Good morning, it’s a pleasure to be here today at the Family and Childcare Trust, whose aim is to make the UK a better place for families, campaigning for affordable and accessible, high-quality childcare.
As Childcare Minister, I am pleased to say that government shares these objectives. Support for families is at the heart of our agenda. We want to give children from all backgrounds the best start in life and deliver high-quality childcare that parents can access and afford, and that works best for them.
And last week’s Spending Review showed how committed we are to supporting parents and families. Over the course of this Parliament we will invest more in childcare than any government before. By 2019 to 2020 we will be spending over £6 billion to support parents with childcare, £1 billion more per year, covering the free entitlements for 2-, 3- and 4-year-olds, Tax-Free Childcare, and the childcare element of the Universal Credit, which will provide support of up to 85% of childcare costs.
The average market price paid for 25 hours of nursery provision for children aged 2 and over has risen by 69% in the last 10 years. It’s no surprise that working families struggle to find high-quality, affordable childcare. That’s why we are putting parents at the heart of our childcare offer and why we pledged to increase the free entitlement for 3- and 4-year-olds from 15 hours to 30 hours for working parents.
What does this mean in practice? Working parents will continue to get 15 hours a week of free childcare. In addition to this, from September 2017, working parents of 3- and 4-year-olds will be able to get 30 hours a week of free childcare, worth up to £5,000 per child a year.
Early implementation pilots will mean this will happen earlier - in 2016 - in some parts of the country. This will be an important opportunity to test what works and what doesn’t in delivering the extended entitlement before we roll out the additional 15 hours nationally.
The reforms mean that along with the introduction of Tax-Free Childcare, which will provide support worth up to £2,000 per child per year, working families with 2 children could have claimed support with childcare costs worth up to £40,000 by the time both children go to school.
We’re making this investment because of the benefits for children - with development and school readiness - but also to give families greater choice to work or work without being put off by childcare costs.
30 hours eligibility
There is a lot of speculation over eligibility. Every 3- and 4-year-old child will still get 15 hours free - the existing universal entitlement for 3- and 4-year-olds - which has very high take-up of 96%.
Studies like the ‘Effective pre-school, primary and secondary education’ (EPPSE) study - carried out by academics at the Institute of Education, University of Oxford, and Birkbeck, University of London, has shown how successful the 15 hours is for educational attainment and that’s why it’s so important.
Parents will be able to access the additional 15 hours if they each work at least the equivalent of 16 hours per week at the national minimum wage or living wage, including those who are self-employed, and the same threshold will apply in the case of lone-parent households. On current minimum wage levels, anyone earning more than around £107 a week will be eligible.
We are setting an income cap set at £100,000, whereby parents earning more than that won’t be able to access the additional entitlement, although we’re not talking about a combined income here, but rather if one parent’s salary exceeds £100,000. This cap puts the extended entitlement in line with the tax system and means support is targeted at those who need it most.
We also recognise that families have different circumstances which need to be taken into account.
Parents working on zero-hours contracts will be eligible so long as they meet the criteria I just mentioned. Where one parent is employed, but the other has substantial caring responsibilities or one parent is disabled, the family will be eligible. Where both parents are employed, but one or both parents are temporarily away from the workplace, for example on maternity or adoption leave, the additional free hours will still be available, which will support continuity for families.
Quality is at the heart of what we are offering parents through the entitlements. Because we know it is quality of provision that delivers the best outcomes for young people, helping to prepare them for school and with their development more broadly.
At August 2015, 85% of providers on the early years register were rated good or outstanding for overall effectiveness. Ratings for providers in the most deprived areas have improved from 59% good or outstanding in 2010 to 79% good or outstanding in 2015. Congratulations to all the providers in the sector for delivering this high-quality provision.
We have confirmed that we will not adjust statutory staff-to-child ratios to deliver our pledge to offer more free childcare; and I will reiterate today that ratios won’t change. As the costs of childcare review we carried out shows, there are large benefits to operating at the statutory ratio of 1:8 and high-quality provision is delivered by providers who make the most of the flexibility offered by the current regulatory requirements.
And we’re making sure we have the best-quality staff.
The qualification level of the early years workforce has been rising - in group daycare settings 87% of the workforce have a relevant level 3 qualification and many members of the workforce have qualifications beyond this. We know this is important because leading international educational experts have found that staff qualifications are “one of the strongest predictors of the quality of early childhood education and care”.
We have provided specialist training for some of our highest-quality graduates through early years initial teacher training; we have set clear qualification requirements for staff working in childcare settings so that they have a solid grounding in supporting children’s learning; and we have provided funding to help deliver on-the-job training and development for childcare staff.
But I want to do more to make sure young people consider the early years as a career of choice and a sector in which they can pursue a long-term career full of potential. And I want those already working in the sector to have the opportunity to enhance their skills and to pursue qualifications that enable them to progress.
I want us to do all we can to improve career progression routes. So through a workforce strategy I will explore how we can develop a career structure for all staff, as well as put in place a clear career path for apprentices in the sector.
This is a key priority for me going forward.
As well as being high-quality, we want to ensure that a free place for parents is exactly that, a free place.
Through the investment we announced at the Spending Review we are setting a level of funding that will enable childcare providers to deliver high-quality care for children and parents, while at the same time providing value for money to the taxpayer. The overall increase in funding for childcare includes £300 million a year from 2017 to 2018 to increase the national average hourly funding rate paid to providers for the free entitlements. The new average hourly rate is £4.88 for 3- and 4-year-olds and £5.39 for 2-year-olds, and the equivalent rate per carer for 3- and 4-year-olds is £39. We based this funding on a comprehensive review of childcare costs, including careful assessment of 2,000 replies we had to the funding review, with input from all the leading sector organisations.
We were the only party at the general election to commit to raise the average funding rate paid to providers and we have now delivered that.
And we will make sure as much money as possible gets to the front line. I understand the way the local authority top slice works and how that leads to variation in rates across local areas, and that funding differs depending on types of provider. As the Chancellor announced at the Spending Review, we are committed to ensuring that funding is allocated in the fairest way and we will consult on an early years national funding formula next year. This will also consider funding for disadvantaged children and special educational needs.
We are reducing bureaucracy - by simplifying and limiting the conditions that LAs can place on providers. And we are also looking at what else we can do to increase consistency across the country. We will consider whether we can support local authorities in drawing up agreements with providers and whether when providers form a statutory relationship with one local authority, they could then use this when setting up provision in other authorities.
We know that parents like a mix of provision, combining school nurseries - because they support school readiness - with childminding, day nurseries and other provision. We understand this and want to make sure enough places are created in the sector to support these choices.
So as part of our spending commitments we are also supporting the sector with capital spending, and will allocate at least £50 million to support the creation of early years places. In addition, we will create at least 4,000 places through nursery provision as part of new free schools. And we will also consider why some providers on the early years register do not offer the free entitlement to see if we can make changes to encourage them to do so.
All of this means that more childcare places will be created, giving parents better access to the childcare they need. And I want to make sure this works for all parents.
We are opening up new sources of funding in disadvantaged areas through social investment. In March we launched the Childcare Investment Readiness Fund and we will announce the winning applicants shortly.
This will help to generate a new culture of social investment in the early years market, supporting providers to grow. Groups such as LEYF in London have already effectively leveraged social investment and we want these success stories to be more widespread.
I am clear that the free entitlement should be accessible by all eligible children, including special educational needs and disability (SEND) children. That’s why as part of early implementation of the 30-hours entitlement next September, we will be encouraging innovative approaches to providing high-quality, affordable and flexible childcare for working parents whose children are disabled or have special educational needs.
We want to hear more about existing good practice, such as the Solent Teaching Alliance, which is delivering support for private, voluntary and independent nurseries - PVIs - with a focus on children with SEND, and Tor View School, a specialist learning community in East Lancashire helping PVIs in disadvantaged areas improve their support for children with SEND.
We want to support parents with quality and availability of flexible places and help them to make informed choices. That’s why we have worked with childcare.co.uk to develop a digital app which allows parents to search for 2-, 3- and 4-year-old free childcare based on where and when they need it.
Through the Childcare Bill we have introduced a requirement on local authorities to publish information and advice for parents on childcare in their area which will further support them with the information they need - from hours offered to cost and suitability for disabled children.
We know from the Facebook consultation we did over the summer - with nearly 20,000 members of the public - why flexibility and choice are so important to working parents. And, as a working parent myself, I know how important it is to find childcare that you are happy for your child to attend and which accommodates all your needs - from the parent who needs one child picking up from school at 3pm and the other from nursery so needs to combine childminding with traditional PVI provision to make drop-off and pick-up work. To the shift worker who works non-traditional hours.
We want to support parents to make the choices that suit them in a high-quality way and this is what we will be looking at during early implementation.
We have already taken steps to build flexibility within the existing 15-hour entitlement. For example, by encouraging local authorities to fund providers to allow parents to access early education hours between 7am and 7pm so that children can be dropped off earlier in the day or collected later. We will continue to encourage this flexibility because we want childcare to fit with parents’ working hours.
We know that that this kind of flexibility is possible because we already see it in places such as Swindon, where at the Swindon 2 to 19 Academy the free offer for disadvantaged 2-year-olds is being offered over the weekend to support parents’ working patterns. In this case delivery works through a partnership between the school and a private provider, and I want to see more of these types of partnership.
Supporting the type of childcare that parents need applies to all age groups, not just those under 5. That’s why we’re making sure that from September 2016 parents in schools will have a right to request wraparound childcare - before and after school, and during the school holidays.
A key message from parents during consultation was that a simpler system would help them - I’m sure that’s the message from providers too.
With a range of childcare support from government it therefore makes sense that 30 hours matches up with Tax-Free childcare and that as well as the same terms of eligibility, because many parents will be eligible to use both the extended entitlement and Tax-Free Childcare, a joint application is being developed by HMRC which will mean that parents will be able to apply for both schemes through a joint online application.
The Childcare Implementation Taskforce which joins up work on childcare across government will continue to work towards delivering a childcare system which is simpler for parents and providers alike.
Over the course of this Parliament we will invest more in childcare than any government before. We have made a strategic choice to invest in the sector at a time of austerity because we are on the side of working parents.
We will build on existing successes - such as the 96% take up of the existing 3- and 4-year-old offer - to continue developing a childcare system which delivers for families. The decisions taken at the Spending Review and the Childcare Bill currently going through Parliament demonstrate our clear commitment to getting on and doing this.
We will support children to have the best start in life, support families to work and, as a result, allow our country to prosper. But I know more than anyone that this requires an understanding of the childcare sector and working closely with providers, and I look forward to continued engagement with you as we do so.