Childcare Bill 2015-16: Analysis for Commons Report Stage (Bill 107)

The Childcare Bill [HL] had its Second Reading in the Commons on 25 November 2015, and its Committee Stage on 8 and 10 December 2015. It had already been debated in the House of Lords. This legislation applies to England only.

The Bill is scheduled to have its Report Stage and Third Reading in the Commons on 25 January 2016.

At present, all three and four year olds are entitled to 15 hours of free childcare over 38 weeks – a universal provision that is not affected by the circumstances of the parent or child, including their parents’ income.

The Childcare Bill proposes:

• an “extended entitlement” to an additional 15 hours of free childcare for 38 weeks of the year but only for a “qualifying child of a working parent”; and
• a duty on local authorities to publish information about childcare and related matters.

The second of these proposals is relatively uncontroversial.

In contrast, there has been considerable debate in the Lords and Commons about the provisions relating to extended entitlement. Key issues and changes to the Bill during its passage through Parliament to date include:

• concerns that the legislation was a “skeleton Bill” with most of the detail to be determined (through statutory instruments) after it had received Royal Assent; Peers amended the Bill, against the Government’s wishes, so that all statutory instruments made in regard to the extended entitlement had to be debated by the House (i.e. be subject to affirmative resolution). This was subsequently changed by the Government during Commons Committee Stage so that such regulations (relating to the duty to secure the extended entitlement or discharging the duty) would be subject to the affirmative when first introduced, and subject to the negative procedure thereafter;
• funding – since the policy was announced during the 2015 General Election campaign by the Conservative Party, there have been two developments in this respect:
  • originally, the policy was to be funded by cuts to pension tax relief. Prior to the Bill’s introduction in the Commons, the Government has stated that it will be funded through “an increase in public spending”;
  • during the election campaign, the Conservative Party stated that the extended entitlement policy would cost £350 million per year. The latest Government estimate is that it will cost in excess of £1 billion per year by 2019–2020.

The Bill was amended by the Opposition during Lords Report Stage through the insertion of a new clause, the effect of which would have been to prevent the extended entitlement (and the information duty on local authorities) being introduced until the Government has undertaken an independent review of the funding of free childcare, and put in a place a “sustainable funding solution” for both the existing universal childcare entitlement and the extended entitlement, taking into account the findings of the independent review.

The Government subsequently reported the findings of its funding review at the time of Commons Second Reading of the Bill, which provided nearly £300 million to fund a 32p increase in the hourly average funding rate for free childcare for 3 and 4 year olds, and a 30p increase for 2 year olds. During Commons Committee Stage, the new clause requiring the independent funding review was deleted without a division;

• entitlement – extended entitlement eligibility was originally proposed for a household where the parent(s) or carer(s) worked more than eight hours at the national minimum wage. At Lords Report Stage, the Government announced that this definition would be broadened in the regulations, to include circumstances relating to incapacity for work, caring responsibilities or temporary absence from the workplace (e.g. maternity leave). During Common Second Reading, the Government announced changes to the eligibility criteria for parents:
  • the equivalent of 16 (previously eight) hours per week working at the National Living Wage (or National Minimum Wage for under 25s);
  • an income cap was introduced, set at £100,000 per parent per annum;

Peers also debated the proposal in the Bill that the duty to secure the extended entitlement is placed on the Secretary of State, rather than local authorities (who currently have the duty to secure the universal 15 hours of free childcare). The Government explained that the duty on the Secretary of State was intended to “demonstrate to parents the importance we attach to providing free childcare provision”, although the Bill gives the Secretary of State the power to deliver the new entitlement through local authorities. The Bill was not amended in this regard.

In terms of implementation, the Government expects the extended entitlement to be available across England from September 2017, although a number of (yet to be announced) pilot areas (called “early implementers”) will test the scheme from September 2016.

The Parliamentary website has links to the different versions of the Bill and associated explanatory notes, copies of the Parliamentary debates and other relevant material at:

http://services.parliament.uk/bills/2015-16/childcare.html