Oral evidence: Free entitlement to early years education and childcare, HC 912

Oral evidence, 20 April 2016.

Chair

I remind anyone watching that the hashtag for today’s section is “earlyyears”. Welcome to our second panel. Chris Wormald is Permanent Secretary at the Department for Education—Chris, I think this is your last appearance as Permanent Secretary for Education.

Chris Wormald

I think so—unless you call me back! On 3 May, I will be moving to the Department of Health. The Cabinet Secretary has today announced my successor at the Department for Education, Jonathan Slater, who is currently Director General of the Economic and Domestic Affairs Secretariat at the Cabinet Office.

Chair

So I think all the reshuffling has now happened, pretty much across the board? I think we know who everybody is. Do we know Treasury? Anyway, it is good news that every Government Department has somebody at its head and that we know who that is going to be. We will be welcoming you back very shortly after your appointment as Permanent Secretary for Health.

Chris Wormald

Yes, there seem to be quite a lot of hearings on health; I have been looking at the list.

Chair

Of course, we will expect you to be as fully appraised within a week of your arrival as you are about education. Helen Stephenson is also joining us; she is Director of Early Years, Child Poverty and Strategy at the Department for Education. You heard our previous panel; I am sure we will touch on some of those issues. I shall pass straight over to Karin Smyth, who is going to lead off on the questioning today.

Karin Smyth

Obviously, Mr Wormald, the Report is complimentary about the successful implementation of childcare for three to four-year-olds. We are interested in what you have learned from that implementation to help the next stage.

Chris Wormald

Hopefully a lot. I should start by saying that we very much welcomed the National Audit Office Report. We believed that it was extremely timely and it correctly identified where we had made progress—the Chair said something about that at the beginning—as well as those areas where we need to do more and where we have challenges for the future. I will say that a lot during this hearing: we think the Report is in the correct place. It is also timely, because on a lot of the issues under discussion we are making policy on right now. We are consulting on the new 15-hour entitlement right now; we also have big things to do around the new early years national funding formula, and our workforce strategy will be coming out later in the year. We are expecting to be able to feed the results both of the National Audit Office Report and of the conclusions of this hearing into the policy that we are making, a lot of which will then be implemented in September 2017 with the new entitlement. We have looked very carefully at the roll-outs of the previous entitlements in terms of the speed of their take-up, the effects on the market and the models. We will be building all that into our work in developing the new 15 hours’ entitlement, which, as I have said, we are consulting on right now. From September ’16 we will be doing two things. We will pilot the entitlement in eight areas, and we are working with a further 24 areas on specific issues within the entitlement, a number of which have been discussed already with the previous panel. We will take all the learning from that and build it into our final policy, which will be introduced in September ’17. We see the way we will be developing the policy around this as iterative, both from the learning we already have and the piloting we will be doing over 2016-17.

Chair

I am going to have to request that you make your answers a bit briefer.

Chris Wormald

Sorry.

Karin Smyth

We will come back to the workforce later. Do you want to say anything about the lessons learned on the communication of the policy?

Chris Wormald

Yes. We have seen all the evidence that was reported to you and was included in the NAO Report about information for parents. That is something we are concerned about. The recent Bill that went through Parliament tightened up the law on what local authorities have to do around information, including for the first time requiring that it will be online. It is an issue that we discuss with local authorities a lot and there is more that can be done in that area. On the existing entitlement, as you said, take-up is very high. One way or another, people are finding out what they are entitled to and accessing it, but we accept that it can be a lot more difficult than it should be to do so and we will be thinking about that in the roll-out of the 15 hours. There are also some very specific issues—Helen may wish to add something on this—around communications with particular parts of the community. When we looked at the take-up particularly of the two-year-olds offer, there were some very specific communities, particularly from South Asia, Somalia and Eastern Europe, where we have a particular challenge, and the local authorities—

Chair

The Report covers that.

Karin Smyth

We are going to come on to that. I mentioned to the previous witnesses the Social Mobility and Child Poverty Commission report around the number of strands in this area. I appreciate we are talking about this particular offer, but they have recommendations about decreased programmes and about communications across Government. Is that discussion happening across Government in terms of reducing confusion about the offer to parents?

Chris Wormald

I will ask Helen to comment. We work incredibly closely with HMRC and DWP, which do these things. It is very important to remember that the three basic types of entitlement cover different age ranges. We deal with three to four-year-olds. The other two deal with childcare up to 12 and then up to 16.

Karin Smyth

They do, but as was mentioned, two-year-olds become three and then four-year-olds. Parents need that guidance, don’t they?

Chris Wormald

Yes, and we accept that there have been communication challenges in these areas. Helen, do you want to say a bit about the work we are doing with HMRC and others?

Helen Stephenson

The first thing to say is that there is now a joint taskforce of Ministers and officials across Government looking at childcare, and there was within a month of the election. We have been working very closely with colleagues from other Departments and I think we have made really good progress. One of the things that I would say is that we have joined up the eligibility for both the tax-free childcare and the three and four-year-old offer, so that those have the same eligibility criteria, and that parents, when they go online to check whether they are eligible, will go to one place to check that. To parents it will look like more of a seamless offer. We have heard that that is an issue for parents and have already tried to do something about that. There is already a page on gov.uk that explains the joined-up childcare offer, but you are right that we need to do more. The three Departments are working closely together to ensure that happens as the programmes roll out—that our campaigns around that are joint and not separate and siloed.

Chair

It would be nice to think that everybody is going to be looking at gov.uk to find out about childcare, but very often it is from word of mouth, local networks, information from voucher providers or perhaps employers. What are you doing to punch out beyond gov.uk, good though it may be?

Chris Wormald

A lot of that is the work I mentioned a moment ago, working with local government to deal with some very specific communities in specific places. There are the things we do at national level—

Chair

I have three children and have gone through different sorts of childcare. It is difficult to find out; it is not easy, so what are you doing to punch it out to the wider community and not just—

Helen Stephenson

I totally understand that. In the previous Parliament we ran a competition for digital responses and we are working with childcare.co.uk to expand their offer. Currently that is used by 1.2 million parents.

Caroline Flint

But it might not be the most disadvantaged parents who have got access online and what have you. There has got to be something beyond that, because otherwise it is a bit like the worried well always turning up.

Helen Stephenson

Yes. We have already got and we do still have the duty on local authorities. As the Permanent Secretary said, we are asking them to make sure that they actually publish information about childcare services in their area.

Caroline Flint

For people who cannot read English or whose reading is not that good, where is the hands-on stuff?

Chris Wormald

Those are the campaigns that are mentioned in the National Audit Office work that I was talking about earlier.

Chair

So that is the local authority—

Chris Wormald

Yes, and we try to operate at those two levels; trying to get clear national messages and then identifying particular communities where the message is not getting across and working with the relevant local authority to try and get into them. That is at a very granular level. What we have been doing in your part of London, Chair, in east London around south Asian communities is very innovative stuff that people could only design with the relevant—

Chair

We will touch on regional variations later.

Karin Smyth

I am pleased to hear about the joint taskforce and those conversations. I am not sure, but the National Audit Office might want to come back in and tell us a bit more about what they know about that. I think it would be really helpful to understand the timescales around that in some more detail. That might be helpful in the future for this report, but I might go back to the National Audit Office to come back to me on that.

Chair

Sorry, are you going to ask a question about—

Karin Smyth

It would be interesting to have the detail of timings regarding how the joint taskforce is reporting, when it is reporting, and how this work links into that—

Chair

To be clear, Helen Stephenson, is it a working group?

Helen Stephenson

It is a working group of Ministers and officials who are overseeing the implementation of all the programmes and ensuring that they join up and are implemented on time. I am sure we can come back to you with timings on the particular communication elements of the work of the three Departments.

Karin Smyth

I think that would be particularly helpful for parents.

Chris Wormald

It will, of course, be one of the things we look at in our pilots of the new offer: how to best communicate with parents about some of the issues that were raised earlier.

Karin Smyth

I want to go to Ms Stephenson about the take-up rate for two-year-olds. You started to talk about how you are increasing awareness. Would you like to expand a little bit on how you are increasing awareness for those particular communities?

Chris Wormald

Just before we come to that question, shall I say a little bit about the numbers, which Ms Flint raised earlier? She correctly quoted the latest national stat on that, which is 58% take-up. We have two data sources. We have the annual survey, which produces the national statistic, and then we do a voluntary survey of local authorities once a term, which produces more regular, but not as accurate, data.

Chair

Is that about children—not the staff survey, this is the children?

Chris Wormald

Yes. This is about pupils. The latest of our voluntary surveys, which—a large caveat—is not as accurate as the national stat, is showing a take-up rate in the region of 70%. When the national statistics come out, we are normally within a few points of where the voluntary thing is.

Caroline Flint

For two-year-olds?

Chris Wormald

Yes, for two-year-olds. We are seeing—and this is what we have seen in the previous entitlements—an encouraging upturn in the numbers towards those that we were thinking of. Now we do need to see that repeated and properly verified in the national statistic, which is comparable to the 58% figure that Ms Flint used, but certainly our voluntary surveys are showing that the take-up is improving quite rapidly.

Chair

Do you want to add to that, or to answer Ms Smyth’s question? We are cutting across here a bit. Are you answering Ms Smyth?

Helen Stephenson

I can tell you about what we have done to improve that. As the Permanent Secretary said, that number was taken in January 2015 and our subsequent work has shown the figure of 70% because there was a huge amount of work that went on in between that to engage with local authorities. We did a whole raft of things. We have a support contract with an independent organisation that provides support and challenge to local authorities. We published local authorities’ performance against their statistical neighbours and their geographical neighbours, and that was press-released. We talked to the directors of children’s services, and the Ministers talked to them. We have made a whole raft of interventions and we have seen improved take-up, but we want to see that continue to rise and we are continuing to focus on that as a team.

Chris Wormald

And also confirmed in the national statistic. We will not know that that is true until we have the verified national statistic, which I think comes out in June.

Karin Smyth

That was my next question—about tracking that and understanding how that works in practice.

Chris Wormald

The next national statistic, which is the properly verified one and is comparable to the 58% number, I think is published in June. We will want to see what we are seeing in our voluntary surveys reported there. We do not want to declare victory too quickly, as it were. What I am saying is that our voluntary surveys are showing an encouraging trend.

Sir Amyas Morse

I want to check something before we leave this. Has there been any output from this ministerial-level working group?

Helen Stephenson

There are a number of these taskforces across Government now. They are not a review; they are literally a group of Ministers and officials working together to make sure the programmes are implemented. They oversee what we do.

Sir Amyas Morse

So they are just keeping touch rather than doing anything.

Chris Wormald

No. Shall I explain?

Sir Amyas Morse

I am not trying to be unkind; I am just trying to understand whether they are actually producing anything.

Chris Wormald

Yes. The Prime Minister announced just after the last election that he was going to establish a series of ministerial taskforces to deal with cross-cutting issues to ensure that the things that cut across several Departments were joined up properly, and one of those is on childcare.

Chair

Just to be clear, this is the place that any clashes with benefits, which were raised earlier by our previous witnesses, would be sorted out.

Chris Wormald

Yes, and resolved.

Chair

So heads would be banged together in that room; you’d go away with a task to go and sort it out.

Chris Wormald

Yes. That’s exactly right.

Karin Smyth

I want to move to local authorities, which we touched upon earlier in the hearing when Mr Leitch talked about there being no mechanism to talk locally. What assurance do you have that local authorities are now effectively supporting provision of good-quality childcare?

Chris Wormald

Our best evidence on the quality of childcare is Ofsted inspection. As I think was quoted in the Report, we have seen an extremely encouraging increase in the number of settings that are found to be good and outstanding—I think it has gone up from 69% to 85% since 2010. That is our independent measure of quality, measured against the early years foundation stage. As I think was picked out earlier, that is still not good enough because we have a gap between performance in disadvantaged areas and more advantaged areas. That has been narrowing but it is still there. The recent trends do show an encouraging narrowing of that gap, but it still exists and we need to see that closed further.

Chair

There is a graph in the Report that refers to this. It is figure 5 on page 20. We understand that the dot on the right is Birmingham, the lowest dot, on the left, is Tower Hamlets, which is highlighted in the Report, and the top dot is Richmond upon Thames, which is also highlighted.

Chris Wormald

I do not know which one is which. The National Audit Office would. As I say, this is a concern to us. It is why we are investing more in deprived areas through the early years pupil premium. Of course, as we mentioned earlier, the offer for two-year-olds is also focused on the most deprived areas. That is something we will need to look at in our workforce strategy and the early years national funding formula, both of which we will publish later this year. We do need to address these questions through policy. As I said, that gap is closing. The percentage point increase between 2013 and 2015 in terms of Ofsted outstanding and good was 10 points in the most deprived areas and six points in the least deprived areas, so we have seen that gap begin to close, but, as the National Audit Office correctly pointed out, it still exists and therefore we need to do more about it.

Karin Smyth

Do you think local authorities are providing that local mechanism to support parents in finding the offer and providers in stepping up to provide the offer?

Chris Wormald

As with everything, it is a mixed picture. There are some local authorities that have done excellently and some, as Helen described, that we work with because either they have a greater challenge or they need to do better. When we look at the national numbers, as the Chair set out at the beginning, we have seen basically—this is not a point about the current Government, as it has been going on since 2004—a success story in terms of local government and providers stepping up as each of the new entitlements is introduced. When we look at the national numbers, as you said, we see a very encouraging picture both on take-up and quality. That masks variation between local authorities. When we see those variations we go and work with the individual local authority to see what can be improved.

Karin Smyth

Do you see yours as a supportive role in that?

Chris Wormald

Yes. We have never used our formal intervention powers in local government on an early years issue as we have in children’s services, as we have discussed before with the Committee. The intervention we make is transparency—we publish a lot of data. The first level is that when we see that people are not performing the same as their statistical neighbours, we ring up the local authority to talk about that and then offer support and challenge. We do have formal intervention powers but we have never used them.

Karin Smyth

Are you concerned, as Mr Leitch said, about the survival of providers and the marketplace being able to make that offer?

Chris Wormald

It is important to divide the question in two. When you look at the “as is” situation today with the existing entitlement and the national numbers, as the National Audit Office pointed out, we see no evidence of providers going out of business in large numbers. There is an inflow and an outflow on the Ofsted register every year and the numbers are pretty stable. We also see high and increasing levels of take-up of the existing entitlement. When we look at the situation right now we do not see signs of a problem. As the NAO identified in its Report, as we introduce the next 15 hours in September 2017 that does bring new risks, and we accept that. As we pilot the new offer and consult on it, we will need to work with local government to monitor how that affects the market and how the new funding rates that we have introduced are working, and build that into our policy around the national funding formula and what we do around workforce. All that said, this is an area, rather unusually, where the Government are investing quite a lot of new money. This is one of the few sectors where we are not only increasing the entitlement but raising the price. We are putting in an extra £1 billion.

Karin Smyth

Having been a governor of a Sure Start, I sympathise and understand that when you are a provider trying to plan your service a year or two ahead and employ your staff, pay them the living wage and so on, you do need certainty of income. They are having to match and badge the income around the child rather than the needs of the child, so what we have to get to is who picks up the can when it goes wrong? The local authority has the role in the market. How do you know in the Department?

Chris Wormald

The accountabilities are pretty clear. We are responsible for the funding and the framework and the overall success of the programme nationally. Local government is responsible for managing the market in their individual areas, and the two of us work together. I do not think this is an area where there is any ambiguity.

Karin Smyth

How do you know when the local authority does fulfil that function?

Chris Wormald

We monitor the national statistics on take-up and quality and then we do our various surveys, both of parents and of providers. We actually have a very good national dataset on this. On cost, this is exactly why we did the review of childcare costs that we published at the same time as the spending review—I think the National Audit Office described our review as “thorough and wide-ranging”. It gave us a range of costs, but it gives us confidence that the decisions we took in the spending review around the uplift to the childcare costs are economic. That is not the same as saying that it is easy—it has a lot of efficiency need built in, as we have across the publicly funded sector—but we are confident that it is deliverable.

Karin Smyth

I want to come back to the role of the family information service in the local authority. I think 30% is the figure for the family information service take-up. How can you test the local effectiveness of the family information service, which should help parents through this problem of not understanding what they are entitled to?

Helen Stephenson

I am sorry, but I don’t know the reference for the 30% figure you are referring to.

Karin Smyth

I would have to look back to find that exact reference on the use of the family information service, but it is about how to help parents through the mire of information. The family information service is supposed to help them, so how do you test that that is working properly?

Helen Stephenson

We test parents’ views on this. We have a regular survey in which we substantively survey parents about their views on childcare as a whole, including whether they feel they have enough information. We have seen the figures rise: 49% of parents say they feel there is enough information, which is up from 44%, so parents are feeling more confident. In terms of the effectiveness of letting parents know about the offer, we measure it through our national survey, but we know that parents get a lot of information from talking to each other. It is actually about your own recommendations, like when I, as a parent, talk to someone I know who has used childcare. Parents use their own networks significantly to understand about different childcare providers locally. But we monitor that as part of our national survey, which we published recently.

Karin Smyth

Do you have concerns about the family information service locally?

Helen Stephenson

I think that is why, as part of the Childcare Act 2016, we strengthened the requirement to publish information about services, recognising that there is more we can do. I am not digitally savvy, but I am thinking particularly in terms of the open data and the digital awareness we have now. Being able to have data published in an open format can enable people more easily to access information about the childcare that is available.

Chris Wormald

Just to be clear on what we do, we act when we see problems in the take-up statistics.

Karin Smyth

There’s a lag there, isn’t there?

Chris Wormald

Yes. I appreciate the distinction between the point you are raising and that one, but to be clear, that is what we do. When something shows up to suggest that a local authority is not performing in the same way as its statistical neighbours, that is what triggers our conversations with the local authorities. Your question is whether we should be back up the chain a bit from that. I accept it is a fair challenge; we will take it away and think about it.

Chair

The point is that there is so much change coming through.

Karin Smyth

There is so much change and so many different funding streams for parents. From all the evidence and the forums, this issue is about 50% of people not understanding where to go or how to find support and navigate through the system. If the family information service is the go-to place, rather than the internet, who makes sure that operates and works?

Andy Fisher

Just to clarify, the Department’s survey found that 70% of parents were not aware of the service, while 84% of parents surveyed said that they found that the service was useful.

Chris Wormald

So those who use it think it’s good, but not enough know about it.

Chair

And that is a national survey?

Chris Wormald

I think it is a fair challenge, as part of the roll-out of the 15 hours. I think you are making a more general point about the family information service, which we will take away.

Chair

Before I pass over to John Pugh, I want to touch on the issue of the variations in funding and get your take on it. The quality has gone up and there has been some good performance, but some local authorities are taking up to 10% of the money that you pass down from Whitehall. Do you have any comment on whether that is a reasonable figure, or are local authorities creaming it off and not spending it on children?

Chris Wormald

This is something we will look at, as part of the early years national funding formula. We think that the variations in funding, both in what we give to local government and in how it is used, are too great; we accept that.

Chair

Have you any sense that it correlates with quality?

Chris Wormald

We have to dig into this a little further. Central spending is not necessarily a bad thing. It is, for example, all the spending that involves the outreach to difficult communities, and a lot of special needs spending is part of that central block. We don’t want to say money used by a local authority is necessarily bad and should be passed on, because they are doing a lot of powerful things.

Chair

Nobody is monitoring it. You are monitoring it from a great height, and there may be a local scrutiny panel.

Chris Wormald

Just as with the schools national funding formula, we want a much simpler formula with much clearer rules, which will include looking at that central block. As ever with a national funding formula, what you do not want to have are rules that are so tight that they crush what is a perfectly sensible local decision based on the circumstances of the local authority. That is what we will be consulting on later this year.

Chair

We were very struck by the variation—

Chris Wormald

Yes, as are we. That is a result of history, rather than maths.

Chair

The variations in funding, even between similar authorities, were really stark. We heard from a previous witness that there can be two settings in neighbouring boroughs with very different levels of fee for children in those communities.

Chris Wormald

I do not need to tell the Committee that, as with every national funding formula, they are very difficult to introduce, they can go wrong, and there are winners as well as losers.

Chair

You are getting your excuses in—

Chris Wormald

No, I am merely stating that we do not want to see this as a silver bullet or magic formula that will make everyone happy. It is a tough thing to do, but it will hopefully address the variations.

Chair

We will be asking Jonathan Slater about this in time, no doubt.

John Pugh

It is a kind of dream scenario for you, because here you are, unusually for a permanent secretary, defending a Government policy that is universally popular and good in its outcomes. The only way from now on in is down, and you seem to be getting out at just the right time. I am still questioning whether you are actually running one policy or a suite of policies, because there are a number of objectives here, aren’t there? Some are to do with employment, some with school-readiness and some with equalisation of life chances. Do you feel that tension? It was particularly alluded to in Mr Leitch’s earlier evidence, in which he suggested that 30 hours for some children was not actually an ideal outcome in terms of education, though it might be quite good for the employment of their parents.

Chris Wormald

It is a complicated picture that reflects the complications of the world out there. We are trying to achieve three inter-locking but separate objectives: educational development, reducing the burden on working families and getting people back into work. Those are different types of objective, and some of our policies are aimed at either one, two or three of them. As Ms Flint was saying earlier, the two-year-olds pledge is very much about educational attainment and was designed around that. That is why it was targeted at the most disadvantaged, and our evidence shows that it is the first 15 hours that has the biggest impact on education. At the other end of the spectrum—this was very explicit in the governing party’s manifesto, which we are implementing—the additional 15 hours, taking it up to 30, is about the cost of living.

John Pugh

Can we zone in on that a little bit? You seem to be quite sanguine about the market’s capacity to provide these extra 15 hours.

Chris Wormald

No, not at all. I am sorry if I have given that impression. I agree exactly with what the National Audit Office said about this: that it is a challenge that needs to be very carefully piloted and monitored as we go forward, so that we can design a policy that doesn’t have—

John Pugh

But you accept that there is quite a fragile ecology here. Despite all the talk about extra provision and care and the Government putting more money on the table, the number of providers is not increasing and the workforce is actually decreasing. Do you see the workforce, and actually finding the people, as a problem?

Chris Wormald

There are some very good things about the workforce. We have seen the qualification level of the workforce rise over the last few years, which explains the rise in quality we have seen. That is a positive thing.

John Pugh

But not the numbers. According to the Report there has been a 5% decrease in the workforce.

Chair

We have not really talked much about childminders. They are of increasing quality but have gone down in numbers.

Chris Wormald

Those two things can be related.

John Pugh

Can we accept that at any rate there is uncertainty?

Chris Wormald

We do not see in the current take-up numbers and the current number of providers in this system as it exists today much sign of stress in the market. We do, however, accept, as the National Audit Office pointed out, that as we increase the entitlement, that brings new risks that we will have to manage. The reason why I may have sounded sanguine about it is that since 2004 both local authorities and the sectors have always stepped up to the plate on new entitlements, and we do think we are building on a sound basis. When the Economist Intelligence Unit compared early years sectors across the world in 2012, they ranked the UK fourth out of everybody, so we think we have something safe to build on, but that is not the same as saying—

Chair

You say there is no sign of stress, but we heard—it is important to pin this one down before I lose track of it—from all the witnesses that many parents ask for their 15 hours free. But the providers for all sorts of reasons—for them good reasons—will pick out the parents who can afford to buy the extra classes. So you say it is not under stress and we take that at face value, but it is these funny work-arounds that go on that deny many parents their rights to get their 15 hours.

Chris Wormald

We accept that that is a problem. It is not supposed to be allowed to happen. Helen, do you want to say what the position is?

Helen Stephenson

We have 96% of children accessing it, so I really would like to hear if parents are being told that by local authorities, and we will take that up with local authorities, but the high level of take-up does suggest that parents are getting the free entitlement.

John Pugh

I do not think the allegations are that people are being denied. The economic model for the providers works through there being an element of cross-subsidy. If, none the less, all the people decide they want 30 hours at the Government’s rate, not only will there be more than a cross-subsidy to support, but there will be less opportunity for cross-subsidy because people will not need to take any more hours of childcare, so the economic model that is tenuous now and likely to fracture is going to be more under stress.

Chris Wormald

What I am saying is that the current national numbers that we look at do not suggest, as the National Audit Office was saying, that it is tenuous at the moment, but we accept there are risks in the expansion, as there are with any expansion, of those sorts of unintended consequences, and those are the things we are going to have to look at in our pilot phase.

John Pugh

Okay. Can I just touch on another unintended consequence? Clearly, if you have more children in for more time in the same buildings—often they organise morning and afternoon sessions, with different sets of children doing 15 hours, and now we have the possibility of a huge uptake of children taking 30 hours—you will need to release some capital funding to facilitate more providers.

Chris Wormald

Yes, and I think we have £50 million in the spending review for new capital. In a number of cases, these are private businesses that can raise their own capital, but we are putting money into this. We estimate—I am always reluctant to use these numbers, but this is the estimate we were working on in the spending review—that the actual number of new places that we have to create is about 45,000 when you look at the number of people already taking up hours and the number of spare places in the system. So we have a clear view of what we need to achieve and we have some money, but we will need to test those assumptions in the pilot phase.

John Pugh

Enough money?

Chris Wormald

It’s £50 million.

Mr Bacon

You have £50 million to create 45,000 new places.

Chair

The private sector will do their own. The gearing on the borrowing will mean they will not make much money, possibly not enough.

Chris Wormald

As I say, we are putting the price up as well. When we have looked at the roll-out of the previous offers, which also involved the creation of lots of new places, that 45,000 looks like it should be doable.

Mr Bacon

Should be what?

Chris Wormald

It should be achievable based on historic trends. We will need to test that, exactly as the National Audit Office has suggested, in our pilot phase and in our consultation phase.

Sir Amyas Morse

Just one thing. It seems to me—and this goes to the questions that Dr Pugh was asking earlier—that there is a surprising reduction, in paragraph 121 of this Report, in the numbers of applicants for degree-level qualifications. Those have fallen really very sharply. Of the things that have happened that look a little bit concerning, that looks rather sudden to me. What do you think about that?

Chris Wormald

That particular programme is a worry. Of course, that is the qualified teacher part, so that is not the vast majority of the workforce. As I say, when we look at the workforce as a whole, the qualification level is rising, and that is what is driving the increased quality. This is a problem.

Sir Amyas Morse

So that means that you will think about some action—

Chris Wormald

Yes. As I have said, we are publishing a workforce strategy for the early years later this year, and we do have more thinking to do around that, because the numbers speak for themselves.

Sir Amyas Morse

If I might, I will just ask one more question, which is on your ability to react promptly. You have said that you will test and see the critical areas, and if it starts falling off you will move to do something about it. Does the mechanism of passing this through local government and so forth give you the ability to react sufficiently quickly? If you saw a real cliff edge being reached by providers, could you do something about it reasonably quickly, or is it actually no faster than a year?

Chris Wormald

No, I think we ought to be able to do that. As I hope we have described through this hearing, this is a very data-rich area. We collect a lot of survey data and a lot of census data. It is also, when you look across the whole of the education sector, one of the best-researched areas of anything. There is an awful lot of independent evidence and research out there. Your challenge is a completely fair one. We think so, but of course that will get tested in the reality.

Sir Amyas Morse

Forgive me. Just to be slightly boring about it, though, that is great, and I am glad it is a fair challenge, but what I am trying to find out is, in the event that you see that the number of providers in trouble, or going out of business, or declining to provide is going up sharply, how fast you can actually react to that? I know it is data-rich and everything, but what I am asking is: if you see people going out of business in significant numbers, how fast can you do something about it?

Chris Wormald

Well, it would depend. I can’t tell you, “It would take us X weeks.” It would depend upon the nature of the situation. What I would say, however, is that the way entitlements get taken up is that they are not big bangs. They build up really quite slowly after implementation dates, and in all the previous roll-outs of new entitlements, we have been able to manage that properly. As I say, I do think it is a fair challenge, and I will go away and construct a better answer on that.

John Pugh

Another challenge that might be thrown at you: I am trying genuinely to look at it from the point of view of a provider who wishes to fill this demand by stepping up to the plate, or whatever metaphor we want to use, and expanding their facility. Now, I may not get the staff and I have a problem digging in my pocket for the capital funding, but I have a further problem, haven’t I? They are already complaining that they have to meet wage costs on a weekly basis, and there is a cash flow problem. Many of them are very small providers. I think they are paid on a termly basis. Is that correct?

Helen Stephenson

Yes, and that is why we are consulting on that at the moment. That is—

John Pugh

And you’re going to change that.

Helen Stephenson

We are consulting on that at the moment. We want to move to a prompt payment part of the contract with the local authority. We have absolutely heard that from providers as we have talked to them as we have developed it.

Chair

Just to be clear, will you pay the local authority more promptly, or are you going to make the local authority pay the provider more promptly?

Helen Stephenson

We want to ensure—we are consulting on this—that the local authorities have a prompt payment policy so they will pass that on quickly. Because many of these providers are smaller providers—as you say, childminders—it is really important that they have a proper cash flow, so that is what we are working on at the moment.

John Pugh

So I am trying to manage this and reduce my staffing to what, basically, I can get away with. I am probably not going to be that keen on taking any more two-year-olds than I have to, am I, really? Three-year-olds would be a better thing to concentrate on as a business model.

Chris Wormald

I don’t think we have seen any evidence for that. As I say, the take-up rates for two-year-olds are—

Chair

In the right areas?

Chris Wormald

It is focused on the most deprived people, so the rate going up will disproportionately affect—

Chair

May I put to you what some of my local childminders have said to me? We have a very active network of excellent childminders in Hackney. They take a two-year-old at what is in Hackney the higher rate, and then the child turns three, of course, and the rate goes down. The childminders then have this moral dilemma. Do they continue with a child with whom they have developed a relationship, often referred by social services—as you say, they are from a deprived group—or do they cut their losses at that point and say, “Well, we’re not going to take them at three”? They are facing that; some are making decisions because they have overheads and they have to think about their costs.

Chris Wormald

I accept that dilemma, but in fact it is directly opposite to what Mr Pugh was describing, in terms of two-year-olds being funded at a higher rate.

Chair

That is Hackney. There are different models, and some local authorities are funding two-year-olds at a higher rate.

Chris Wormald

We will need to look at part of this in our national funding formula, but it is also why we wanted an early years pupil premium for the most challenged.

John Pugh

Pursuing that, to implement this in time, you will require a fairly stable and expanding market with a clear view of what is going to happen. Yet, while they may get odd forms of finance in local areas, what they are probably looking at is a changing picture as you standardise and average that out across the country and separate it from the traditional school funding formula.

Chris Wormald

It is a changing picture, which we need to do for all the reasons this Committee has raised—

John Pugh

So I simply won’t know, if I am a provider, how much I am likely to be getting two or three years down the line.

Chris Wormald

Once we have a national funding formula, you will have much greater certainty and you won’t have the strange variations between—

John Pugh

So I am going to my bank manager suggesting that I expand my premises to deal with this new demand, without any guarantees about the revenue funding I am going to get. It is quite a hazardous situation to be in if you are a provider, isn’t it?

Chris Wormald

At this second, because we have not consulted and introduced our national funding formula. We have, of course, said what the overall picture is, and the Government is putting in an extra £1 billion over this spending review period. That does put you in a better position than many sectors that I could mention.

John Pugh

I think you are probably getting out at the right time.

Caroline Flint

Do you think there is a problem with the terminology we use in this area, in that we are not able to define what is pre-school educational development as opposed to childcare? For example, evidence has told us that access to pre-school education is really important for a child’s development, regardless of whether the parents are in work or out of work. I see that as a developmental contribution that the state is making. Childcare beyond that has to be high quality, of course, but it is there to help working parents more. Someone from Mumsnet said that “communication from the Government regarding the 30 hours free childcare is at best misleading, at worst a barefaced lie.” If you are saying children of three and four should have pre-school education—and obviously it is up to parents to take it up—that’s not really childcare. That is about providing education, isn’t it?

Chris Wormald

In all our entitlements, we require everyone to do the early years foundation stage, which is based on—

Caroline Flint

But for the children and the family, that 15 hours is not childcare, it is education for the child, isn’t it?

Chris Wormald

Yes, and for the offer for two-year-olds and the first 15 hours of the universal three and four-year-old offer, we have been very clear that it has a very clear educational purpose of the type you describe. It is different for the additional 15 hours. We are keeping exactly the same educational standards, but there was an explicit policy built into the manifesto commitment that this was about reducing the burden on working people.

Caroline Flint

Does it worry you, then, that parents who work in all sorts of different environments—some on shift work, some on early hours, some starting late—are pretty limited by whatever the childcare provider says when it comes to accessing the 30 hours of free childcare? For example, if it is a nursery school attached to a school, they might get 9 am to 11.30 am and then 1 pm to 3.30 pm, but who is going to be there for the bit in between?

Chris Wormald

We do worry about the flexibility. Do you want to say a bit, Helen, about what we do?

Caroline Flint

And how is that going to help a working parent?

Helen Stephenson

I think you make a very important point, and that is another thing that we are consulting on at the moment; we don’t think it is acceptable that there are very rigid times when you are able to take up your entitlement. One of the things we are very concerned about with this policy is flexibility. That is a key thing that we are testing through the early implementation and a key thing that we are consulting on at the moment. Again, one of the things we want to move towards is a model contract between the local authority and the provider. Some of the witnesses before said that was one of the problems they had—the number of different environments in which they were operating. We do want to simplify that.

Chair

Presumably you are consulting childminders on that—

Helen Stephenson

Absolutely.

Chair

Because they are sometimes in a better position to offer the flexibility Ms Flint referred to.

Helen Stephenson

I care very deeply about this area and care about this policy being delivered properly. For me, childminders are a very important part of this, because they do have flexibility. They are often caring for children in a home-based environment, which some parents prefer. They are quite happy for their child to do three hours in a pre-school or a nursery school, but they want a more home-based environment. So we absolutely do want more childminders, and we are working with PACEY, the childminder organisation, to really try to understand and improve that. We think the prompt payment and the simplified bureaucracy at local level will help childminders to deliver the free entitlement places.

Chair

I should say that we hoped to have a childminder on our pre-panel, but because of the size of their businesses, they were all working, looking after children.

Caroline Flint

I had a childminder, and it was great. That was consistently for nine years.

Chair

You personally or for your children? [Laughter.]

Caroline Flint

For my children! The children went to playgroup and then to the local school for the pre-school provision, but I paid across the piece. This has come up on the Mumsnet forum as well. Some parents, when they are talking about 30 hours, which may be in a nursery school setting, are saying, “Well, we’re still having to pay, potentially, the childminder for all those hours as well.” How does that factor into all this? Regardless of how good a childminder is—there are some fantastic childminders—parents will often say school-led provision, with other children and with what that can develop, is something that they want to take advantage of.

Helen Stephenson

One of the things that we want to build on is some really good examples around the country of where childminders and schools are working together in a far more joined-up way. We have seen evidence of what we call childcare hubs, whereby you have a school; a childminder is attached to it; the childminding services are advertised on the school’s website; and childminders use it for drop-in and informal sessions. There are some examples of that in the country already, and we want to see more of that in terms of the 30 hours.

Caroline Flint

What I am asking about is really the payment for all this, for a family. If you have 30 hours of free childcare and that can be provided by pre-school provision at a local primary school, a lot of parents will want to take that up. Then what they will want to look at is maybe dropping the children off at school and picking them up. If you are a working mum, maybe you can’t go to work after 9. And then you have the lunchtime period. I am just wondering how you are thinking about how this is going to affect the provider market. How are you going to match that all up, in terms of the children being at the school and, say, with a childminder? Or how do you find the provision in between?

Helen Stephenson

To the parent, that is free, so there should not be complexity in terms of paying for different services. The provider will continue to get the payment from the local authority as they do now, so it will go directly from the local authority to the provider.

Caroline Flint

What if a parent, instead of having the free hours spread out over five days, wanted to use them over two days? Can they do that?

Helen Stephenson

I can’t see why they couldn’t. That is about flexibility.

Karin Smyth

The simplification is really welcome, obviously. This is something we touched on earlier. One of the pre-panel witnesses mentioned the complications in flexibility around universal credit, and the commission I referred to earlier talks about the decline of the voucher scheme and the tax-free offer that is coming separately. I appreciate they are not your ball-game, but in terms of simplifying things at local level for parents and providers, does that simplification involve the DWP and HMRC so that the offer looks consistent and is easy to understand for parents? Does it involve discussions about universal credit and the tax-free offer through HMRC, so that parents locally see it as simplified?

Helen Stephenson

That is what I was talking about earlier, in terms of our joining up our communications around the three offers. It does boil down—

Karin Smyth

I just want to be clear. The conversation earlier was about the taskforce that Government—[Interruption.] What I wanted to drive back was: does that then translate to a co-ordinated—

Chair

Is there a calculator or something?

Karin Smyth

Is there a booklet that involves all these things? Is that the way you are thinking?

Helen Stephenson

There will be a calculator that enables you to put in your circumstances and test what your entitlement will be. You can find out there whether you are eligible for tax-free childcare and the 30 hours. If you are not, it will point you in the direction of the universal credit, which will pay 85% of your childcare costs as from now.

Chris Wormald

These are all things we are designing now. Are we having what we think are the right discussions? Yes. Is the situation on the ground right now as we would want? No.

Chair

We welcome an honest admission. That is fantastic.

Caroline Flint

On the three hours now, can a parent, instead of spreading them out at five two-and-a-half-hour sessions—

Chair

Three hours.

Caroline Flint

Yes, three-hour sessions. Let me get it right. Can they do two seven-and-a-half-hour sessions?

Helen Stephenson

This comes back to your point about local requirements that are put on to that. There is real variation at local level and that is one reason why we are consulting on taking that variation out and making it much simpler for parents. Flexibility is hugely important.

Chair

In my area I can tell which school has mostly working parents and which school does not. The one with working parents has a real struggle filling its 15 hours of free childcare because for a working parent it is not enough, and the others have full nurseries because 15 hours is good enough. Some have tried to flex it, but because they are schools, they have not be able to sell the extra. Have you done any work on that?

Chris Wormald

To be honest, this conversation has brought that out very well. There is a big policy dilemma in that we both want national rules, simplicity and clarity, and we want things that are highly responsive to local communities with lots of flexibility. That is very difficult. I am not claiming we have the balance exactly right, but that is what we are trying to balance in our policies and why we work with local government as we do.

Chair

Most parents would understand that. On the 15 hours, we heard a number of examples from Dalia Ben-Galim earlier—I hope Gingerbread will provide them to us—and we have heard anecdotally from our constituencies that people are turned away from nursery settings. Helen, you said there was 90% take-up, which we have recognised is good, but do you think that perhaps people are being pushed away from the settings they want and if they know that they will not get into a nursery, they find a childminder or someone who will be able to provide the 15 hours without top-up? They will be pushed to a provider who can provide that and away from a provider that, perhaps for financial reasons, is refusing to take someone on.

Helen Stephenson

That is a very good point and we need to understand it further. We will certainly take it away to try to understand more about it because it is important.

Chris Wormald

That is not supposed to happen and the individual should be raising it with their local authority, which has responsibility for managing the market, but we will take it away and come back to you.

Chair

We know how it works. There is no vacancy and then, miraculously, there is a vacancy for the next parent who comes along with the money in their back pocket to pay the top-up.

Chris Wormald

This has been a clear point from the Committee and the evidence we received. We should take it away and come back to you with a considered answer.

Chair

We will ask Gingerbread to submit more detailed evidence to us and make sure we get that to the Department. We take your offer of looking at the matter seriously seriously, so thank you for that. I want to touch on Ofsted inspections. There was quite an alarming figure for the inspections, which take place only every four years. On page 22, paragraph 1.17 of its report, the National Audit Office found that, in August 2015, of 690 providers rated as inadequate at their latest inspection, 313—not quite half—had previously been rated as good or outstanding. Do you have any worries about that, or do you feel that statistically it is all right?

Chris Wormald

It is always a worry when a provider is falling backwards. To be clear on what Ofsted does, there is the four-year regular inspection cycle and in between those inspections it takes a risk-based approach to who they look at. If it has had complaints about a provider or whistleblowing or the proprietor has changed or other evidence suggests that something might be going wrong, it goes back before four years. So it is four years for everyone and then a risk-based approach. As the National Audit Office said, there is always a question of what is the right length of time between inspections, and we have to trade off the cost to the business—

Chair

We understand that, but to move from “outstanding” to “inadequate” is quite a big jump, is it not?

Chris Wormald

Yes, and it occasionally happens in schools as well. It does not happen very often, but the smaller the institution, the more likely that is.

Chair

So you are relying a lot on whistleblowers. If I were a parent worried about a childcare setting, maybe so worried that I might want to take my child out of it, who would you recommend?

Chris Wormald

Ofsted run a hotline on early years, which is actually very well used.

Chair

Just to be clear—I should know this because I use Ofsted-registered childcare—is it a requirement, whatever the setting, for those carers to provide information about how parents can raise concerns?

Chris Wormald

Yes, I think it is.

Helen Stephenson

I am not sure.

Chair

My experience is that it is probably not, but I sometimes deal with individuals who are registered with Ofsted—

Chris Wormald

I thought that it was, but since you asked the question, I will go away and check.

Chair

It may be so for institutional settings, but not quite so common for individuals.

Nigel Mills

On that point, presumably the one way that there are some data will be the baseline data that schools collect in the reception year when the kids get into the formal school setting. You are not planning to publish that data as some kind of data set or league table, are you? We are not going to know, even by area or by school intake, how well this policy is working. Is that something that Ofsted could look at, to assess whether there is a mixed variation? Could schools flag up kids coming from one nursery or another?

Chair

Page 23 of the Report refers to this.

Chris Wormald

There are two things. We are putting a lot of effort into the evaluation of this, and in 2012 we launched a new longitudinal study that will be key to us assessing the value for money. That plays out over a very long time.

Chair

When is that due?

Chris Wormald

The first data set will come out in the next few months, but we actually track pupils through until they are 18. We have just published the final bit of the 1997 survey that we did, which shows the effect of early years on A-level results. This is very powerful research that takes a very long time. To assess kids at five to get some nationally comparable data is incredibly difficult, and we do not have simple tests of the type that we have for 11-year-olds. You will have seen the Government’s recent announcements on what they are doing on baseline testing, but it doesn’t do what you are suggesting. Nothing we have done allows us to tell the quality of individual providers from school results.

Chair

You cancelled the programme.

Chris Wormald

We were running a pilot of baseline assessment, which was using three different providers. It was not producing nationally comparable data. As I have said, assessing children at five, and doing it well and comparably, is very difficult. We will be discussing with the sector how we move forward. We do not have a mechanism at the moment. We can now data match between our national schools census and the national pupil database, so we ought to do much more of and be much better in future at tracking what happened to people in the early years and then what they achieved as they went through school. That does not give you an immediate feedback on whether a nursery or childminder is a problem, but it ought to give us—

Chair

Before I bring Nigel Mills back in, I am not sure from my experience that my children had a number, when they were in certain childcare settings, that they could track through. How do you track through?

Chris Wormald

You data match between the names and addresses of the children and then the national pupil database.

Chair

What if they move house?

Chris Wormald

I asked exactly that question. I am told that the data matching gives you an average 93% match of children on the census to the national pupil database.

Chair

Is it something you have thought about providing? People have NHS numbers.

Chris Wormald

Again, I asked this question. I am told it is technically very difficult to do, because the cohort enter at different times. Some start at two, some at three. We are looking at it, but I am told it is more technically difficult than you would think. On Mr Mills’ question, in future we ought to be able to evaluate much better what type of setting produces the best results as people go through primary and into secondary school. It will not do that on an individual basis, but we ought to be able to say that settings that did this type of thing are more associated with successful later school careers. We will always have the problem that there is quite a big time lag in that, and there have been some examples. There was a very famous one in the United States, where there was a big effect from a particular intervention by age eight, which had then completely disappeared by age 11. Because the effects are so long term, it is quite easy to declare the success or failure of a particular thing too quickly, which does not help us with the evaluation but is just a fact of life.

Nigel Mills

But you would encourage headteachers at infant schools, if they spotted a trend whereby kids who had gone to one nursery were well behind, to flag that up to Ofsted or somewhere.

Chris Wormald

Yes, we would expect them to be flagging that up.

Nigel Mills

And you would probably expect Ofsted to look at the baseline assessments and try to spot that when they went to a school as well, wouldn’t you?

Chris Wormald

Yes. As I said, Ofsted takes a risk-based approach and if a school had concerns about particular providers, we would expect them to be alerting Ofsted and Ofsted to be taking the appropriate regulatory action.

Chair

May I just come in on another quick point, before I lose track of where I am, and then I will bring Caroline Flint and Richard Bacon in? We heard a lot from providers about their funding—we have touched on this point already, and John Pugh was trying to tease this out on expansion. Some of these business are very marginal—very fragile. As the custodian of the market, I suppose—is that the right phrase? I am not sure—you are there to try and make sure the market works, and the market is very diverse. What would you do if certain areas just saw a withdrawal of childcare? Private providers can barely manage in an area such as mine, with high capital costs and high staffing costs already, without the national living wage and other things still to bite.

Chris Wormald

We would expect the local authority to have noticed before we did. They have a responsibility to manage the market in their local area, as we do when we look at the national picture. We would then expect to sit down with that local authority and look at exactly what was happening in that area and why, and whether it was in the commissioning process or elsewhere.

Chair

Would more money be forthcoming? It might be down to sheer money. That is what we were hearing from some.

Chris Wormald

Money is always a challenge. We only have as much as we have in the spending review, so if we were putting additional money into somewhere, it would have to come from somewhere else.

Chair

But this is a universal offer. If it wasn’t working out in a geographical area for a particular reason, that would be very unfair on those parents and children.

Chris Wormald

I think I would answer it this way. When we introduce our national funding formula, we will—as with any national funding formula—look at what the right area cost adjustments and what the right deprivation indices are, and so on. The situation you are describing would arise if we had got our national funding formula very wrong—if we had set a rate for a particular category of local authorities where it was not sustainable. That would suggest that we had—

Chair

Some local authority rates are very low—£2.50 or so.

Chris Wormald

Yes and as I say, we need to find a much fairer basis by which we fund local authorities and then local authorities fund individual providers.

Chair

I have a couple of other points. One was about the evaluation of these pilots. When we will be able to see the results of that? You are piloting in September 2016 with a view to full implementation in 2017, so by the time you have a pilot going and have evaluated it, you are not going to be able to give much notice.

Helen Stephenson

We have already got something in the field—we are working with the University of East London and Frontier Economics. They are helping us to design the framework for the evaluation, which will then be commissioned out and be in place ready for the implementers to start. They are looking in particular at what data sources they can already use—so things that we are already collecting information about—and then whether there are other sources of data that we need to collect.

Chair

And when will it be published?

Helen Stephenson

I am not aware that that one will be published. We want this pre-survey to help us inform—

Chair

Sorry, when will the actual evaluation of how well the pilots are working be published?

Helen Stephenson

I don’t have the timings on that, but we obviously want to use the information from the evaluation to inform us as we roll the programme out.

Chair

But you are going to be rolling a programme out and people will be making their financial assessments, so whichever setting they are in, they will have a financial deadline by which they will need to know what is coming down the line. Childcare often does work—I know from experience—on a two-week horizon or a month horizon but many childcare settings, particularly those that require capital investment, would need to know in good time many months before.

Chris Wormald

Yes. I will come back to you. I don’t have details with me of what we will publish and when.

Chair

If you could, please do, because I think it is really important and we may call your successor back on that.

Chris Wormald

The key thing is that because of the exact issue that you raise—that we will be piloting and then introducing—we are going to be in constant conversation with the areas that are piloting it. It is not going to be a case that we do some research, we publish it, and we consider; this will be something we will be discussing with local authorities and building back in to our policy—

Chair

We appreciate that there are internal procedures, which sound like they are all going swimmingly, and that the process is worked out in the Department, but we were just a bit wary. Whitehall processes do not always really work with people on the ground—that is, parents, who will also be deciding whether they can go back to work and asking whether they will get this 30 hours and whether it will be provided locally. Is there enough certainty? You have heard from providers; they are not all sure about what they are going to do. I shall just turn to figure 14 on page 39 of the Report. For those who do not have it in front of them, it shows the percentage of children in each provider type broken down by deprivation decile. I will not read through the chart, but it clearly shows that the highest number of children go to maintained school settings in deprived areas. We have seen a programme from your Department, Mr Wormald, of academisation, so there will be freedom for schools to do as they wish. Does that freedom of admission apply to early years settings as well? Can they turn children away?

Chris Wormald

For academies in general, there is not freedom of admission; they still have to comply with the admissions code.

Chair

But they could set their own admissions?

Chris Wormald

Only within the terms of the code, so it has to be free, transparent and fair.

Chair

But would it be possible, for example, for them to have musical aptitude tests for three or four-year-olds?

Chris Wormald

I don’t think so.

Helen Stephenson

I am not aware that nursery codes operate in the same way, in terms of eligibility for the maintained sector.

Chair

I am just trying to see how these two policies match up. All schools will have to become academies under the current proposals and you’ve got, particularly in deprived areas, large numbers of children—in fact, the majority of providers for most deprived children are in maintained school settings. Those schools will be “independent” academies funded by the taxpayer and looking after and educating children. Perhaps you could write to us about what admissions criteria they will be allowed to implement. Can they set the same sort of changes to criteria as they can for secondary levels?

Chris Wormald

We will come back to you on that. The timescale on the academies White Paper is quite long, so this is a longer-term issue. We have not seen any differences in behaviour, in this area, between primary schools that are academies and primary schools that are not, but I take your point.

Chair

That’s all right, but when there is a mix of provision it is less—the other key thing is that local authorities are currently responsible for maintaining and managing the maintained provision, and have the overall responsibility for the early-years agenda, but once the academisation happens they won’t have any control over those nursery settings in schools.

Chris Wormald

They are still the commissioner and they are the commissioner of all early years, whether in the maintained sector or not.

Chair

Where will accountability lie? If there is a problem with an early years setting in an academy nursery environment for three and four-year-olds, who is responsible for sorting that out? Would it be the commissioner? Would it be the chain? Would it be you?

Chris Wormald

It will be the same as the accountabilities in the PVI—the private and voluntary—sector at the moment. The local authority is the commissioner of all sectors, and is also the provider of the maintained sector; once all schools are academies, it will be the commissioner for everything with three and four-year-olds, but not the provider of any of it. When it commissions an academy, its relationship is exactly the same as if it is commissioning a voluntary sector organisation or a private sector organisation. It is still responsible for the money being spent properly, the contract that it has being fulfilled, and the overall state of the market, but, just like the owners of a private company are responsible for how they then deliver that, that is what the relationship with the academy will be.

Chair

So basically they will just be treated a bit like the private and voluntary sector?

Chris Wormald

Yes, you will actually have a level playing field between different types of provider.

Chair

That is one way of putting it, I suppose. This is my final question before I pass to Caroline Flint and Richard Bacon for the last couple of points, and I will go back to our lead members as well before we finish. Caroline Flint touched a bit on the difference between childcare and early years, and we touched on the value for working parents and for parents not working. What is your assessment or description of what the value should be, and how will you be measuring that?

Chris Wormald

This is very complicated, and it is different between the offers. For the two-year-old and the universal element—the first 15 hours of the three and four-year-old offer—our main long-term evaluation is about its educational impact. For the extension to 15 hours, the Government’s manifesto was clear that the biggest purpose was around the cost of living, but we want it to have exactly the same educational standards as the first 15 hours. We would expect to see an educational impact, but that was not the starting point of the policy.

Chair

In terms of the value on cost of living, you could have lots of well-paid MPs putting their children into this setting who perhaps would not get the same value as someone for whom it is making the difference as to whether they are working or not. We heard a bit from Gingerbread about that.

Chris Wormald

We have been working with Frontier Economics on that. In February, it published a very extensive feasibility study on how we should go about evaluating that, and we will be taking that work forward. A lot of this is very complicated and difficult.

Chair

We get very worried when you say it is too complicated for people like us to understand. It makes us a bit suspicious.

Chris Wormald

As I said, how we are going about doing this is there and it is published. Particularly when you get to the areas of return to work, trying to distil out exactly what contribution affected someone decision’s to return to work is a very complicated thing to do.

Chair

On the ground, it is not that complicated. There is good, stable, secure childcare that can be secured at the same point someone gets a job or goes to study. That is what people need.

Chris Wormald

That clearly helps.

Chair

I recognise that measuring it from your end is a little more challenging.

Caroline Flint

May I just redeem myself on my maths earlier, because I was citing a mum from Mumsnet? Despite the 15 hours, she was told that she could have five two and a half hours, and that is often the case in these pre-school settings. It was either 9 to 11.30 or 1 to 3.30. That is what I was citing there, despite the 15 hours. Can you just clarify what you were saying earlier about tracking the outcomes? Where does the two-year-old provision fit into that? Is there a separate service?

Chris Wormald

Our longitudinal study starts with two-year-olds.

Caroline Flint

On the two-year-olds, as you said earlier, that is specifically looking at development goals being reached to help later educational attainment. How are you judging that against such things as the troubled families programme, which I think replaced the family intervention programme or the other way round, because lots of local authorities are having to deliver those programmes where they have identified families where the children are at risk of not reaching their development goals. How does it fit with that, and how are you going to work out which bit of the intervention with families is making the most difference?

Chris Wormald

The way that the 1997 longitudinal worked was that it took pupils who had had early intervention from two to four and ones that had not and then controlled for other things that had happened to them. It then looked at whether you could identify a specified difference between the two, and it could. You do have to account for all those other factors, which is why, when you do these studies, you take a representative sample and study it very carefully indeed.

Caroline Flint

In terms of take-up, I understand that there are three categories: looked-after children, children with disabilities and other children who are disadvantaged, possibly with parents not in work. Why can you not make it a requirement that any looked-after child or, for that matter, any child in a workless family has to be accessing the provision?

Chris Wormald

All our pre-school offers are voluntary, and that has been a principle of policy for some time.

Helen Stephenson

It has always been a voluntary offer, and that is partly because parents have very strong views about what is right for their child.

Caroline Flint

But you’re making a judgment that this is targeted at children who, under other circumstances, are not thriving?

Chris Wormald

Yes, but it is still a choice. We have never gone into the requirement for early years.

Chair

And there are no plans to change that policy?

Chris Wormald

No, there are no plans to change that. I will go away and check the position on looked-after children, because of course it is a little different when the state is the parent. I will look at that.

Chair

If you could let us know. Ms Flint’s point is well-placed. A lot of the thrust of this of this policy is to target just—

Chris Wormald

Yes, but we still see this as a choice policy.

Chair

Given that we’ve done previous hearings on the educational outcomes of children in care, it’s very important to us as a Committee.

Mr Bacon

Mr Wormald, I have just one question. The pre-panel—the Pre-school Learning Alliance, Gingerbread and Acorn Childcare—had a lot of things to say, and I think you listened to all of it. Did any of what they said surprise you?

Chris Wormald

We do not recognise, from the national numbers we see, some of the things they were saying about what the market is like now. That’s not to say that they are necessarily wrong. That may be their experience and their personal perception, but that bit of the story does not match up with what we see from the national numbers. On the risks of the 30 hours, we are in exactly the same position as the National Audit Office. There are risks, but the question is how you manage them. We would not put the case as starkly as the pre-panel did. As I have said during this hearing, our bottom-line position is that this is an area of strength for the UK. There are very few other areas on which we would be ranked fourth in the world across a public service. It is something that successive Governments have invested more and more in, and they have rolled the entitlements out very successfully. We believe that we have a very strong base on which to build going forward, which I don’t think is the implication you would take from hearing that evidence.

Mr Bacon

I listened to them at length, and I got the impression that things are in deep trouble, which is not the impression that I got from reading the Report. I wasn’t aware of the fourth in the world figure.

Chris Wormald

That’s from the Economist Intelligence Unit in 2012. They did a big study across the piece.

Mr Bacon

Which are the areas on which you most agreed with what they had to say or thought they had the greatest validity?

Helen Stephenson

Speaking as somebody responsible for developing the programme, the local variability and the issues around prompt payment are things that I have definitely heard as part of our consultation on developing the programme. We are trying to do something about that through the consultation. That’s something that resonated with me and my team.

Mr Bacon

You said that you’re in the middle of a consultation process. If these groups want to bring you more evidence, you’re still in listening mode. Is that right?

Chris Wormald

Absolutely.

Helen Stephenson

Absolutely. We are always in listening mode.

Chris Wormald

We talk to provider groups all the time. Inevitably, providers want to lobby for more money—that’s what they’re for—and of course we have to make judgments about the use of money against other priorities and our duty to the taxpayer to spend less. That’s a perfectly healthy debate. I am not surprised by where they were, but likewise we don’t necessarily agree with them.

Chair

I am aware that we have a vote at 5 o’clock, and I have one last point that I forgot to raise.

John Pugh

I’m tortured by the thought of market failure. One solution to deal with market failure, which was suggested in the past by Elizabeth Truss in a Department for Education pamphlet, is to alter the ratios. Is that ruled out now?

Chris Wormald

That is not on the current agenda.

John Pugh

Sorry?

Chris Wormald

That is not on the current agenda.

John Pugh

Oh, good.

Chair

One thing that’s been raised by local childminders is a real concern about the delay in DBS checks. We’re in London, so that’s often down to the Metropolitan police. I used to be the Minister responsible, and the problem doesn’t seem to have got any better in the last six or seven years. Helen Stephenson, I wonder whether that’s on your radar. It’s clearly a big issue. If you can’t get your child, your lodger or your partner DBS checked—you have to get them renewed, obviously—that’s a big issue for a childminder who has to have safe adults in the home. Is that something that you’ve picked up on? Are you doing anything about it?

Helen Stephenson

I had not picked that up in relation to childminders, but you’ve raised it so I’ll take it away and check it.

Chair

Okay, thanks. I may write to you if we need more information.

Helen Stephenson

Please do.

Chair

Thank you very much indeed for coming along. Chris Wormald, congratulations on the new job. We look forward to seeing you with that hat on.

Chris Wormald

I will see you in that capacity very frequently.

Chair

I ask Helen Stephenson to warn your successor that we will be looking at this again. Clearly, we are keen to watch what happens with the pilots and that evaluation. It’s a matter of huge interest to our constituents and huge importance to the children who are both cared for and educated. There’s a lot of change in the landscape, so we think this Report comes at the right time. It’s like pre-scrutiny of what’s coming. We want to do more scrutiny of this to make sure it works. We’ve all got an interest in making this work, whatever our party, or constituency or whatever. We wish you well with it, but we will be watching and holding your feet to the fire on the things that we’ve said today. Presumably, you’ve got very able people behind you who took a note of the things we’ve asked for. We will also write to you with that. Thank you very much indeed. Oral evidence: Free entitlement to early years education and childcare, HC 912 12