My Lords, I am pleased that the Bill brought back to this House today for our consideration is in such good shape. As a result of the scrutiny in both Houses, I believe that the Bill now presents the right framework to deliver the 30 hours of free childcare for working parents of three and four year-olds.
As we have discussed at length in this Chamber, for too long childcare has been the issue and the barrier for parents deciding whether to return to work or work more hours. The Bill, and the entitlement that it creates to 30 hours of free childcare, will support working parents to make real choices about how they balance raising their children and working to provide for their families. We are clear that parents need and expect the childcare provided under this Bill to be high quality and delivered in settings where they know their children are safe and well cared for.
I hope that after the debate today noble Lords will agree that this Bill is fit for purpose and that, while our discussions should continue, our focus should move on to implementation and ensuring that the details of regulations and statutory guidance are right. I hope noble Lords agree that turning this Bill into action is an exciting opportunity for parents, providers and local authorities, beginning later this year with early implementation.
I am delighted that today the Department for Education has announced the areas that will benefit from 30 hours of free high-quality childcare places a year earlier than planned, taking pressure off parents and helping children to fulfil their potential. Around 5,000 children residing in York, Northumberland, Newham, Hertfordshire, Portsmouth, Swindon, Staffordshire and Wigan will benefit early from this entitlement. In addition, the Department has announced today that it has set aside £4 million to support an additional 25 local authorities to develop innovative flexible childcare for working parents, and to ensure that we can meet the needs of children with special educational needs, in homeless working families and in rural communities.
Amendment 1 in this group removes the funding review clause that was inserted as Clause 1 to the Bill on Report in the Lords. Debate on funding in the other place prompted by the clause was extensive. Members in the other place were able to use all stages of the Bill to scrutinise, challenge and support the evidence presented by the Government’s review into the cost of providing childcare and the outcome in the spending review settlement. The amount of detail and certainty about the funding settlement for early years has increased significantly since your Lordships last debated this Bill, most notably the announcement in November’s Autumn Statement that the Government will invest an additional £1 billion per year by 2019-20 to fund the free entitlements in the early years. This funding includes £300 million per year for a significant uplift to the rate paid for the two, three and four year-old entitlements, fulfilling the Prime Minister’s commitment to increase the average hourly rate that providers receive to deliver the free entitlement.
These decisions on funding are underpinned by the review into the cost of providing childcare, published on 25 November. I hope that noble Lords have been able to look at this review document and the wealth of evidence and information it provides. I hope noble Lords agree that this is a thorough and comprehensive piece of work, and that all Peers who were able to meet the funding review team in October and again in January found these discussions helpful.
It is really important that the department is now able to build on this generous settlement and ensure that every pound is used as effectively as possible. This is why the Government have committed to introduce a new national funding formula in the early years to ensure that funding is fairly and transparently distributed across the country. It is also why we will also be ensuring that as much funding as possible reaches providers and that it is fairly distributed between different types of provider.
I am also pleased that the Government have confirmed that £50 million of capital will be allocated to support the creation of early years places for the free entitlement.
We believe strongly that the childcare market will grow to deliver the extended entitlement, but we are not complacent and are taking steps to build capacity—for example, through the free schools programme, which could create at least 4,000 places, building on provision available in free schools such as Reach Academy in Feltham, which offers free entitlement places for two, three and four year-olds. This capital investment, combined with an attractive increased rate to providers, will enable providers to seek investment to expand if they want to.
I hope that based on this significant amount of new information and detail, noble Lords will agree that the funding review clause inserted on Report is no longer required. That clause prompted debate in the other place on the important issue of funding but Members have signalled clearly that they do not believe that a further funding review upon Royal Assent is necessary, nor should it hold up the important next steps needed to ensure that early implementation can begin this year. The sooner we can tell local authorities about their funding allocations, the sooner they can begin to plan with their local childcare providers. A further review would simply delay this whole process. I hope your Lordships agree that this is the best way forward.
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Amendments 2, 3 and 6 relate to the role of HMRC in relation to the extended entitlement, and to a consequential amendment that would enable this to come into force immediately on Royal Assent. I am pleased that in considering the Bill in the other place, the Secretary of State for Education was able to confirm at Second Reading that parents will be able to apply for the extended entitlement as part of a simple, joint online system that is being developed by HMRC for tax-free childcare. This means that parents will have to provide information on their personal circumstances only once to apply for both schemes, which will create a simple and smooth customer journey for parents and minimise burdens on providers. I hope that noble Lords will welcome this.
Amendment 2 would enable regulations to be made under Clause 1 to set out the conditions to be met by a person making a declaration as to a child’s eligibility for the extended entitlement. For example, the person making the declaration will need to be the person who is responsible for the child, as is also the case for tax-free childcare. It is crucial that we are able to provide clarity for parents about the declaration they will have to make, and to ensure that HMRC will be provided with the information it will need to decide whether a child is eligible for the extended entitlement. Regulations, which will be brought to this House for consideration, will say more about these matters in due course.
Amendments 3 and 6 are linked. They will make it clear in the Bill that HMRC will verify and make a determination as to a child’s eligibility for additional free childcare, and will allow for this provision to come into force on Royal Assent, so that HMRC can begin to build the technical aspects of the joint eligibility checking system. Ensuring the operational aspects of the extended entitlement are in place in good time will enable us to test that the eligibility checking system runs smoothly for parents. I wish to be clear that the
responsibility for the 30 hours’ free entitlement programme remains with the Department for Education, and local authorities are under a duty to secure places and fund providers. HMRC’s role will be restricted to providing the joint application and eligibility checking process for parents.
The debate on these amendments in the other place was technical, reflecting the nature of the changes. Members of the other place were reassured about the role of HMRC and agreed that it was necessary that the building of the systems to support eligibility checking should begin in earnest, so that they can be tested as part of the early implementation phase. I hope that noble Lords will be able to support those amendments today.
The Government recognise the importance of Parliament having the opportunity to scrutinise the details which will be set out in secondary legislation, so Amendment 5 in this group requires that the regulations made under the Bill be subject to the affirmative approvals process on their first use. Subject to parliamentary timetabling, we hope that this will take place later this year, ahead of early implementation. The Government believe that the affirmative procedure for the first use only is the right approach, particularly given that, since we introduced the Bill over the summer, we have provided much more detail about how the Government intend to deliver their manifesto pledge and have committed to undertaking a formal public consultation on the draft regulations in 2016 before they are laid before Parliament.
If the Government are required to timetable a debate in both Houses when details need to be amended in regulations, this will be likely to have a detrimental impact on the successful delivery of the new entitlement. We want the Secretary of State to be able to respond efficiently and effectively, where necessary, to support local authorities, providers, parents and their children without seeking and receiving the approval of Parliament to do so. Once the fundamental principles have been agreed, we do not believe that it would be a good use of the parliamentary timetable to make changes that would ordinarily be dealt with under the negative resolution procedure—for example, if consequential changes were made to the current entitlement to reflect the introduction of the education, health and social care plans and the replacement of residence orders with child arrangements orders. Such changes are straightforward and not controversial, but if the regulations were subject to the affirmative resolution procedure, then these amendments would require a full debate in both Houses.
In the other place, after a debate on this issue, all sides of the House agreed with the Government’s proposal. The shadow Minister for Childcare said:
“The Minister has given assurances for the first time that the regulations will get full debate in both Houses, and the negative procedure is normal practice in other areas, so I am happy with that”.—[Official Report, Commons, Childcare Bill Committee, 10/12/15; col. 119.]
I hope noble Lords will agree with this approach today.
The Government recognise the expertise of this House, particularly on the details of how the entitlement will be delivered in practice. I would therefore like to meet interested Peers in March to begin an ongoing dialogue on the draft regulations and policy details ahead of public consultation. I look forward to having detailed discussions at that meeting and, quite probably, subsequent meetings.
Amendment 7 is a technical amendment to remove the privilege amendment made in this House before the Bill passed to the other place. As noble Lords will be aware, this standard formula of words is incorporated into a Bill as it moves from your Lordships’ House to the other place to avoid infringement of financial privilege. A money resolution has been passed conferring parliamentary approval for financial expenditure incurred as a result of the Bill, and the removal of the privilege amendment is a formality.
I hope that the significant progress made on this Bill since it was last debated in this place in October will be welcomed. The detail on the wider policy and funding to deliver 30 hours of free childcare for working parents of three and four year-olds shows that the Government are committed to delivering their manifesto pledge in a way that works for parents, providers and local authorities. I hope that noble Lords are able to support the Government’s amendments today.