Education Bill

My Lords, I do not share remotely the experience of the noble Lord, Lord Peston, who I see leaving. I do not wish to stay him; I merely wish to say that having seen a great deal of legislation coming and going, both in government and Parliament, I expect that ““resist”” will be on the file for these amendments, too. However, I shall speak to them none the less. I spoke at Second Reading about the problems faced by many private and voluntary nursery settings as a result of the operation of the free entitlement and the injustice and, to some degree, dishonesty that results from it. I shall not repeat those arguments in Committee. The reality is that we rely, and will continue to rely, on private and voluntary settings to provide much of the nursery education that people freely choose and that successive Governments have held to be desirable. I wish to see no change in that situation and I hope that that is also the position of the Government. I take as my text a letter written by the Secretary of State, Mr Gove, to a nursery provider when he was an opposition spokesman. He wrote as follows: "““We think it is incredibly important””—" you can almost hear him— "““that parents are given the widest possible choice of childcare. Each family is unique and has unique circumstances; thus they should be able to access childcare that is affordable and flexible to their needs. It is disappointing therefore that the Government””—" he meant the previous Government— "““have not done more to help Private, Voluntary and Independent … nurseries. We believe that at present there is not a level playing field among nursery providers and that the financial pressure on private, voluntary and independent providers is simply not sustainable””." He called in the letter for the code of practice to be suspended to allow nurseries to charge supplementary fees to parents as a temporary solution. I agree with what the Secretary of State, as he is now, said then about the importance of the private and voluntary sector, but there is still no level playing field. There is still financial pressure on smaller providers and it is disappointing that there is not more recognition of the value and viability of those small, diverse, and, I submit, outstanding settings. It is a very confusing world out there. We speak of free entitlement, but a lot of ducking and weaving is going on. I looked at the websites of two neighbouring county councils. The first offers £53.55 a week—that is, £2,020 for the 38-week period referred to in the free entitlement. My maths says that that is a total of £60,000 a year for a 30-child setting, which might be typical. The noble Earl, Lord Listowel, talked about low pay in the sector, and there is low pay in both the maintained and the private sectors. How, with the cost of premises, finance, training, equipment and all the other things that schools provide, can that sum be sufficient? That is alleged to be sufficient for the free entitlement. The website rightly, in accordance with the code of practice, requires settings not to oblige parents to purchase additional hours in order to secure free provision. The second website I looked at offers £2,297 per year per child—probably about £70,000 a year in a typical setting. The website tells providers: "““You cannot charge a parent a fee for their child's free part time entitlement. The National Code of Practice states: ‘Parents cannot be charged for any part of the free entitlement either directly or indirectly’. Please take this into account when working out invoices/bills and so on, as you must not charge any top up fees””." That is what they are told to say. It adds: "““It is your responsibility as the provider to arrange with the parent or legal guardian to pay for any additional services””." That is a bit like the News of the World journalist who makes his excuses and leaves when asked to pay for additional services. On the other hand, the same website tells parents: "““The entitlement is free. However early years providers can set the session times when you can claim the entitlement. This means that they can charge you for any time taken outside of the free sessions and for any additional services””." In other words, parents are told, ““Expect to be charged for extra service by mutual agreement””. It may surprise the Committee to hear that I do not criticise that local authority, because it recognises that the price controls—they are effectively price controls if you say that you cannot charge for so many hours—set under government direction are not sufficient to cover the cost of settings. The authority is trying to protect the diversity and choice that the Secretary of State, when in opposition, praised. However, it illustrates graphically that the controls operating, if enforced, would rapidly shut even more private and voluntary settings in great swathes of the country. That is what I meant when I spoke at Second Reading of the climate of dishonesty. The fiction of the 38 free hours with no top-up fees, when the reality is that something else is happening, weighs most heavily on small, specialist, sessional settings, the kind that offer most diversity and choice, particularly to working mothers—ironically, often part-time teachers and carers—who want to leave their children during a morning or afternoon. In those cases, under the theory of the code of practice, those settings must charge nothing for three hours of the morning and then pile all their costs—perhaps £1,500 a term, probably more—on a notional extra 15 minutes or half an hour for which they cannot legally enforce payment. I question whether that can be sustained without legal challenge. It bears most heavily on smaller, vulnerable settings, which all Governments say that they want to preserve. In a recent survey, 48 per cent of settings admitted that they were not complying with the funding requirements in the code of practice, either because they were charging registration fees or because they were not providing uniforms, lunch clubs or extra hours. They were finding ways of getting round the law. Even though almost half said that the local authority was helping them to find ways round the code, the majority said that the LEA was now bearing down on them more heavily. Forty-six per cent said that, as a result, they were considering opting out and going entirely private. In other words, there could be a two-tier system in nursery education—a self-defeating outcome and the very thing that we should be legislating to avoid. Assuming that pouring in resources to buy out the diversity of private and voluntary provision or to raise the level of funding to something that would be adequate to meet the real costs of these settings is neither affordable nor desirable, there must be other ways forward. At Second Reading I said that I would prefer the original policy approach, which was to give parents the sum that the Government deemed sufficient to buy free education and to let them choose. It could be done through the child benefit system. However, that is not within the scope of this legislation. The second option is in line with what the Bill proposes for two year-olds: namely, to limit free entitlement for all ages by some form of means-testing or relation to disadvantage. I do not find much attraction in that. The third option would be to accept the present system but to render it honest and lift the fear of legal regulatory challenge from those authorities and providers that are trying to find a way round the present system and protect diversity. The amendments offer three potential ways of looking at this. I do not claim that they are either perfect or perhaps even right, but I ask the Minister to think about them with his colleagues. Amendments 3 and 9 would require local authorities simply to fund a free place for those parents who want one. It would prevent the fear of the operation of price controls and would effectively allow consenting adults to pay more if they wanted to. Why not, in a free society? Amendment 6 would make clear beyond doubt that price controls could not be extended across the total fee charged by settings to parents in receipt of the NEG, otherwise it would admit that what is going on has to go on if we are going to preserve some diversity in the sector. It is what is happening now behind closed doors. I referred to Amendment 8 when I spoke to Amendment 7, tabled by the noble Baroness, Lady Hughes, which I could have supported. It simply asks the Secretary of State, in framing guidance, to have regard to the sustainability and viability of the private and voluntary sectors, and to make good his commitment to those providers when he was the opposition spokesman. Surely that is not too much to ask of a Government who back small business and believe in educational diversity. I conclude by saying to my noble friends that, when in the previous Parliament an Early Day Motion was laid in the other place calling for a relaxation of the code of practice and for flexibility to enable providers to charge necessary, sustainable fees for those who could afford them above the free entitlement, it was signed by half the present Cabinet, including the Prime Minister and the Secretary of State. I do not know what has changed since then—I suspect that some in the private and voluntary sectors would like to know—and I beg to move.