didcot, which was a useful visit. Local authorities
have different rates. We will set out funding rates before the
summer, and will consult on them. We take different costs across
the country into account, but he makes an interesting point.
(Hyndburn) (Con)
I warmly welcome the Minister’s announcement and thank her for
all the work that she has done for childcare providers. I was
going to raise the point made by my hon. Friend the Member for
Winchester () about business rates. Will the
Minister explain what help she is giving to local authorities to
help providers deliver the expanded childcare offer to
parents?
At the moment, the way the policy works is that providers have to
pass on at least 95%, and can keep 5%, of the funding rates that
they are given. Most pass on more—from our returns, most pass on
97%—but they can use the additional money for the administration
of payments and such.
(Barrow and Furness) (Con)
May I congratulate my hon. Friend on her statement and on the
hard work she has put in to get us here? I held a roundtable of
early years providers in Barrow a few weeks ago. The issue that
came up time and again was that they are losing good staff—staff
the kids like and the parents get on with—because of the
qualifications requirements for English and maths. Can the
Minister confirm whether part of the consultation will look at
that? May I invite her to come and visit Cheeky Monkeys Childcare
and some of the other providers in Barrow at some point in the
future?
My hon. Friend is absolutely right. That was one of the things
that I heard from the sector as well, particularly on the
qualification barriers. I can confirm that we are consulting on
that—particularly on the maths point—in the flexibilities
consultation that we set out at the beginning of the summer. I
would be delighted to visit him.
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