Does the Welsh Government need to change its plans for free childcare?

Published 14/09/2018   |   Last Updated 27/05/2021   |   Reading Time minutes

The Assembly’s Children, Young People and Education (CYPE) Committee believes so, and has made a number of recommendations to the Welsh Government regarding the Childcare Funding (Wales) Bill(the Bill).

These recommendations, and the rationale behind them, are set out in the Committee’s Stage 1 report on the General Principles of the Bill, published on 18 July 2018.

The Research Service’s Bill Summary provides a background to the Bill, its aims and provisions and the 30 hours of free childcare for working parents of 3 and 4 year olds policy (the offer) it is designed to facilitate.

All but one of the CYPE Committee members agreed with the general principles of the Bill. Llyr Gruffydd AM (Plaid Cymru) objected to the Bill due to his concerns regarding the targeting of the free childcare provision at working parents only and the lack of a full evaluation of the ongoing childcare offer. These concerns, and others issues raised by the Committee, are highlighted in more depth below.

All Assembly Members will have the opportunity to debate the general principles of the Bill in Plenary on 18 September. The debate will be available online either live or as a recording.

A number of children playing standing around a water trough playing with plastic toys.

The General Principles of the Bill

The Welsh Government had indicated that the Bill would be a purely technical one, with only 13 short sections. When questioned by the Committee, the Minister for Children, Older People and Social Care, Huw Irranca-Davies AM, stated the purpose of the Bill is

…to set up, through Her Majesty's Revenue and Customs, integrating with their childcare service, […] one single national uniform system for delivering the offer.

However, the Bill’s Explanatory Memorandum (EM) stated that the Bill’s ‘primary purpose’ is to

support the Welsh economy, by helping parents, particularly mothers, to return to work or increase the hours they work.

The EM also contained the detail and background to the Welsh Government’s proposed Offer. The Committee felt

Conflating a so-called “technical Bill” with the childcare offer has made scrutiny of one contingent on scrutiny of the other, and has blurred the lines when seeking to establish the Bill’s purpose, effect and general principles.

To improve clarity in relation to the arrangements created by the Bill, the Committee called on the Welsh Government, before the Stage 1 debate, to publish further detail on:

  • what ‘separate arrangements’ would have to be made with the HMRC if the detail of the offer was changed, particularly in regards to the income cap of £100,000 per parent, for eligible households (which the Committee would like to see reviewed);
  • what safeguards will be in place to ensure that HMRC is able to deliver a fully bilingual and accessible system and the extent to which it will be able to signpost parents to other support they will be eligible for;
  • the calculation used by the Welsh Government to determine that 40,000 working parents will be eligible for the offer as it stands; and
  • the level of take up and associated expenditure arising from the childcare offer pilot from March – August 2018.

It also called on the Welsh Government, before Stage 3 of the legislative process, to publish:

  • the results of the independent evaluation of the childcare offer pilot;
  • the findings of its review of the Child Minding and Day Care Exceptions (Wales) Order 2010, in the context that it currently prevents schools from directly providing their own childcare on their premises; and
  • a revised Child Rights Impact Assessment (CRIA), as the Children’s Commissioner felt the existing CRIA was insufficient. As a result, a revised CRIA should consider the Bill’s impact on all children, not just those eligible under its provisions for the childcare offer. The Committee also wants to see a revised Regulatory Impact Assessment should the eligibility criteria for the childcare offer change.

Delivering the offer

The Committee also highlighted a number of issues with the Welsh Government’s proposed childcare offer which the Bill will enable.

A particular concern of the Committee was that the Welsh Government is introducing this Bill and seeking to implement its childcare offer before its own evaluation of the childcare offer pilots has been completed and shared with stakeholders (NatCen and Arad were appointed to undertake the evaluation in August 2017).

While the Welsh Government has yet to announce when the evaluation will be published, it expects full roll out of the childcare offer by September 2020. The Committee urged the Welsh Government to ensure that either through this evaluation, or by any other means it should:

  • assess the impact of the childcare offer on summer-born children and ensure that this data used to inform the shape of the final offer;
  • assess how many providers in the pilot programme are applying additional daily charges for food (which can be up to £7.50).; and
  • gather data from the introduction of the offer in affluent areas, in order to test the extent to which, on an all-Wales basis, the offer is taken up largely by those earning less than the median average salary.

The Committee also calls for the age of ‘qualifying children’ to be kept under review and amended in response to emerging evidence and trends.

The Committee has concerns over the level of childcare provision available to meet the demand that could be generated by the offer. It also heard evidence about the potential impacts of children accessing their early years and childcare offer entitlement in different settings, for example the need for young children to be transported to and from different locations.

In order to counter this, the Committee says the Welsh Government should ‘as a matter of urgency, reconsider the ability of schools to deliver the full childcare offer directly”. It also calls for additional funding and incentives to encourage the co-location of childcare and early years education provision in maintained and non-maintained settings.

The Committee heard that the lack of suitably qualified staff could lead to a lack of suitable childcare provision. Social Care Wales (SCW) calculates that 2,637 extra workers would be needed across Wales for the full roll out of the offer. SCW says this could only be achieved with a 700% increase in the number of childcare apprentices being trained over the next two years or through the creation of an extra 1,100 college places (38% increase) between intakes of 2018-2020 and 2019-2021 (which would mean some staff will not be available until 2021).

Evidence suggested that the workforce deficit is particularly acute for Welsh medium settings and for those with the skills to support children with additional learning needs. The Committee is seeking a detailed response from the Welsh Government regarding Social Care Wales’ calculations.

The Committee is also keen to ensure that the introduction of the childcare offer is not seen by local authorities as an opportunity to reduce their current levels of early years education provision and has called on the Welsh Government to issue revised guidance to guard against this possibility.

Funding the childcare offer

The Committee heard evidence suggesting that the proposed funding model for the childcare offer may result in unintended consequences. In particular it is concerned with the daily fee for food, of up to £7.50, that providers are able to charge parents. The Committee feels that this could be a barrier to access for the most disadvantaged families. It has asked the Welsh Government to remove the right to impose the charge, suggesting an increase of the base rate the Welsh Government pays to childcare providers, currently set at £4.50 per hour, to compensate if necessary.

The Committee has also recommended the Welsh Government undertake a review of the cost/rates of payment across maintained and non-maintained settings for childcare and early years education with a view to increasing the consistency between the hourly rates paid. The Committee heard evidence suggesting that funding for early years education in non-maintained settings might vary from £1.49 per hour to £4.47 per hour. There are concerns that this disparity in funding may mean providers chose to deliver only the childcare element of the offer, at the expense of valuable early years education.

Potential amendments to the Bill

Given its concerns over the Bill and the associated childcare offer, the Committee recommended a number of amendments to the Bill.

Some of these recommendations focused on the eligibility criteria for the offer. These included an amendment that would make the offer available to parents who are seeking work by undertaking education and training linked to securing employment. Another recommendation seeks to enshrine the detail of the offer, i.e. that eligible parents receive the equivalent of 30 hours of childcare in each of 48 weeks in any year, on the face of the Bill.

A number of recommended amendments were focused on ensuring that the Bill would allow the Welsh Ministers to be more flexible in terms of who would be eligible for, and the amount of, free childcare in future.

The Committee has also called for the Welsh Government to ensure that any new, or revisions to, regulations it makes relating to the eligibility for the offer are subject to the super-affirmative, rather than the affirmative procedure as currently proposed under the Bill.

The Committee believes these changes will allow for the better scrutiny and development of the Welsh Government’s plans going forward.

Additional scrutiny of the Bill

Prior to the CYPE’s Committee report on the General Principles of the Bill, the Assembly’s Finance Committee published its report on the financial implications of the Bill on 16 July 2018. The Constitutional and Legislative Affairs Committee reported on the appropriateness of the provisions in the Bill that grant powers to make subordinate legislation on 28 June 2018.

Although not directly related to the Bill, the Equality, Local Government and Communities Committee published its ‘Work it out: parenting and employment in Wales‘ report in July 2018, Chapter 4 of which related to the Childcare Offer. The CYPE Committee has recommended that the Welsh Government accept the recommendations set out in Chapter 4 of that report.

Article by Joseph Champion, National Assembly for Wales Research Service