Thanks, Anand (Shukla, Chief Executive, Daycare Trust), I’m very glad to be here.
There has been a lot of debate about the childcare system recently. I would like to take this opportunity to pay tribute to the Daycare Trust, which has championed the importance of childcare for so long. I very much value your input and look forward to working with you in the months to come.
A few weeks ago, I went to an early years seminar hosted by Frank Field, where academic experts presented a compelling chart. It showed that, in England, much more so than in other high-performing countries, major educational gaps open up not at 16 or even at 11, but by the age of five.
There can surely be no clearer illustration of why early education matters so much.
Why we must do much more to take advantage of this terrific opportunity, before they start school, when young minds are so open to learning and development. To give all children, especially those from low-income families, a good start that will help them fulfil their potential over a lifetime.
Like you, my ambition is for our childcare system to be the best in the world. To be high quality, affordable and to offer parents choice.
There’s been some good progress in recent years.
We’ve just announced that we’re providing local authorities with more than half a billion pounds next year to implement the early education programme for two-year-olds from lower-income families. A record 96 per cent of three- and four-year-olds are already benefitting from this programme, with 88 per cent of parents saying they’re satisfied.
Quality and professionalism is improving in the sector, with Ofsted’s inspection regime one of our system’s great strengths. As of last week, parents and providers will be able to see how many good and outstanding providers there are in each local area through a new online tool on Ofsted’s website.
And as you know, we’ve commissioned a number of childcare reviews. We’ll be responding to Professor Nutbrown’s valuable recommendations about strengthening the qualifications and skills of the workforce shortly.
There’s also the commission on childcare which I’m leading with Steve Webb from the Department of Work and Pensions, which will also report soon.
Problems with the current system
Now, overall, we’re spending more than ever on early years and childcare - around £5 billion a year, with funding set to rise by another £1 billion between now and 2015.
Yet, despite this, parents, especially mothers, are being put off work by high childcare costs.
Some families spend almost a third (27 per cent) of net family income on childcare, more than double the OECD average of 12 per cent.
The recent Resolution Foundation study lays bare the challenge faced by some middle-income families.
It found, for example, that a family with two children, in which two earners bring in a total of £44,000, could end up just £4,000 better off - because of childcare costs - than a single parent family earning £20,000 less because of childcare costs.
Just think of the tremendous talent and skills that we could tap into if it was easier for mothers to access childcare and go out to work. The gains for family incomes, for women’s career opportunities, for the wider economy could be significant.
We now have fewer mothers going to work than some countries in Europe -Eurostat figures show that 66 per cent of British mothers work, compared to 72 per cent in France, 83 per cent in Denmark and 78 per cent in the Netherlands and 70 per cent in Germany.
We’ve been overtaken in recent years by countries such as Germany where the number of working mothers has gone up by eight per cent following a national campaign to increase the availability of all-day schools.
All of this wouldn’t matter if parents didn’t want to work. But a survey by my department shows that half of mothers who aren’t working want to work, but the cost and availability of childcare is one significant barrier they face.
However, high costs aren’t the only problem. Provision is of variable quality. And too many staff are low-paid and low-skilled, meaning that the status of the workforce is not what it could be.
Need to build the workforce
So what can we do to turn this around?
The evidence from Professor Nutbrown’s review and from other childcare systems abroad suggests the answer lies with people and not processes.
High-quality staff are the key to building an efficient, high-quality system; in preparing children for school and closing the educational gap between children from rich and poor backgrounds. And in the greater flexibility their enhanced skills give employers, to operate more effectively and cut costs to parents.
Yet staff working in early years currently don’t even need a C grade in English or maths at GCSE to work in early years. As Professor Nutbrown has remarked, you can hardly expect staff to teach young children how to read, write and add up when they haven’t mastered the basics in English and maths themselves.
And too many early professionals are poorly paid - barely more the minimum wage. So, a childcare worker in England earns around half what he or she might make in Denmark, Germany and the Netherlands and almost 38 per cent less than in France. It’s a similar situation with supervisors.
Staff have also been hamstrung by a bureaucratic, box-ticking approach which we’re changing by, for example, streamlining the Early Years Foundation Stage Framework- I’m pleased this has been widely welcomed.
But there is more we can do.
I want the early years profession to be a really attractive option for school leavers and graduates. There are encouraging signs that this is happening - the percentage of paid staff holding a higher level qualification rose from 65 per cent in 2007 to 79 per cent in 2011.
I want this to be an occupation that offers clear routes for career progression and a standing on a par with other professions.
This means more staff being better paid, better trained and better qualified as we move towards an ever increasingly professional workforce.
It means staff being given greater autonomy to exercise their professional judgement.
And it means nurseries making sure they’re using existing freedoms to recruit more graduates and be more flexible about staffing, while always remaining focused on the fundamentals - the safety and quality of care.
What we can learn from other countries
I want a clear focus on quality; skills, professional autonomy, and value for money as seen in childcare systems abroad.
I recently visited some nurseries in France where staff are well-qualified and take responsibility for looking after more children. I was most impressed to see children being led in well-structured activities in bright, well-organised settings. The children were enthusiastic and eager to learn. And the experience and skills of the staff shone through.
This reflects the fact that three quarters of staff in French creches and childcare services have to have an appropriate diploma, which is broadly equivalent to a year of study after A levels. Qualified teachers teach nursery classes and most nursery assistants hold diplomas. Younger children are looked after in structured group sessions led by highly qualified professionals .
Similarly, in Denmark, daycare facilities are run by highly qualified managers
who have completed a three-and-a-half year course in a specialised training college. And they’re staffed with professionals who have received secondary vocational training.
Again, the workforce is so highly skilled, that they’re trusted to use their expertise to staff their settings as they deem appropriate, with with no nationally prescribed staff: child ratios in place.
It’s a system that’s clearly working well for parents, with Denmark boasting above average maternal employment rates - 71 per cent of mothers with children under three are working compared to 56 per cent in the UK.
There are, of course, differences between our system and those in France and Denmark. But running through provision in these countries is a respect for professional judgement and a belief in the importance of skilful and knowledgeable staff that we could learn from.
After all, we know, from our own experience with the Academies programme, that giving professionals greater autonomy and transparency works. By directly funding these schools and freeing headteachers to run them and recruit the best staff, academies have turned around hundreds of struggling schools and are improving their results at twice the national average. Their achievements have been recognised by Ofsted which, in turn, is now focused more tightly on the things that really matter - quality of teaching, leadership, pupil attainment and behaviour and safety.
There’s no reason why giving early years professionals similar freedoms couldn’t drive improvements in childcare.
Another key area where we’re looking to learn from other countries is funding.
We’re pumping large sums into childcare - as a share of GDP, the Government is spending twice the OECD average. It’s true that we spend less than Denmark, but our spending is comparable with France and we spend more than Germany. But providers are still struggling to stay afloat and parents are facing rising costs.
We must make our money work harder. A recent IPPR report concluded that our current system is “expensive”, “inefficient” and “confusing”. I’m keen to improve this.
We’re already making changes. You can see this in the way we’re rolling out the two-year-old programme, so that funding is more transparent and focused on the high-quality settings that research tells us provide lasting educational benefits to children.
At the moment, there are significant differences between the rates different local authorities pay for three- and four-year-olds. A National Audit Office report on the three- and four-year-old programme, published in February this year, found that wide variations in funding levels and the complexity of local funding formulae created administrative burdens for providers operating in more than one area.
We want high-quality providers to expand their businesses and bring their expertise to parts of the country where provision is currently patchy. But it’s difficult for them to offer a consistent quality of service across the country when the amount they’re paid in different areas varies so much.
I recently met childminders and nursery managers in Leeds. They were passionate and articulate about providing high-quality care and education for young children and meeting the needs of local parents. They told me that the base rate paid by some local authorities in the region for early education for three- and four-year-olds was around £3 per child per hour. Other local authorities paid as much as £5.
I want providers to be able to expand wherever there is demand, and not be held back by variability in funding rates between neighbouring authorities.
So, in introducing the two-year-old programme, we’re, firstly, providing enough money - over half a billion pounds in 2013-14 - to recruit and retain the best quality early years staff and to boost the skills of existing staff.
I have also ensured that funding for the two-year-old places will be delivered with greater transparency than ever before.
Last week, I announced individual allocations to local authorities for the two-year-old programme in 2013-14. I also confirmed the Department’s estimates for the number of children who will be eligible in each area.
This means that for the first time, local authorities, providers and parents will be able to see exactly how much has been provided to authorities for the two-year-old places.
I will let you do the maths. But if you divide the funding by the number of places, and then divide that by 570 hours, you will see just how much per hour each local authority has been given.
Nationally, this works out at an average rate of £5.09 per child per hour. This is significantly above the average market rate of £4.13 per hour as reported in the Daycare Trust’s own childcare cost survey this year.
I want local authorities to take their cue from the National Audit Office, and offer a clear and simple rate for the delivery of the two-year-old places.
Because setting a simple, sustainable funding rate is vital to give providers the confidence to become part of the programme.
Providers will know they can go anywhere in the country and be confident that a local authority has enough funds to pay for a high quality place. This is where Ofsted’s new online tool will be very useful - for providers to see where there’s good and outstanding provision and where there are gaps in the market they can fill.
Our aim is for as many children as possible to receive early education in good and outstanding settings. But for this to happen, funds need to reach the front line.
So I’m urging local authorities to make sure this funding is passed on to providers. We’ll be publishing the actual amount every local authority has passed on, on the Department’s website next year, so parents and providers will be able to compare rates across the country and hold authorities to account.
It’s also crucial that local authorities raise awareness, so that as many families as possible take up the two-year-old offer. I’ve made it clear to local authorities that in future, funding will be linked to the number of children participating, so funding will go down if we don’t achieve high levels of take-up.
That may sound somewhat impatient, but I’m determined to deliver improvements in early education as quickly as possible.
With your help, I want to make the system more efficient and affordable, with the emphasis firmly on quality.
Having listened carefully to the views of parents and childcare professionals, we’ll be taking forward work from Professor Nutbrown’s review and from the childcare commission in the coming weeks and months.
As part of the commission, we’re considering reducing regulation that places an unnecessary burden on providers. We’ve also been looking at
wraparound and holiday care for school-age children and have found an inspiring range of activities on offer in different schools. We will report on this soon.
I also recently visited Germany and saw first-hand how high-quality, well-planned extra-curricular activities, supervised by highly-qualified, non-teaching staff, have been integrated into schools in Berlin and are catering for children of all ages. These staff work closely with teachers to support pupils throughout the school day - which, with lessons interspersed with non-academic activities and study time, can run from half seven in the morning to four o’clock in the evening. Wrap-around care in some schools extends that offer from six in the morning until six at night. There, as here, this offers greater flexibility for working parents.
I want to see what we can learn from this.
I would also like to see all providers - nurseries, childminders and schools - to step up to the challenge so that good and outstanding settings become the norm. Lower quality providers must raise their game. High-quality providers should consider options for expanding to meet demand. I hope new providers will also come forward to offer their services.
I’m keen to work with you, the early years profession, and with parents, over the coming months, to develop a system that our children truly deserve.
For children’s life chances, which, as I said at the start, depend so much on their readiness to learn when they start school.
For parents who need to work to support their families and want to be sure their child is receiving safe, high-quality education and care that’s affordable.
And for early years professionals, who should be well-rewarded and recognised for the vital job they do, as part of an increasingly skilled workforce.