Commons Sense

House of Commons · Ministerial Statement

Childcare Reform Package

28 June 2023 · 14 other contributors

Opened by Claire Coutinho Con East Surrey

EconomyBenefits & WelfareChildren & Families

Summarised by AI from the official record, so it can contain mistakes.

Read the full transcript on Parliament.uk

At a glance

Claire Coutinho raised concerns about childcare reform package in the House of Commons. A government minister responded. Other MPs also contributed.

Key points

  • Minister states progress on childcare reforms announced in spring statement
  • Working parents will have access to 30 hours of childcare per week for 38 weeks per year starting September 2025
  • Parents on universal credit can claim increased benefits for childcare costs

How the debate unfolded

MPs spoke in turn to share their views and ask questions. Here's what each person said.

Government Statement

Claire Coutinho

With permission, Madam Deputy Speaker, I would like to make a statement about the progress we have made towards delivering childcare reforms announced in the Chancellor’s spring statement. From September 2025, working parents will be able to access 30 hours of childcare per week for 38 weeks per year from when their child turns nine months until they start school. Working parents on universal credit can now claim £951 a month for one child and £1,630 for two or more children, an increase of roughly 50% from previous limits. The Government will help eligible parents cover the costs of the first month's childcare when entering work or increasing working hours by reimbursing up to 85% of these costs. These reforms aim to support one of the Prime Minister’s key priorities—to grow the economy—by removing barriers for families on universal credit. From September, local authorities will receive £204 million extra funding to increase hourly rates paid to providers, with an average hourly rate for two-year-olds going from £6 to around £8 and over £5.50 for three to four-year-olds. By 2028, the Government expects to spend more than £8 billion per year on early years education, doubling current spending. The Government also plans to invest up to £180 million in training and qualifications for the early years workforce and launch a national campaign next year to promote recruitment and retention in the sector.

Other contributors (14)
  • Robin Walker

    Question

    I congratulate my hon. Friend on this important statement. I agree with her and, more importantly, I agree with the Treasury that childcare is worth investing in. I welcome the changes to universal credit, which will make a significant difference, but I particularly welcome the £204 million of extra funding for local authorities to distribute to providers; from what the Select Committee has heard from providers, that is urgently needed. We need to ensure capacity in the system and urge her to talk to local authorities about ensuring they do not top-slice it too aggressively.

    Minister reply

    We have a rule at the moment that local authorities have to pass on 95% of the funds that they receive, and our returns show that they pass on 97%. However, as the years go on, with the amount of extra money we are putting into the system, we can definitely look at those figures and what can be done. Some of that will be set out in our consultation before the summer.

  • Ashley Dalton Lab West Lancashire

    Question

    The Minister told us about several childcare providers she has spoken to, but clearly hasn't spoken to Munchkins Village Nursery in Burscough. The nursery contacted me saying that the Government have underfunded the sector by about £2 billion and staff believe it's at financial risk despite help for parents. Does the Minister appreciate that regardless of funding for parents, they simply cannot find childcare?

    Minister reply

    I recognise that it has been a challenging few years for the sector. We used data-driven estimates to come up with our figures. There will be funding coming in September before any expansion of entitlements starting April next year and additional money by 2027-28 when we will be spending an additional £4 billion distributed via local authorities to those settings.

  • Andrea Leadsom Con South Northamptonshire

    Question

    Congratulates the Minister on her statement and inquires about the consultation on workforce qualifications, particularly regarding empathetic and supportive care.

    Minister reply

    Acknowledges the importance of empathetic and supportive care. The consultation explores flexibilities such as relaxing some level 2 maths requirements for level 3 qualifications to attract more suitable staff.

  • Tim Farron Lib Dem Westmorland and Lonsdale

    Question

    Welcomes the announcement but expresses concern about schools' financial difficulties due to unfunded pay rises, high energy costs, and deficits affecting their ability to provide childcare.

    Minister reply

    Reiterates the historic funding levels for schools and significant investment in childcare. Emphasises controlling inflation to make funds stretch further.

  • John Redwood Con Wokingham

    Question

    Supports the policies but calls for more support measures, including removing IR35 tax on self-employed and raising VAT thresholds for small businesses.

    Minister reply

    Acknowledges the importance of childcare supply for economic growth, as highlighted by IMF.

  • Claire Hanna SDLP Belfast South and Mid Down

    Question

    Welcomes progress but highlights Northern Ireland's lagging behind. Inquires about commensurate funding through Barnett formula and the impact on primary schools.

    Minister reply

    Confirms funding will be passed normally through education budget. Regular meetings with Education Ministers from devolved administrations.

  • Steve Brine Con Winchester

    Question

    Thanks for nurseries in Winchester and Chandler’s Ford, mentions the need for a pay rise and suggests removing business rates to support childcare providers.

    Minister reply

    Agrees to look at all options to support nurseries, including reviewing business rates impact. Already considered as part of cost assessment.

  • Munira Wilson Lib Dem Twickenham

    Question

    Questions the sufficiency of current funding and its impact on providers' financial viability.

    Minister reply

    Asserts thorough evidence-based work, surveying 10,000 providers and 6,000 parents to determine hourly rates. Continues engagement with providers.

  • Justin Tomlinson Con North Swindon

    Question

    Praises the Minister's achievement in funding childcare and requests for certainty on funding for recruitment and retention of staff.

    Minister reply

    Agrees to push for clarity on funding. Commends Imagination nursery’s work and its recent outstanding grade.

  • Siobhan Baillie Con Stroud

    Question

    Commends the Prime Minister and Chancellor's focus on early years growth strategy, requests for a national recruitment campaign and better payment schedules for childminders.

    Minister reply

    Agrees to consider points raised, including improving payment frequencies for childminders.

  • David Johnston Con Westbury

    Question

    Welcomes the statement and raises concerns about varying local authority rates paid to nurseries for the same work.

    Minister reply

    Acknowledges different costs across regions. Plans to consult on funding rates before summer, taking into account regional variations.

  • Sara Britcliffe Con Burnley

    Question

    Welcomes the announcement and inquires about support for local authorities in delivering expanded childcare offer.

    Minister reply

    Explains that providers must pass on at least 95% of funding rates to parents, with flexibility for administrative purposes.

  • Simon Fell Lab Barrow and Furness

    Question

    May I congratulate my hon. Friend on her statement and on the hard work she has put in to get us here? I held a roundtable of early years providers in Barrow a few weeks ago. The issue that came up time and again was that they are losing good staff—staff the kids like and the parents get on with—because of the qualifications requirements for English and maths. Can the Minister confirm whether part of the consultation will look at that? May I invite her to come and visit Cheeky Monkeys Childcare and some of the other providers in Barrow at some point in the future?

    Minister reply

    My hon. Friend is absolutely right. That was one of the things that I heard from the sector as well, particularly on the qualification barriers. I can confirm that we are consulting on that—particularly on the maths point—in the flexibilities consultation that we set out at the beginning of the summer. I would be delighted to visit him.

Shadow Comment

Robin Walker

I congratulate my hon. Friend on this important statement. I agree with her that childcare is worth investing in, especially with the changes to universal credit and additional funding for local authorities to distribute to providers. However, we need to ensure capacity in the system to meet the challenge of providing all that additional childcare and avoid aggressive top-slicing by local authorities. The announcement of £8 and £11 rates for younger years needs to be delivered so that frontline providers receive the announced funding.

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