Education Committee

Oral evidence: Support for childcare and the early years, HC 969

Tuesday 9 May 2023

Ordered by the House of Commons to be published on 9 May 2023.

Watch the meeting

Members present: Mr Robin Walker (Chair); Caroline Ansell; Miriam Cates; Mrs Flick Drummond; Anna Firth; Nick Fletcher; Andrew Lewer.

Questions 248-305

Witnesses

I: Claire Coutinho, Parliamentary Under Secretary of State (Minister for Children, Families, and Wellbeing) Department for Education, and Susie Owen, Director of Early Years, Childcare, Families and Analysis, Department for Education.

Examination of witnesses

Witnesses: Claire Coutinho and Susie Owen.

Q248       Chair: Welcome to today’s session, which is the fifth in our inquiry on support for childcare and the early years. We will be hearing evidence today from Claire Coutinho, Minister for Children, Families and Wellbeing at the Department for Education—welcome—and Susie Owen, Director of Early Years, Childcare, Families and Analysis at the Department for Education. Welcome.

We have heard evidence from the early years sector that the funding rate for the universal entitlement has been lower than the cost of delivery, putting settings under considerable pressure over the last few years. How will you ensure that that isn’t the case going forward, Minister?

              Claire Coutinho: Let me take a step back and talk about what we did in the spring statement, which is going to be the single largest investment in childcare. By 2027-28, we are going to be spending an additional £4 billion, which is more than double what we spend now, so there are significant amounts of investment going into the sector. We have increased the hourly rates for different age groups, so for three to four-year-olds, the rate will be going up by 7% year on year. For two-year-olds, it will be going up by 30%. That will kick in during September of this year to go up to £8. For under-twos, whom we do not currently fund, so there is currently no hourly rate, it will go up to £11, and the first entitlements to that will start next year, so there are significant amounts of funding going to the system.

The first uplift will kick in during September—that is £204 million—and there will be an additional £288 million next year, but let me look at how we have calculated the rates. We do have a robust methodology. We talk to different providers. We have a survey in which about 10,000 providers participate. We have a parent survey, in which 6,000 parents participate. We also have a providers finance report. That gives us different information from occupancy rates to staffing data, levels of qualification and that kind of thing, as well as looking at cost pressures such as national insurance, pension contributions and business rates.

We use all that information to look at the costs that the sector is facing, and that is how we come up with the rates, but I do know it has been a challenging time for the sector. We recognise that, and I hope this funding will help to improve it.

Q249       Chair: That’s helpful. When we spoke to childminders just a couple of weeks ago—we had roundtables and engagement sessions with them—a number of people, when they heard those rates, particularly those for under-twos and two-year-olds, said that that sounded fantastic, but they didn’t really believe it. They felt that they wouldn’t get that amount of funding via the local authorities. Do you feel that the local authorities are passing on as much as they should of the funding they are receiving from Government?

              Claire Coutinho: At the moment, there is guidance that means they can top-slice 5%, effectively, of the funding that comes through from Government. We have section 251 returns, which show how much funding is retained by local authorities. Actually, on average, it is less than 5% at the moment. We will keep a close eye on that, but the vast majority of the money—over 95%—is passed on to providers. I do agree with you in that when I have gone around to meet different providers and talk to them about the rates, they have been very positive about the early years rates—which, as I said, have been very generous with the rate for two-year-olds going up by 30%—and I think that coming through will give them confidence, and hopefully will make sure that the whole system is properly funded.

Q250       Chair: In terms of coming through, we have seen figures from the NDNA suggesting, from freedom of information requests that it has made, that 15 local authorities reported an underspend of more than £1 million, and that one of those local authorities had an underspend of £1 million four years running. That sounds pretty concerning in terms of the money reaching the frontline where it is needed. Is there anything the Department can do to make sure that that those consistent underspends are not continuing?

              Claire Coutinho: I have looked at underspends particularly, and I think that—Susie can correct me if I am wrong—in 2021 it was about £60 million. When we dug into that, the reason for it was generally to retain some money for allocation for children coming into the system at different times, so they could have that flexibility to make sure that if children were coming through in a different term, they could fund that. However, this is something we keep a careful eye on through the section 251 returns. Our desire is that the majority of the funding gets passed on and is well spent. I don’t know if Susie would like to add anything to that.

Susie Owen: I would add that, at the moment, that 5% topslice applies to the three and four-year-old funding. Obviously, we will be issuing a consultation shortly on how money will be distributed for the younger children, which will include how that will be distributed across the country. We will give more certainty around the local rates for local authorities. We will also include consultation on things such as the funding that can be kept by local authorities.

As the Minister said, that is something we will keep a close eye on. We will think about how we best distribute the additional funding that is going into the market in the best possible way to ensure that as much as possible reaches providers—to deliver the entitlements.

Q251       Chair: That would be appreciated. I am told that £50 million from that funding went into council reserves in previous years. Of the 92 local authorities that took part in the surveys, only 11 gave some or all the money they received back to providers. It would seem to be a case for trying to reduce the amount that they can topslice.

You said you will provide more information in due course on the details for funding arrangements for new entitlements. Can you confirm any timeline for that, and what level of detail will be provided?

Claire Coutinho: Before the summer, we will set out a consultation for the ’24-25 rates, which will have illustrative modelling, and will be finalised in autumn, in the normal way that providers will be familiar with. As Susie said, we will also look at how we distribute the two-year-old funding. That will be included in that consultation, as well.

Susie Owen: Ahead of the summer, we will also confirm the final rates for the ’23-24 uplifts, which come in from September. Those will be published ahead of the summer as well.

Q252       Chair: Since the Budget, what level of engagement have you been able to have with the sector? It was obviously a significant achievement to get that budgetary settlement for the sector. In terms of the engagement that you have had since, what are you hearing from different parts of the sector about the adequacy of the funding, particularly for the three and four-year-old piece, which they are already providing? We have heard a lot of evidence that they don’t feel that has been properly funded to date. Do you get the impression that that has changed?

Claire Coutinho: First, I would like to thank the Select Committee for raising the issue, along with many other external people, to ensure that we did secure that single largest ever investment in childcare at the autumn statement. We talk to providers a lot. I make it my business to go around and meet lots of people across the country.

In terms of how we assess costs in the sector, as I said, we have a survey that 10,000 providers feed into. The Department is constantly talking to providers to try to understand the challenges they face, whether that be funding or recruitment, which I am sure we may come to later, or anything else. Would you like to add anything, Susie?

Susie Owen: Over the summer term, we will engage extensively with local authorities and their provider base to understand local markets in more detail and the individual challenges that local markets will face as we roll this out. That will enable us, as we move towards first delivery of the new entitlements on 1 April next year, to provide the right support in those local markets. Because we know childcare is hyperlocal in how the dynamics play out locally.

Q253       Miriam Cates: A new policy was announced in the Budget of 30 hours entitlement for babies from nine months to three years old. The Chancellor said the aim of the policy was to get mothers—parents—back into work. Has the DfE made an assessment of what the take-up will be? What is your assessment of how many places will be taken up?

Claire Coutinho: Susie might like to add further detail, because that is part of the work we are doing at the moment. We have looked at some information. For example, we have a parental survey that asks parents how many of them would like to work more hours. Particularly those on lower incomes—from memory, about 40% of mothers who earn less than £10,000—said that they would like to do more hours.

We looked at all that information, as well as things that happened in previous expansions of entitlements, to assess the figures. Overall, the OBR figure was 60,000 extra people in the workforce. That was people entering the workforce and also people increasing participation in the workforce.

Q254       Miriam Cates: So, 60,000 is the estimated number of parents who would return to work as a result of the policy. If that is at a cost of £4 billion, that is about £6,500 per parent. If they work an average job, they will probably contribute about £3,500 in tax. That does not look like a particularly good deal for the taxpayer, when you have a million vacancies and only 60,000 people going back into work. Do you think that is a good value way to spend £4 billion, if you are trying to have an economic benefit?

              Claire Coutinho: There are a few things there. First, this is about giving parents choice. Actually, there are lots of parents who want to work who cannot, and it is not necessarily about the tax they generate right now, if you are thinking just about the tax benefits; it is about the tax over the entirety of their career. We know that for lots of parents not being able to get back into the workforce, particularly if that is for a number of years, makes it harder for them to go back in later. It also affects their future earnings, so I do not think you can just take a year-on-year comparison of tax generated per the amount you are spending on childcare. But I think we should also look at the wider benefits of the policy. We know that work can have mental health benefits. For people who want to progress in their career, the general ability for parents to make that choice for themselves is a positive thing.  

Q255       Miriam Cates: I agree with your assessment for women with careers, where there is detriment in taking time out and it is perhaps harder to be promoted. But for the majority of women, who do not have careers but have jobs—let’s say you stack shelves, you are a receptionist or you input data, all of which are very valuable jobs—I do not think there is any evidence that it is harder to get back into the workplace if you take two or three years out. Those are the people we are talking about here, who may benefit from a free childcare offer because they do not have the salary of someone in a career, who could potentially fund it themselves.

You talk about the DfE survey data, but in 2019 the DfE found that two thirds of mothers with young children would prefer to work fewer hours. The ONS suggests that 77% of mothers who do not work are not looking for work, so the number of parents who are potentially looking to benefit from this is actually quite small. But all the benefits we are talking about are for parents. What about the benefits for children? What is the evidence that children under three benefit from formal education and formal childcare?

              Claire Coutinho: First, like I said, this is about parental choice. A third of parents wanting to work more hours—that is something we should be trying to enable. Like I said, as you go down the income deciles, particularly for mothers who are learning less than £10,000, 40% of them did want to work more hours, so enabling them to have that choice by increasing the entitlements is a positive thing.

There is a wide range of analysis of the benefits of early years education. We obviously have the SEED analysis, which I know the Committee will be familiar with and which shows the positive aspects, particularly for disadvantaged children, of having high-quality early years education.

Q256       Miriam Cates: On that, though, most of the evidence that I have seen is that, for children aged three and above, fifteen to 30 hours a week of formal education certainly can have both cognitive and social advantages. But I would dispute the evidence for under-threes, and the SEED study actually found that more hours per week of group formal childcare for very young children can have negative effects on emotional development. There is certainly a lot of evidence that the stress hormone cortisol levels are much higher in babies under three—particularly those under one—who spend long periods of time in formal childcare, and that is associated with increases in ADHD and behavioural problems all the way through the school year. What evidence does the DfE have that this will benefit small children, rather than actually harming them in the long term?

              Claire Coutinho: Actually, I dispute that. Susie might correct me, but I think the SEED analysis does show that a certain amount of hours—I think it is about 15 hours for two-year-olds, and even a small amount of hours for children who are younger than two—is beneficial. It is really important that we look at all that analysis and design the programmes around that. If you look at our disadvantaged two-year-old offer, for example, it sets out 15 hours because that is what has been proven to be highly effective.

Q257       Miriam Cates: But the offer that the Government is making is 30 hours per week for a nine-month-old. Not everyone will take up the full entitlement, and not everyone will be able to. If we go back to the kinds of parents who need that entitlement, a formal 30 hours a week—only in term time, nine till three—is perhaps not particularly helpful for those people in those jobs, but that is the Government offer: 30 hours a week for a nine-month-old. It suggests that the Government and public policy think that this a good idea for both parents and children.

I would suggest that the evidence shows the opposite, and I wonder why we are having such an increase in behavioural difficulties in children starting school. We certainly found that in Finland, where they had much higher levels of early-uptake childcare. Do you think there is a link between being detached from your primary carer at a very young age, and the kinds of behavioural and mental health problems we are seeing further down the line?  

              Claire Coutinho: First, I will just bring out two separate things that our childcare system is trying to do. One is to enable labour market participation: the 30-hours offer from nine months is for working parents, which is enabling those parents to go to work; for them to be satisfied and happy in their careers, which is also a positive thing for children and families; and to earn more income. In terms of educational outcomes, the biggest benefits are seen for disadvantaged children and that is where we have a different offer, which is the 15 hours for disadvantaged two-year-olds, and the universal element for three to four-year-olds as well. I think we have that balance right to enable the best outcomes for parents and children.

Q258       Miriam Cates: So we are saying that different children benefit from different offers. I completely agree with that.

One of the groups we heard from was Mothers At Home Matter, which campaigns for more support and recognition for mothers who choose not to go to work. Their point would be that all this increased funding is focused on parents who want and choose to work, particularly full-time or longer hours. If we are saying that different children benefit from different offers of childcare, why not make the policy a much more flexible one? For instance, through vouchers or family credits, so that families can choose how to spend their entitlement, whether through formal childcare, informal childcare or working fewer hours. Would that not be a more pro-choice policy that would also suit a whole range of families, rather than just the narrow group of families or the small percentage of mothers who say they want to work more hours?

              Claire Coutinho: There are parts of the system that have that flexibility. If you look at tax-free childcare, for example, parents can recoup some of the cost of their childcare at 20%, up to a capped amount. That offers parents choice. The thing we have to look at, though, is that the childcare system, infamously, is trying to do different things. It is trying to enable labour market participation, so we have elements of the system that are targeted at that. It is trying to improve educational outcomes, particularly for disadvantaged children, so we have elements of the system that are doing that. It is also trying to improve cost of living. All those ambitions are laudable and we want to commit to them, so it is important that the system does all those things and has that flexibility to tailor within it at the moment.

Q259       Miriam Cates: I dispute that; I think it is a very inflexible offer in the way that it is term-time only, 9 am until 3 pm. The IFS study suggested that an increase in formal childcare offer does not make much difference to the way parents choose to work and how many hours they choose to work because it is inflexible, so I would slightly push back on that.

I have a final question. Another group we heard from was the Gingerbread charity, which supports single parents. It talked about how the change to the work requirements, and now the potential of parents having to go back to work from their child turning nine months old because the offer is there, have a detrimental impact, particularly on single parents. Let’s say they have been through a relationship breakdown, and a young child has experienced early childhood trauma and perhaps adverse childhood experience. They as a single parent will now be compelled to return to the workplace and to put their very young child in a formal setting, which may not be the best for that child, and they are now at an increased disadvantage from being a single parent than they were before. Do you think that—again, this is about being flexible enough—it is fair to single parents? Should more attention be given to the increased need for a parental bond in those early years in that situation?

Claire Coutinho: I am absolutely a champion of single parents and I know you are familiar with the private Member’s Bill on child maintenance that I was bringing in as a Back Bencher and worked with Gingerbread on. I think it is vital that we support them.

What we have done through the universal credit changes is very positive in terms of people seeking childcare, making sure they can get upfront payments and upping the maximum allowances by a lot to ensure that they have the funds they need for childcare. Then there are the changes that you mention on conditionality for the earliest years—instead of seeing a job coach every six months, you have to see them every three months. That is not taking you hugely away from your child in those earliest years.

For parents of three to 12-year-olds, the conditionality on work is an increase to work 30 hours to align with the childcare offers. That is, in part, because the welfare system is designed to reduce poverty and we know that having parents working is the best way to do that. It is enabling parents to have a better income and to be able to give their children a better life.

Q260       Anna Firth: Good morning, Minister. Welcome to our Committee. We are now moving on to the low take-up of childcare entitlements. You mentioned the provision of tax-free childcare and parental choice. We heard mixed evidence on this and on whether the low take-up means it should be phased out. Why do you think there is still a lack of awareness and a misunderstanding about tax-free childcare among parents, and what is the Department considering doing to increase take-up?

Claire Coutinho: That is an excellent point. Generally, across the entitlements, we have pretty good take-up. For the disadvantaged two-year old offer, the take-up is 72%, and for the universal three to four-year-olds it is 92%. Tax-free childcare did not have the take-up that was expected in its initial years, but it has increased a lot recently. From memory, in September 2019 we had 172,000 families using tax-free childcare, but as of 2021-22 we have 512,000 families using tax-free childcare.

Q261       Chair: Is that across all ages?

Claire Coutinho: I believe the 512,000 is across all ages. You are right to point out the difference, because I think that, for nought to four-year-olds we are projected to have 80% of eligible children use their tax-free childcare by 2024-25. I am hoping those parents, as their children progress up the ages, will continue to use the benefit of their tax-free childcare.

We identified previously a number of problems. One was the amount of providers who were registering to use tax-free childcare. We worked with brilliant organisations such as Coram, PACEY, Barracudas and Day Nurseries, which I think have reached about 13,000 nurseries to advertise the take-up of tax-free childcare. We also have a platform called Childcare Choices; we have been working with people like Netmums to ensure that we are advertising to parents the availability of those schemes, so that they can use them and get the benefits. We have seen a decent uptake but, of course, we have more to do.

Q262       Anna Firth: Thank you. That is very helpful. Can we move on now to the sufficient supply of childcare? We heard powerful evidence from a number of witnesses about the number of childminders who have left the sector—10,000 left between 2015 and 2019. Some 19% of the local authorities that provided us with more up-to-date evidence state that a quarter or more of childminders in their area are at risk of leaving the profession. You have touched on this, but how are you working with local authorities to ensure that there is a sufficient supply of childcare across England? Do you value the childminding sector, and what are you going to do to manage those shortages?

Claire Coutinho: That is an excellent question. On sufficiency of placements, local authorities feed information into us but, because we are expanding the entitlements, as Susie mentioned, we are going to talk to all local authorities about sufficiency in their areas, as well as deliverability and the different challenges they face.

You are quite right to point out that lots of childminders have left the market. That is something I am personally very interested in. I have gone to shadow multiple childminders, and we know they get brilliant educational outcomes. The home-based care they provide is really very special, and people get quality outcomes. The flexibility they can provide for parents can be extremely welcome as well. There are a number of things we are trying to do to look at that, but it is an area we care about deeply.

First, as you will have seen, we have a new grant incentive for people registering, to ensure we are helping people to come into the sector. We know there are some upfront costs that can provide challenges. I want to look at the value that people feel in the sector, to make sure that it is attractive to people and that they feel valued. Some of the information we have seen from parental surveys is that parents themselves sometimes do not understand the quality of provision by childminders, and their instinctive thought is of nurseries. There is work to do to communicate to parents the brilliant work that childminders do.

Q263       Anna Firth: The final question from me is, how will you ensure that the benefits of expansions in the free-hours entitlement are felt equally across the country, including, obviously, in deprived areas?

Claire Coutinho: This is the work we are going to be doing with local authorities as we go into every area to understand the challenges they face. Susie might want to talk a little more about that work and how we are going to do that.

Susie Owen: We will be contacting every local authority in the coming months to do a full review of sufficiency in their area. We will also, internally, make sure we provide information around the demand that is likely to be seen in local areas, so that local authorities have that information, and that will obviously look at income distribution and so on. As we move closer, we will want to make sure that we reach the right communities to get that take-up and drive it up, and that parents are aware of the offer in every area.

When we rolled out 30 hours, we spent a lot of time making sure we targeted the right communications to parents so that they knew how to access the offer and when they needed to sign up for it. Often that was targeted to communities that we knew might have less information available to them than others. That is what we will be doing ahead of each roll-out date to make sure we understand who is accessing those offers through the HMRC system, which parents will use to access them. We will be able to get regular MI and information about who is taking that up, so that we can target communications accordingly.

Q264       Anna Firth: This is a question about the supply side. On the engagement you are going to do, are you going to contact individual providers and take feedback from them, including childminders?

Susie Owen: Local authorities will be responsible for managing their local markets, and we would expect them to be in contact with all their provider base. We know from the 30 hours that, where local authorities had really strong relationships with their provider base, that made the biggest difference in ensuring that supply was available. The assessments that I talked about will allow the Department to consider what further interventions are needed, whether that is by type of provision—for example, childminders—or particular geographic areas, to give that support to make sure those places are there.

Q265       Anna Firth: I’m sorry to press you on this, but I went to a number of childminders and nurseries in preparation for this inquiry and they felt they had not been adequately consulted. Are you going to say to local authorities, “We know how many providers you have in your patch. You have only given us feedback from a quarter, and that is not adequate. We need to at least have feedback from the majority”?

Claire Coutinho: That is exactly what we will be doing. We will also look at contracting support to go in where we are worried about a local authority for exactly those reasons. They can go in and work alongside the local authority and their providers to make sure that we have that full picture and we know where the risks of supply might be.

Q266       Mrs Drummond: Moving on from that, childcare is very much organised around school term times and the working day, but of course there are people who do shifts, particularly healthcare workers. They work unsociable hours and find it very difficult to access childcare, particularly if they are a single parent who does not have anyone else at home to look after their children. Does the Government have any further plans to develop out-of-hours childcare provision?

Claire Coutinho: That is a really good question. I grew up in an NHS family myself, so I am very familiar with the unsociable hours they work, as do many families who work in different sectors. In terms of flexibility, one area we are focusing on is holiday provision. As part of the spring statement announcement, we announced £289 million to improve the wraparound provision with schools. We are going to explore how we can best do that through a series of trailblazers. In addition, we have the holiday activities and food fund, which, in some areas that I spoke to and visited, is working in tandem to improve the wraparound school offer. That helps with expanding the different hours around the school day.

In terms of extra flexibility, the point raised earlier about childminders is really important because they can provide additional flexibility. I have been quite interested in the home childcarers market, which is worth considering in terms of different hours. But you are absolutely right to point out that this is something we should look at to make sure we can support parenting. I am not sure whether Susie would like to add something.

Susie Owen: Just that the new entitlements will be able to be used between 6 am and 8 pm with providers. Again, to the earlier point, the childminder market is really important for offering that flexible care throughout the day. We will make sure, through the assessments that we are doing with local authorities, that we understand what that level of provision is, because we recognise that it is not always available in the core hours. The entitlement hours can also be stretched across the full school year; they are not restricted to term time only.

Q267       Mrs Drummond: Are we talking about any increase in funding for children who will have to be looked after at night, for instance?

Claire Coutinho: That’s not something that I have seen. However, if you think about the way that we fund entitlements, that is money that is going into the system, so that supports providers to potentially provide additional support around that. Not all of the funding that they get is for those entitlements. However, we will keep a close eye on it, because I do think that flexibility for parents is really important.

Susie Owen: Where a provider—so, a nanny or a homecare—is registered with Ofsted, parents can use tax-free childcare and the childcare element of UC to provide financial support for that out-of-hours care.

Q268       Chair: We are seeing a situation in which the Government are moving from purchasing about 50% of the childcare used by the system to up to around 80%—as heard in some of our evidence. It is a big investment by the Government in this space. In that context, does it really make sense for private and voluntary childcare settings to be paying business rates? Is that not a waste of everyone’s time, effort and money? We are putting money in from the public sector, then reclaiming it back for the public sector through business rates. Have you, Minister, had any conversations with the Treasury about that money-go-round and whether it is time to call it a day on business rates for what is, at the end of the day, education being funded by the state?

Claire Coutinho: Well, look, I think this is a really interesting question. It is one that has come up for me and that we’ve explored. It is worth saying that the Treasury has obviously put forward a variety of business rates discounts over the past couple of years, including a freeze on the business rates multiplier, and it has small business rates relief and charity business rates relief. Some of those will apply to different providers in the early years sector.

When we look at the cost to providers—we do do that sort of analysis that I talked about earlier—we have a section for “other”, which includes administrative costs and utilities, such as their energy costs and business rates. That comes out at roughly 10% of their overall costs, so business rates would be a portion of that. That is then factored into our funding rate. Therefore, that is looked at, and we try to fund to accommodate for increases in business rates, or anything else that fits into that “other” category.

Q269       Chair: We have heard from independent providers that are seeing 40% or 50% increases in their business rates bills. Obviously, you referred to energy costs as well; as we know, everyone is seeing substantial increases in their energy costs. How does a 7% increase in funding cover those kinds of increases? Would it not be simpler to say that, actually, the whole sector should be treated as one when it comes to this issue?

Claire Coutinho: First, I would just say that the business rates costs for those providers are generally far less than 10% of their overall costs, so if they are facing a large increase, it will not be a 40% increase in their overall costs. The biggest factor in their costs will be staffing. Again, that is looked at as we come up with the funding rate.

I think that the way that you can address business rates is by trying to provide a relief through the Treasury and the tax system. We have had that, in various ways, as I laid out before, over a number of years. Or you can try and put in extra money through the funding rate to address the higher business rates costs. At the moment, that is what we do.

We look at the business rates costs and we fund them through the DfE entitlements, which is just a different way of doing essentially the same sort of cash-flow task. Susie might want to come in on the different technical ways of operating, depending on whether a provider is in the private and voluntary sector or otherwise.

Susie Owen: All occupiers of non-domestic properties are assessed for business rates. That includes schools, so schools are subject to business rates, as private providers are—

Chair: But you pay them for them.

Susie Owen: As we do for early years. We pay them through a slightly different mechanism for schools. That is paid through the DSG schools block for schools, but as the Minister has already said, we take into account the rates that private providers will pay when we assess the costs of delivering that unit of childcare in a setting, and we cover those costs. Therefore, we do cover the costs for schools, as well as early years providers, but we deliver that in a slightly different way because of the way that we pay that specific funding to schools.

Q270       Chair: The other issue raised, again by a lot of the independent providers in this sector, is that of VAT. Clearly, there is a massive expansion here regarding childcare. People want to be able to provide more places, but if a school decides to expand its childcare provision, it won’t pay VAT on the building costs and so on—or it can fully reclaim it. The independent nurseries cannot do that; they cannot reclaim VAT. Are the Government considering full relief, or at least a partial exemption, for independent providers to ease the financial pressures they are facing and to incentivise the investment in capacity that we all know is needed?

Claire Coutinho: One piece of work we will do as we expand entitlement will be talking to all the different areas and types of providers to see what they need to ensure that deliverability. Some of that will be the expansion of premises—for example, for existing places—and we will look at the best way we can support people to do that. Overall, that is what we are trying to do; we are trying to look at the overall system. As I said, the other section of costs will include things like VAT costs, and we do factor that into our funding rate to make sure that people are suitably funded. As we explore the delivery of the expansion, we will be looking at all these kinds of things to make sure, in the best possible way, that we can help providers to provide those places.

Q271       Mrs Drummond: Going back to the workforce, which Anna touched on, there is a recruitment and retention issue for the early years. Witnesses have spoken about low wages and a lack of career progression. People can obviously get better jobs elsewhere—jobs that have regular hours and so on. What are you doing, then, to ensure that all childcare settings have the workforce to develop the expanded childcare entitlements?

Claire Coutinho: It is certainly a challenge. When I go and talk to different providers—we have heard a bit about childminders, but this is also the case when you go and talk to nurseries—finding the right staff is certainly one of the first things they will raise with me. We now have an opportunity, in this expansion, to look at this very carefully and to make sure we are getting the right people coming into the sector.

There are a number of things I am interested in. One is, again, making sure that people are aware that this is a highly valued sector and an attractive sector to work in. It’s a question of making sure we have that robust communication around it.

It’s also a question of looking at things like progression, the various qualifications and some of the barriers to those qualifications, as well as at routes into different areas—routes into, for example, some of the higher-level qualifications. That is a piece of work that we are going to do. We are working very closely with the sector, in terms of staff, providers and different parts of the system, to try to make sure we get this right, because it is going to be absolutely fundamental.

Q272       Mrs Drummond: We heard from childminders, some who were with an agency and some who weren’t, and both groups had very different angles on it. They also laughed about the £600 they were going to get to set up; they said that that is not nearly enough and doesn’t really reflect what they need to do. So have you got any more plans? Are you listening to them to see what else you can do to try to make sure they can set up their businesses successfully?

Claire Coutinho: In terms of childminders specifically, we have the grant, which we talked about before and which will help with some of the up-front costs. Also, the registration period is something I am interested in. Sometimes it can take quite a long time to register, which might be because of the local authority checks or something like that. So I am keen to look at what we can do to make that registration period quicker where possible.

One of the interesting things we have here and see in other countries as well is the challenges around childminders using their own premises. I was speaking recently to a French Minister, for example, and the French have a “maison maternelle” offer, which means that childminders can operate on non-domestic premises, which is interesting and, I think, worth exploring. One of the challenges we hear about from childminders leaving the sector is that it can be quite a lonely profession. So I am very keen to look at where some of those things can help people to set up a business that is sustainable and attractive for people to work in.

Q273       Mrs Drummond: And landlords are often not allowing people to set up. That applies particularly to local authorities, interestingly enough. Some local authorities are not allowing their tenants to set up a childminding business.

Claire Coutinho: That is something that I have heard as well and am very keen to explore.

Q274       Nick Fletcher: Thank you, Minister, for coming today. I am concerned, as other members of this Committee are, about the bonds that might not be made between parents and children, especially when the children are going into care so much earlier. But it’s more than that: we are actually encouraging that to happen. We are also reducing the ratios—from 4:1 to 5:1. It’s not just me who is concerned about that; people within the profession are concerned about it. What can you say to those people, and to me, to allay those fears?

Claire Coutinho: First, it is really important to say that the ratio is not mandatory; it’s a flexibility for providers, so it won’t be that providers have to use the new two-year-old ratio, which is going from 1:4 to 1:5. I have met a number of providers who have actually said, “You know what? That’s not going to work for my setting,” which is absolutely fine. It does bring us in line with international peers. It is worth saying that, actually, we did a consultation of providers, and I think about 28% said they were very likely or likely to use it. Often they will talk about times where, for example, staff might want to go off on training or a lunch break or pick-up. It is about flexibility within the day, as opposed to necessarily a steady state.

Overall, the important point is that we trust providers—we trust them to use their judgment. I think having an additional bit of flexibility will help them to maintain their provision in the best way that suits them.

Q275       Nick Fletcher: Within the Department for Education, we are always trying to reduce numbers in classrooms. Private schools do well because they have a lower number of children in their classrooms, yet in the most formative years we are actually going the other way. If you asked me whether I would want my child to have 20%, 25%, 50% or 100% of somebody’s time, I know what I would go for. I do think that we are going to have problems with this.

Will we look at this over the coming years to see what issues this may create? If it is having an adverse effect, can we come back to this, say “Yes, we were wrong to put children in care at nine months old and wrong to increase the ratio of children to staff,” and reverse these decisions if they are wrong for the children?

              Claire Coutinho: Educational outcomes are paramount to what we are trying to do to improve children’s lives and make sure that families’ lives can work well so that they can support their children. That is absolutely at the heart of what we want to do.

In terms of that ratio change, there are similar ratios internationally, which operate safely and maintain the quality of provision. It is worth saying that we have very, very high-quality provision in this country already. That is something we can be incredibly proud of, I think, and it is down to the work of everyone within those professions. But, absolutely, educational outcomes are key to what we are trying to achieve.

Q276       Nick Fletcher: So you will look at it.

              Claire Coutinho: As we always do with anything to do with education, we like to look at the effects of everything that we put forward. Would you like to add anything, Susie?

Susie Owen: I will just add that we referred to SEED earlier, but the Department is also running a new cohort study called Children of the 2020s, which will be tracking children from even earlier than SEED. Studies like SEED, and EPPSE before it, allow us to track these changes over time.

From recollection, with SEED and EPPSE it has been quite hard to draw a causality between ratios and outcomes. Lots of people have tried to look at that, and it is quite hard. It is the quality of the care that the individual is able to provide that makes the biggest difference. We will keep tracking it through this new study, which will enable us to take a much broader view of what is happening in settings.

              Claire Coutinho: It is worth saying that this is about providers being able to make their own judgments. We went to look at different countries that have wider ratios. Sometimes, when they have a particular cohort of children, they might have a tighter ratio—if they have a child who has special additional needs, for example—whereas if they have a different cohort of children, they might have a slightly looser one. This is about trusting the judgment of providers to be able to do the right thing.

Nick Fletcher: We have to be very careful about trusting the judgment of external providers all the time, though, without keeping a check on it. We have seen that with RSHE materials: we have trusted external providers, and it has not gone as it should. I do think we need to keep a really tight, close eye on this, because the children are not going to be able to tell us. They are too young to be able to speak to us; we are only going to be able to tell what has happened from the outcomes. If the outcomes are negative, we need someone to jump on it straightaway, because it will cause huge problems later on in life if we get this wrong.

I really do believe that we ought to be doing as much as we can to help families and parents to be able to look after their children and do what we can with that. I understand that there are careers out there—I understand that—but I think having children is the most precious thing that we can ever do as parents, and I think we really ought to be looking at doing the best that we can for them.

Chair: You mentioned the ratios, and perhaps doing things differently for children with special educational needs. I want to bring Caroline in on some of the special educational needs-focused areas.

Q277       Caroline Ansell: Thank you, Chair. There are a number of areas: one is around the early identification and assessment of those children who require additional support. Other elements will rest on best practice and the language model being integrated into settings; the Coram review and the seeming paucity of places in local government; and some questions around the fund and the time it takes to access funds for the settings that provide that additional care.

To echo the comments of colleagues, the support that we give to families is of mission-critical importance to the outcomes of those children. That partnership with early years education is obviously really important. Possibly it is nowhere more significant or important than with those children with special educational needs. I am sure it will be a shared concern that the inquiry has highlighted some delays around assessment for these children. In part, that is around assessment delay by specialists. So my first question is: what measures in the most immediate term and in the longer term are you bringing into play to ensure that these little ones can get the specialist interventions that will help them to fulfil their potential?

Claire Coutinho: This is an area that I am very passionate about. Alongside the additional investment that we are putting into the childcare sector, we recently set out our SEND and AP reforms. One of the things that that is trying to target specifically is early identification. We are training about 5,000 early years professionals to be SENCOs. We are also working with the Health Department on a specialist workforce strategy. We have already been increasing the number of people who are training to be educational psychologists, which helps with that EHCP assessment; there have been delays in getting those assessments for families of children with special educational needs.

That will be one part of how we improve the access to specialist workforce, but there are other things that are also very important. If you look at some of the biggest rises in need, particularly in those early years, speech and language have been a real challenge—I am sure you will have heard people talking about that. We set out a £180 million early years recovery programme, of which speech and language is a strong part.

We are also going to be working with the NHS on better pathways, as well as setting out a best practice guide as part of our special educational needs reforms. We are setting out three best practice guides to begin with. One of the first will be early years speech and language, because I recognise that this is a challenge that lots of people are facing. We know that speech and language feeds into literacy and ongoing educational attainment, so I think it is really important to get right. One of the other areas where there has been a big rise is in autism; we are, again, working with the NHS on better diagnostic pathways.

Those two areas are really important because they contribute to such a high rise in demand. If we can get them right, there should be more funding available, from different pots, for children with really complex needs. One of the things that I have been concerned about is places for children with disabilities, and particularly with more complex needs.

Q278       Caroline Ansell: I will come on to that momentarily. Everything you have just outlined around specialist provision is very welcome. One of our witnesses, though, highlighted that while specialist provision is very important, one of the issues is that not enough settings are integrating speech and language development into their model. She said we could do something in each setting “rather than putting somebody on a waiting list for a speech and language therapist that might take 18 months to two years.” Is that something that you recognise? What work is being done to underpin that very inclusive and informed practice in each setting?

Claire Coutinho: There are some settings that are doing tremendous work in this area, but one of the things we are trying to improve is the amount of support that is ordinarily available in settings. For example, that best practice guide will be for all providers on exactly what the best interventions are and what the most successful interventions are that they can do for children who are struggling with speech and language. But it is about making sure that you have the right know-how within the setting itself. For example, for our level 3 qualification, we are making sure that SEND is going to be a stand-alone subsection so that people who are working in those settings have the best possible evidence and are equipped to deal with any needs that might arise.

Q279       Caroline Ansell: When is that guidance to be implemented?

Claire Coutinho: We are starting work on the best practice guides this year, and I think, from memory, they will be published by 2025. Along the way, we are still doing lots of work with the early years recovery programme on speech and language and making sure that people have the requisite training and, as I said, the level 3 qualification. I think that change is coming in in 2024—Susie might correct me on that—and it will have this stand-alone section on SEND as well. Do you want to add anything further on that, Susie?

Susie Owen: I was just going to add that we reformed the learning and development requirements within the EYFS—early years foundation stage—framework in 2020, I think, and that had a specific focus on speech and language. That was, as you suggest, to ensure that every setting understood the importance of speech and language, and that ran through all the expectations of the curriculum requirements that we have put in place. We have supported that with implementation support to all settings, and we now have online child development and freely available e-learning, which has had really good feedback from professionals. We have, through the EY recovery programme, already trained a number of professionals through the professional development programme, which, again, had speech and language at its heart. That will eventually be rolled out to an additional 10,000 providers in the next two years.

Q280       Caroline Ansell: On that roll-out, the witness also talked about the funding available through family hubs for speech and language intervention, which only kicks in when the child is three to four years old. The witness said that the funding available for the home learning environment “is literally after those 1,001” critical days. She said, “I guess it is an error, but…an error that needs to be rectified quickly.” What would you say to that concern and that seeming oversight?

Claire Coutinho: As Susie will attest to, I am passionate about the home learning environment. It actually has an even greater effect than early years education settings, and children spend the majority of the time with their parents and families. I think it is really important to get this right. We do have a programme called “Chat, play, read” as one element of the home learning environment, but I am very keen to explore what more we can do. Looking at what has happened post pandemic, there has been a slight drop-off in terms of some of those really high-quality home learning activities, whether that is reading with your child or other things like that. I am very keen to explore what those challenges are—

Q281       Caroline Ansell: I don’t think any of us would dispute the value of investing in that home learning environment. In fact, it is probably quite the contrary—we are strong advocates for that. But if we are opening up places and believing that there is a quality education to be had for these tinies with special educational needs in an educational setting, why would there not be funding there to mirror the funding available for home learning?

Claire Coutinho: There is financial support available for the support that children with special educational needs can get in their settings, for example through things such as the SENDIF.

Q282       Caroline Ansell: Is that for under-threes?

Claire Coutinho: You can use that for under-threes as well. The fund sits at a local authority level, and they can use that on—

Q283       Caroline Ansell: Because that would answer the challenge made by the witness—if it was the case that the funding could be accessed for under-threes in their education setting.

Susie Owen: I think the specific programme that the witness was referring to came out of the covid pandemic, so it was deliberately targeted at three and four-year-olds, who would have been babies during the pandemic. We completely agree with you that the home learning environment is important from conception onwards, but that particular programme was to target the children who were babies during the pandemic. However, also through the family hubs programme, we are funding parenting programmes specifically targeted at the under-two cohort, which will also support—

Q284       Caroline Ansell: So will post-pandemic funding be available for speech and language for under-threes with special educational needs in their educational setting?

Claire Coutinho: I think Susie is talking about the family hubs model; I am talking about the SEND inclusion fund, which sits at the local authority level. It means that local authorities can distribute funding for emerging or moderate SEND, which they could use, for example, on something like speech and language.

Q285       Caroline Ansell: So they have discretion and flexibility and some autonomy.

Claire Coutinho: There is discretion based on what is happening in the local authority area.

Q286       Caroline Ansell: Excellent. That is very good.

I have one last quick one on the Coram review. The witness said that one of the challenges of the fund is “how long it takes for additional funding to come through”. She said that they have found that “it might not arrive at the setting in time for them to be able to use it” in the setting to provide the care that they had previously needed. Again, is that something you are aware of around the fund? What adjustments and flexibilities might you be looking at? I understand that it is under consultation.

Claire Coutinho: I think it is really important to get this right. I do recognise that the time it takes, for example, to get an EHCP can often be longer than the time that the child is in that setting, and we need to try to make sure that there is a way of getting people the right support but in time for them to use it in that early years setting. That is something that I am very keen to explore.

We have three different ways of providing additional funding for children with special educational needs and disabilities: the disability living allowance, the EHCP process and the SEN inclusion fund. But I think it is well worth looking at how this is functioning to ensure that we are providing the best possible early years education for children with SEND. That is something that I am very keen to look at.

Q287       Caroline Ansell: I think it was the inclusion fund. Because it had taken such a long time to achieve the plan, applying to the fund meant a further time delay. The little ones were then progressing to school, so the nursery—the early years setting—essentially did all the running on assessment but was not the beneficiary of the finances that sat behind it.

My very last question is about the finding that only one local authority in five has enough childcare places for disabled children. What are your thoughts on that?

              Claire Coutinho: This is hugely important. One of the things that we are doing for the first time as part of the SEND and AP reforms is getting each area to set out local inclusion plans, which will cover all the provision for children with special educational needs and disabilities from early years right on up to post-16. That will give us an assessment of what is needed in particular areas, but they will also then have to set out a strategic plan of how they can meet their need.

Alongside that, the work that we will be doing as part of our childcare expansion involves talking to each local authority area about what they need to deliver. I think it is crucial that we ensure that children with special educational needs and disabilities are part of that process.

Q288       Chair: To follow up on that point about the importance of dealing with SEND need in the early years, I have a situation in my own constituency in which an assessment centre linked to one of our specialist primary schools was closed because the primary school needed to expand its primary classes to meet need. There was such demand for primary places that we then lost our very valuable specialist provision for the early years.

The ramifications of that on other early years settings around the city are substantial. The council is now, I think, looking to put new provision in place. Is there anything that the Department can do to monitor the provision of specialist places for the early years and ensure that we do not have gaps such as those that seem to have arisen in the case of Worcestershire or south Worcestershire for the time being? I know that there are plans to try to fill the gap, but in the meantime there are children expecting to be able to get a nursery place with specialist support who will not. That is a real concern.

              Claire Coutinho: I think the key to this is ensuring that we have the right data and ensuring that we are regularly reviewing that. The local inclusion plans will be part of that process of local areas feeding into us in terms of strategic assessment of the needs that they have. For example, they would show that you had this need for specialist early years provision in your area. We are also doing that immediate piece of work at that local authority level. All those things are key to ensuring that we are monitoring what is happening in terms of need in local authority areas and then we are scrutinising local authority plans to make sure that they are delivering to meet that need.

Q289       Chair: Is any capital funding available to support councils in meeting that need? Obviously, with the SEND plan, the Department announced a large slew of capital for special schools and mainstream bases in schools. Is any of that available beyond the schools sector to support provision in the early years?

              Claire Coutinho: Unless Susie knows off the top of her head, I would have to check that and come back to you.

Susie Owen: We will be considering what capital support, if any, is needed to support the expansion of the entitlements, and obviously a key thing that we will be looking at is access for SEND children. We will share further details of that in due course, but on that specific issue I am not sure that we can confirm that point.

              Claire Coutinho: We can always write to the Committee.

Q290       Chair: Thank you—I appreciate that.

Just before I hand back to Anna, the other point you mentioned a number of times on the recovery funding was about the NELI programme. The Committee has certainly heard a lot of positive feedback about it and about the investment that went on. In other areas of DfE policy, recovery funding is gradually stepping down, to be effectively replaced by pupil premium funding when it comes to tutoring, for instance. Clearly, in this space, the early years pupil premium is significantly less than the school pupil premium. What is the plan for how the good learnings from recovery funding can be applied in the future? How will that be funded?

              Claire Coutinho: The majority of the early years recovery fund has been about training and qualifications. It is about making sure that we have experts and mentor schemes, for example, trying to support people to get the high-quality progression that we have heard a lot about, getting the right specialist knowledge in the sector and dealing with some of the fallout from the pandemic. As we go forward in rolling out the expansions, we are very keen to look at workforce, and particularly at how you can get people the right qualifications and get that progression right. I think that that is where a lot of the effort will be. Susie might want to add more detail.

Susie Owen: Yes. In the early years, a lot of the focus in the recovery programme was on building and helping to support the infrastructure that provides that practice improvement, which we know was less mature than in schools. For example, we are funding a number of stronger practice hubs, which are designed to be leaders in their region, to support high-quality practice that can embed and sustain beyond the period of funding. It was about how we provide that system-led support to providers and provide that ongoing offer. As you say, we will obviously need to consider the early years pupil premium in the context of the roll-out.

Q291       Anna Firth: Back on childminders, I have two brief points. First, following on from Flick’s questions about change of use certificates, one of the childminding agencies, tiney, said that one of the main reasons deterring former childminders from returning to the profession is the need to get written permission from their landlord or local authority before they can use their home as a childcare setting. Given that you agree that we want to encourage more childminders and keep the ones we have, and given how valuable they are, have you engaged with the Department for Levelling Up, Housing and Communities on this matter? If not, do you plan to?

Claire Coutinho: I am keen to explore this area. We have looked at lots of things that are inhibiting people from entering the profession. Your point about social landlords has been raised with me, as has the length of time it takes to get the local authority checks in place. That is something that I am very keen to explore, alongside other parts of the registration process, which can take some time, to see what we might do to help people and ensure that there is the right level of checking for quality and that the right people are coming into the system, while also ensuring that it is not too onerous and does not take too long. That is something that I am definitely keen to explore, and I have heard the point about social landlords before.

Q292       Anna Firth: It might make a lot of sense to tie up with the Department for Levelling Up, Housing and Communities.

Claire Coutinho: Yes. We are in regular contact.

Q293       Anna Firth: Fantastic. Secondly, and finally on childminders, we heard evidence about the early years foundation stage framework, which you will recall, when it was first introduced in in 2008, drove thousands of childminders out of the profession, because it was so inappropriate and so onerous, and required so much box-ticking and paperwork for childminders, many of whom are sole traders. The spring Budget announced a consultation on possibly creating a childminder-specific early years foundation stage framework. Could you expand on your Department’s role in this, where you are with it and what your plans are?

Claire Coutinho: Yes. Before the summer, we will be setting out a consultation on changes that we are going to propose for the EYFS, which will include changes for childminders. Generally, when we talk to childminders we get quite a positive response to the EYFS. I think people like the clarity of the framework, and it also helps parents to understand that the quality of outcomes that childminders get are as good as, for example, nursery settings. Having that professionalisation has helped in making sure that people can see the sector as quality and as valuable, which it completely is—I think something like 96% of childminders are rated good or outstanding by Ofsted. They are providing incredibly high-quality education.

There are other ways of registering to do home childcare, for example, that are less onerous and not subject to the EYFS. If people want to have a caring side of the profession without the EYFS, there is the option to do that too when registering, but in the consultation we are trying to make sure that we have the right flexibilities for people to thrive in the profession, while maintaining the quality of education that they provide. Susie, would you like to add anything?

Susie Owen: A key focus of the EYFS reforms that we brought in a couple of years ago was to reduce the burden on providers, including childminders—so, being explicit about what was required and what was not required, because we know that this custom of lots of paperwork and so on has grown up, which is not something that we require of childminders or settings. We have done a lot of myth-busting work around the expectations of Ofsted, removing that so that the framework becomes useful to childminders—as the Minister said—but gets rid of the unnecessary bureaucracy that some providers were choosing to do.

Anna Firth: That is very good news. The guidance is excellent; the onerous paperwork is not.

Q294       Miriam Cates: Has that worked, though? We have lost 70,000 childminding places in the past 20 years, I think, and there is no sign of the trend being reversed. Is it widely understood that there has been a reduction in bureaucracy?

Claire Coutinho: There are a few things. First, when I have been talking to my international peers, this is a challenge that lots and lots of countries face, so it is not peculiar to our system. Secondly, as we explored with childminders why people have been leaving the profession, different things came up, and one of them was, for example, that it can be quite a lonely profession, which I talked about earlier. I am keen to explore what we can do from looking at different countries’ models and how they operate.

Some of that was about things like paperwork and, as I said, we have taken some steps on that. It is important, too, that we dig into why people are leaving the profession, while making sure that we try to mitigate that, whether that is bureaucracy and needing extra flexibilities—which we will look at in the consultation pre-summer—or any other factor.

Q295       Miriam Cates: One of our previous witnesses suggested that it might be because the state was in effect fixing the price, and because parents cannot top up, which limits their earnings.

Claire Coutinho: There is a mix of use of entitlements and people who do not use the entitlements in the childminder sector. On top-ups, they can charge top-ups for some things, but parents do not have to pay them. Susie?

Susie Owen: Obviously, a childminder cares for fewer children, and there is the expansion of the entitlements and the funding rates that we will be putting in place for the younger children. When you look at average parent-paid fees for younger children, the rates that we are proposing should be paid are significantly higher than the average parent-paid rates, so hopefully, as the Chair referred to earlier—when he spoke to childminders and explained what the rates will be—that will help them, and having more funded children on their books will be good for them, compared with the current situation.

Q296       Mrs Drummond: On early years qualifications, you mentioned that you have revised the level 3 qualification to include special needs and everything like that, and there are several ways of getting into childcare. Will you talk about that? Also, we have had evidence that the minimum GCSE requirement for the level 3 qualification is preventing individuals from joining the profession, so will you expand on that? Why do we have the maths GCSE requirement? How does it support individuals to provide early education and care to young children? Personally, I think they should have all the qualifications that they can get, but let us hear your view.

Claire Coutinho: Yes, we are changing the level 3 criteria. As I mentioned, we are making special educational needs a stand-alone sub-criterion, and we are having better focus on practitioners’ need-to-know, looking at the NPQ-type format as well.

On the maths qualification, as many in Committee know, I am a huge fan of maths personally and a big advocate of better maths understanding and of better maths everywhere, but from talking to providers, it presents a real barrier to excellent, expert childcare professionals who have their level 3 qualification but cannot count in ratios. When we look at the pedagogy of early years numeracy and mathematics, it seems to be indifferent to the GCSE qualification or the level 2 functional maths qualification, so I am keen to explore what we can do to make sure people do not face barriers to getting that higher-level qualification when they are perfectly capable of delivering on the skillset needed for that qualification.

We also need to make sure that we support the pedagogy of early years numeracy, which is important. Some of our work in the early years recovery programme is on early years mathematics, looking at it specifically as well.

Q297       Mrs Drummond: So that could be one strand to doing maths to 18 as well, if people want to go down a different route. Obviously, they are not all going to do A-level maths, so perhaps they could do childcare or maths relevant to young people, and that may increase the status of early years, too.

Claire Coutinho: Exactly, and if you look at understanding the building blocks of numbers and how they can be combined together, and things like that, that is a very specific skill that we want to ensure that all our early years practitioners have. That is some of the work that we have been doing with the early years recovery fund.

Mrs Drummond: I think Nick will go into more detail.

Q298       Nick Fletcher: The Education Policy Institute has highlighted that there is not enough evidence to understand what the optimal mix of qualifications should be for the early years. What evidence is the Department using to determine the level of qualifications?

Claire Coutinho: This is a really good question. I am sure Susie will have things to add, but we have obviously been putting forward qualifications such as the level 3 qualification, which we adapted to make it an early years educator qualification—I think in 2014—and we have been trying to get people to train on the graduate level, as well, and improving the level 6 offer, and things like that.

However, I absolutely think this is the right area to focus on, to ensure that we have the right expertise and the right people in the sector as we now deliver on this expanded entitlement.

Susie Owen: As I said earlier, we introduced the new level 2 criteria back in 2018, in consultation with the sector, and we felt that we needed to bring the level 3 criteria up to date as well. To do that, we contracted NCFE to do a full review of the current level 3 criteria. They worked with stakeholders, academics and professionals in the sector to come up with a series of recommendations, which we then consulted on before Christmas, and the response was published last April. Those will be the new qualifications that the Minister talked about being introduced in September 2024, to allow the training providers time to update their qualifications.

As you say, it is really important to think about that qualification mix. We don’t just think about the qualification mix; as we have said, we also think about the broader skills of the sector and the best way to upskill individuals within the sector, whether through the early years recovery programme or other routes, because we know there are lots of different ways to deliver good-quality, high-quality CPD. As you say, the research and evidence on what makes a really good qualification is often mixed and not clearcut, which is why we don’t just look at the qualification levels required, but also look at the broader support we are providing the sector, to upskill individuals within those roles.

Q299       Nick Fletcher: We have just been to Finland and they have graduates there in their early childcare; they expect them to have a degree. I’m a social conservative—I can’t help it; it’s just the way I think things work best. Do you think that we should be looking at degrees for people to be looking after children, or do you think we should be looking at the experience of people looking after children? Do you think it would be good to bring people who have been mums and brought up their own children into that, and how could you evaluate those skills? I am sure that the best person to look after a young baby is somebody who has probably done it before or been part of community groups, or part of the Girls’ Brigade or Scouts, and has spent the time with children, rather than being in a classroom, ticking a box and learning on Zoom?

Claire Coutinho: I think it is important to get the right mix. Often, when you go and talk to providers, they will talk about their unqualified practitioners sometimes being the most excellent, partly because they have that very real experience—maybe they have had their own children or they have had some other experience that means they are very good at that job.

However, there is also clear evidence that some of the graduate programmes, which we are very committed to, can be very helpful, particularly in areas of high disadvantage, where you perhaps have special educational needs or particular areas where having very expert interventions can make a huge difference. You can see something like that in, for example, our roll-out of NELI and how much this particular intervention has helped—I think it’s roughly three months’ catch-up in speech and language, for example.

I think it’s about getting the right mix of people across the board, but ultimately this is about educational outcomes. We need to make sure we have the right expertise within those qualifications to ensure that we are progressing outcomes and getting the very best outcomes for children. Susie, do you agree?

Susie Owen: Absolutely, and I think the key to your point of that experience being so important is making sure that we have routes that are available in work, whether that is via apprenticeships or through work-based qualifications at level 3 and level 6, so people can come into the setting, be working and using their skills and experiences, and work towards a higher-level qualification.

Q300       Nick Fletcher: There must be a way of quantifying that experience, because otherwise you will isolate an awful lot of good people—good parents who have done it before from this industry—and we desperately need them to commit. Some parents and people just love being with kids. More than anything else, that is surely the most important ingredient to childcare: somebody who actually loves being with children.

Susie Owen: At the moment, 50% of staff do not need to be qualified to operate within the ratios within settings. We have a high number of people in the sector who entered in that way because settings only require a level 3 to work with children and then half the other staff to have a level 2, so we have quite a large number of those sorts of individuals, who are bringing lots of skills and experience into settings.

Q301       Nick Fletcher: If we get somebody in who has no qualifications but has experience, could we work with them through some continual professional development? Will we be able to work not only with people who have all the certificates to encourage their careers, but with people who are literally starting from zero who have the experience but none of the qualifications? Are you going to put that in place to work through?

Susie Owen: Exactly, so having those work-based routes where they can enter as a non-qualified member of staff but, if they so choose, can be supported to do that on-the-job training to allow them to gain those high-level qualifications.

Nick Fletcher: That is fine; I will finish there. Thank you.

Q302       Chair: On this whole area of professional development, one of the big changes the Department has made in the school space is to fund the cost of teachers taking NPQs to progress themselves. That is available for the early years, and it is great that an NPQ has been developed for the early years, but obviously it is focused on the schools and the early years professionals working in schools. Is there any mechanism by which the Department can provide that kind of investment and support more widely to the sector, including to those who work outside the school system?

Susie Owen: The NPQ for early years is available to anybody working in early years, not just in schools.

Chair: I thought the subsidy meant—

Susie Owen: It is fully funded for those not working in schools as well.

Q303       Chair: So if nurseries have a parental leader who they want to train, they can access that, as things stand.

Susie Owen: Absolutely.

Q304       Chair: Interesting; that is welcome. The other area—what we used to describe as the golden thread reforms when I was at the Department—is the early careers framework to provide more mentoring and support to people entering the profession. Is there an equivalent that you feel would work for the early years sector?

              Claire Coutinho: One of the things that we have done in the early years recovery programme is look at an experts’ and mentors’ scheme. I think it is right for us, as we look at the workforce strategy, to work out what exactly the right thing is. Obviously, most people in the early years professions work in much smaller settings, but it is imperative that we ensure progression for them. That seems to be a challenge as well. I think, as we look at our workforce strategy, working out exactly what the challenges are for people and addressing them is the right way to approach it.

Q305       Chair: I think the workforce strategy is going to be absolutely key to this. You said earlier, Minister, that this is a highly valued sector. Some of the evidence that we have heard during the course of our inquiry has suggested that it has not always felt that way. I recognise that concerns that people felt—that, while teachers were being praised for their work during the pandemic, the early years workforce did not feel it had the same level of praise and attention from Government. Of course, part of that was around childminders not being listed as a key worker group in the initial rounds. That is ancient history now. What we need to ensure now is that this sector is valued in the way it deserves. We have talked about the importance of early education and of enabling parents to work. How do you feel that you as Minister for Children can raise the esteem of the sector and ensure that all the investment you secured for this sector as a result of the last Budget can ensure a real step change in how early years professionals feel valued?

              Claire Coutinho: I think this is a really important part of the challenge because the work that they do is absolutely tremendous. I spend a lot of my time going round meeting people, whether they are childminders or are in nurseries or other providers, and it is absolutely fantastic. It is critical for children in those earliest years. I think we are getting a greater recognition in society of the tremendous work that they do—I look at the work done by the Royal Foundation, for example. I was very pleased that we had early years educators at the centre of the spring statement in such a large way.

As I say, there is now an opportunity to work with the sector on creating that esteem, looking at increasing funding, which we are doing, but also career progression for people, so that people completely understand the tremendous work they do. But it is of paramount importance, and it should be said, that during the pandemic these settings were open when lots of others were not. They did a hugely brilliant job in enabling parents to go to work, but also in looking after some of our most vulnerable children. I think all of us would want to put on record our huge gratitude to the sector for everything they have done.

Chair: Thank you, Minister. I said at the beginning that we have a lot of questions to get through and we expected to overrun. You have answered as succinctly as we would have liked you to, and congratulations for completing your first Select Committee appearance. We will not keep it too long until your second one. Thank you for your time and to Ms Owen as well.