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Childcare Bill

moved Amendment No. 3:"Page 5, line 6, at end insert—" ““(   )   Regulations under this section must allow for private, voluntary and independent providers of childcare to provide for between— (a)   two and a half or three hours per day at the choosing of that provider, and (b)   thirty three or thirty eight weeks per year at the choosing of that provider.”” The noble Baroness said: My Lords, as I explained in Committee and on Report, this amendment inserts a new subsection into Clause 7 to allow for a degree of flexibility and choice for the private, voluntary and independent sectors regarding the number of hours and total weeks they may provide as a minimum free entitlement. Paragraph (a) addresses the number of hours a day to be provided and paragraph (b) the number of weeks. I hope noble Lords will not mind, as this is Third Reading, but I think it important to go right back to the beginning and explain the situation so that we know where we are on the amendment. Originally, free entitlement to nursery provision for three and four year-olds was two and a half hours a day or 12 and a half hours a week for 33 weeks. From April this year, the number has increased to 38 weeks. From April 2007, the minimum free entitlement will be extended to 15 hours a week—three hours a day—with an objective of providing 20 hours a week free by 2010. That free provision is paid for by the nursery grant, but it is widely recognised by the industry that the grant goes nowhere near covering its costs, especially in the south of England, and the situation will only get worse with the extension of free provision. To help bridge the gap between the money received from the Government and the reality of providing good, high-quality care, it is almost universal practice for providers already to offer three hours a day of care, with two and a half hours free, and then to charge a top-up fee for the extra half hour, which goes some way to covering costs. From April 2007, that will not be allowed, and although providers will receive extra nursery grant for the extra half hour, it will not be enough. Half an hour may not seem a great deal of time, but there are a lot of half hours in 38 weeks. I explained on Report that some local authorities were requiring private, voluntary and independent providers to extend their weeks from 33 to 38, while others were not enforcing that as long as parents were aware that they were entitled to 38 and that it was available with other providers. I pointed out, and the Minister accepted, that it would be impossible for some providers to extend their number of weeks because of the different types of premises they occupy, often sharing the facilities with other organisations. However, the pressure to conform is increasing. I was therefore most encouraged when the Minister said:"““The duty to ensure sufficient 38-week places is a duty placed on local authorities, not providers, and the availability of provision in a local area should be delivered in accordance with parental demand. Therefore, as long as local authorities can provide sufficient 38-week places for those parents who want them, either through individual providers or in collaboration between providers, there should be no need for them to put undue pressure on providers to deliver places only over 38 weeks, when there is also a market among parents for a provision over a lesser period””." He went on to say:"““We also acknowledge that some parents may take an informed decision to choose a provider that is open for fewer than 38 weeks. We have therefore made clear in the code of practice that in these circumstances providers should be funded for the free provision that they deliver. So it is not an all-or-nothing approach for the 38 weeks, even over the medium term””.—[Official Report, 12/6/06; col. 57.]" I was most grateful to the Minister for clarifying that on Report. However, following Report, it became clear to me that although the issue of the number of weeks may have been addressed, the biggest anxiety still remained—the increase in free hours per day from two and a half to three. I had a meeting with the Minister, for which I am most grateful, following which, last Thursday evening, representatives from Montessori met officials from the DfES to discuss the issue. It is a shame that because of our debate on child poverty, which was delayed by a Statement, the Minister did not have the chance to be there. I welcome the fact that the Government are prepared to listen on this issue, although I am not sure that they are hearing the implications of what is being said. The truth is that if small PVI nurseries lose the ability to charge top-up fees and have a degree of flexibility on the increase in the number of hours and weeks proposed for free entitlement, the service that they provide will not be sustainable. The Government’s own figures show that 94 per cent of daycare providers are in the PVI sector. Surely we should nurture that resource, not squeeze and threaten it. But, in a typical case in south London, in a school which has always opened its doors to special needs children, the income from the grant does not even cover the basic staff costs of the nursery school. Rent, insurance, taxation, school equipment, food and drink, transport and trips, administration, accountancy, legal expenses and all profit—some of which is negative for the provider—are all paid out of the top-up fees. Without top-up fees, a precious educational resource will either close or go private and leave partnerships with local authorities. What does that do for parental choice in childcare? I understand that the message from the meeting was that there was no option but a total extension of free entitlement across the board. But why? If Sure Start centres are to be opened up across the country, they will provide the free entitlement. Why cannot the PVI sector provide the free entitlement and charge the top-up for the rest, as long as it is made clear to parents that there is a choice between the two options? I believe it was also suggested at the meeting that perhaps some way could be found to sustain nurseries that would be hit in such a way. But how would they be sustained—with more public money? Is that not just an extension of the state rather than the proposed working with the private, voluntary and independent sector? From the new figures I have seen, I am not sure that the department will be so willing to cover the shortfalls in the system that will only increase without top-up fees. I have seen figures that range from £25,000 to £95,000 a year for each setting. I welcome the fact that the department’s officials have asked for detailed statistics and have said they will consider the issue. But surely that is doing things the wrong way round. This situation should have been investigated when designing the free entitlement extension, not after the fact or after the Bill. We have welcomed the Bill in principle and yet many of its details are causing great concern. At a time when morale in the sector should be high, Montessori and other providers are reporting that it is low across the country. Although Montessori brought this issue to our attention and is leading the argument, it is by no means alone. Barbara Isaacs, the head of Montessori in the UK, in a letter to the Minister which was copied to me, asked for local authorities to be able to relax the enforcement of the new system, to allow top-up fees to continue and to allow the nursery grant to be paid on a pro-rated basis depending on the hours and weeks of delivery, which is what our amendment would deliver. She ended her letter with a passionate plea. She said:"““Montessori never sought to standardise or regulate the learning of a young child; she would have utterly recoiled from that philosophy. Montessori taught us to celebrate and enable variety. Please do not let teachers and thousands of children in Montessori schools down by failing to listen to this cry for help and understanding in this, our centenary year””." I beg to move.