National Assembly for Wales

Good morning, everyone. Welcome to the Children, Young People and Education Committee. We've received apologies for absence from Darren Millar, and there's no substitute this morning. Can I ask Members if there are any declarations of interest, please? No. Okay, thank you.

We'll move on, then, to our final evidence session on the Childcare Funding (Wales) Bill. I'm very pleased to welcome the Minister, Huw Irranca-Davies. Can I just ask you to introduce your officials for the record, please?

Yes, indeed. If it pleases you, Chair, I could ask Nicola and Owain to introduce themselves.

Hi, I'm Nicola Edwards, and I head up the childcare offer development programme.

Owain Lloyd, and I'm deputy director for childcare and play.

Okay. Welcome to all of you, and thank you for attending. We'll go straight into questions. If I can just start by asking you for an update on the various consents that are required from the UK Government on the various sections of this Bill.

Do we have progress on this?

Yes, just to say, actually, I had a note on this yesterday, so it's good timing. We're very hopeful that decisions are imminent. So, advice is with the Home Secretary and the Secretary of State for Work and Pensions. So, we would hope, in the next couple of weeks, that we will have a response on that. Obviously, it's taken longer than we would have hoped, but—.

So, consents are outstanding. All the consents are currently outstanding—

Well, no. Obviously, the Treasury consent from the Chief Secretary was provided back in March/April. So, that one is done and dusted. It's just the Home Office and the Department for Work and Pensions.

So, are you confident that the consents will be in place by the end of Stage 1 now?

Yes, because the advice is that they are in front of Ministers, we understand, and if they take it within the next couple of weeks, then we'll be firmly on schedule.

Okay, lovely. Thank you very much. The next questions are from Llyr Gruffydd. 

Bore da. I just want to ask about the provision of childcare for those in education or training. It's something that's come up regularly in evidence. Now, currently it's not included on the face of the Bill, and a number of people, you'd imagine, would be undertaking education or training in an effort to get back into the workplace, which would clearly align itself with at least what you're trying to achieve with this Bill. So, I'm just wondering what assessments you might have made in terms of the potential number of parents who could actually return to the workplace who are currently in education or training if you were to extend the provision.

It's a good question, and it's the right question, and we are very sympathetic to those who are aspiring to get back into work. But, of course, this offer is very much targeted at those parents who are working parents. So, there is an incentive there, because you can now say, 'Well, the offer is there, should you want to take it up, of the supported childcare'. But it isn't focused on those who are in education or training—it simply isn't—so we haven't done an assessment on that, Llyr. 

But, is it something that you would consider in terms of extending the offer to that particular cohort? We're not sure at the moment, in terms of longer term funding for the Parents, Childcare and Employment project, and Flying Start, of course, only offers 15 hours a week to a different age. So, I'm just wondering whether that is something you would consider.

I'm very open to considering other ways, whether it's through the PaCE programme or other ways in which we can support parents who are in education or training, aspiring to get into work. But that isn't this Bill. But, I'm very interested in what considerations the committee has had around other ways we could do it.

But, the PaCE programme is there, and we're committed to that, as long as we're funding for the period of this Government, et cetera, et cetera, but we do need to make sure that we have those sorts of programmes in place. There are also things like the financial contingency fund as well, but I'm open to ideas on that. But it isn't this Bill.

Okay, so that's not part of the plan at the moment, then.

No.

Okay.

I'm coming back to a point that I've raised regularly, which is the exclusion of children of non-working parents in the Bill. Now, universally, the evidence we've received is that people are concerned that it will have the consequence of widening the attainment gap. Do you accept that there is a risk that that could happen?

There is a risk of that happening if there aren't any other schemes in place; if this is the only one. I don't want to repeat everything that I've said before in committee, but we have, despite the clamour to extend Flying Start—. We know how successful Flying Start is at those targeted groups that it actually hits at the moment. If you look at what we're doing with Families First, all of those other programmes—. So, there is a wider range of provision out there, but, again, I sound really repetitive on this—

Well, I do as well, when I ask the questions, so don't worry about it.

I know, and I appreciate it, because I'm very sympathetic to those calls. And we are interested in exploring where we go in future—of course we are. But, there are other programmes out there that meet the needs of those particular parents and children. If this was in isolation, Llyr, I'd genuinely be equally worried. But, what we need to make sure is that those other programmes are delivering for those other sets of parents and children as well. I know this committee has said they want to see Flying Start going further. The one note of realism I'd put in place, and it's a genuine note of realism, is we're into the eighth year now of diminishing budgets. I'm not making a political point; that's the real point of it. If money was no object, we might do something quite different, but, with a targeted offer here alongside those other programmes as well, I think this is good.

So, have you considered in any way maybe, given that you're looking at all of the other programmes that are out there, bringing them all together and comprehensively offering something that's universally available?

These are the sorts of discussions we have. I've touched on this, I'm trying to be as transparent as I can. It's the right line of thinking to think, 'Right, what have we got out there, which are the ones that give the greatest value for a wide range of children and families?' There are different imperatives here, some of which are to do with issues of narrowing attainment gaps, some of them are to do with social development and pedagogy, others are to do with that team-around-the-family approach, and so on.

So, there is an issue—and I would say in prefacing my remark here—of looking at the whole piste of the early years childcare development thing, and we're very interested in that. I think that's probably as much as I can say to that, but we're having those discussions. But I would preface that by also saying—well, I'm now not prefacing it, I'm saying it afterwards, sorry. But, I would add to that that we're not starting from a blank sheet where we don't do anything in Wales. We do a tremendous amount. I can go to your constituency, to Mark's, to Michelle's constituency, and go to things that are groundbreaking work that are not innovations or pilots but are well established.

But, there is now that issue of can we, in these constrained financial times, look across the piste and say where we want to be heading, what is the ideal nirvana that we would want to see with early years development, not just childcare, but early years development, and then, starting from where we are now, how would we go there? These are very outline comments from me, but we're having those internal discussions, and I'm sure, at some point, we'd want to come back in front of the committee and outline that a little bit more.

Will we be hearing a little bit more—you've got a statement next week, I think, have you, on this?

No, it's been crunched with other statements going on, but we do look forward to coming back in the near future to say something.

Okay, well, we'll look forward to that, certainly. The guidance for the early implementer local authorities allows them to charge £37.50 for snacks and this, that and the other, for covering those particular costs. I'm just wondering whether the interim evaluation that's been undertaken, or is being undertaken, has collected any data on those charges particularly. For example, do we know what percentage of providers actually charge the full whack?

The interim evaluation didn't look specifically at that; it was more to do with take-up and issues around how both parents and providers feel about it. We touched previously in a session about the complexity of administration and things like that. However, the evaluation that is now ongoing is speaking with parents and providers as part of that programme of work. Part of that programme is to ask them what they feel about the additional charges.

It's probably worth saying that we have taken a different approach in Wales on the additional charges. There isn't any guidance or cap or limit within the England offer. We've set a cap or limit. We've heard some examples in England of parents being charged—not universally—£15 a day for food and snacks. We've set a limit here within Wales for it. I think it's £7.50 for a full day, and it's £3.50 for half a day, I think it is—

It's £4.75 for a half day.

It's £4.75 for a half day. But, this is against the backdrop that we all know that early years provision has often been quite variable in the way it approaches that. I'm used to it as a parent myself, having had three children. Some day-care providers, some nurseries, some childcare providers charge, others don't. Some charge for transport and shuttling children about between different things, others don't. So, it's not a new situation, but we have capped it in Wales. We'll keep it under review, and the independent evaluation that's now going on, part of that is asking those questions to parents, 'How does it feel?'

But, you will be in a position, not too far away, to be able to gauge whether you feel it is actually a barrier that needs to be addressed. Because clearly, some people in work will be facing in-work poverty and £37 is a lot of money.

Yes, I think we will. I think we will, and, if that is the case, we will learn from that, but it is set against that backdrop that this isn't new for parents, including parents who are in challenging situations financially as well, who have been quite used to the idea of—. I mean, part of our guidance, for example—and this is another key difference from England—is that providers in the early implementer areas, and you can translate this across into the full roll-out, should enable parents to also take their own food if they want to—so, snacks and sandwiches. I used to do that with my own children. So, to avoid additional charges, you have that option. We've tried to avoid, particularly in the early implementer stage, being over-prescriptive with this, but we have set a cap on the limit. We've given guidance saying you shouldn't force parents to avail yourself of paying whatever it is for food—allow them to bring their own sandwiches. But we will learn.

Before you reply, Julie wants to come in on the charges.

I think I'm coming to this on the same lines, really, that this could be quite a lot of money for some people. I just think it's important to make that point, because if you think that, with the 30 hours free childcare available, this may be the first time that some people have been able to work, and we all know about the in-work poverty there is. If you put a cap, there is a danger that people will go up to that cap. So, to end up having to pay that amount of money per week, I think, could be quite difficult for some families. So, I just hope you'll bear those points in mind when you look at this further.

We definitely will, Julie, and I think, in these early implementers where, one, we've set the cap—. And there is a danger, because the cap would effectively mean, if it was full-day charges for the whole week, it would be £37.50, but it's actually up to that, and we know that, at the moment, the providers who do charge, charge a variety. Sometimes it's a token charge. But we are actually saying, as well, within our guidance, that parents are allowed to supply their own packed food for children and so on. But we will monitor it and we will do it as part of the independent evaluation, and if it comes back that it is a barrier, then we will look and learn from that as well, Julie. We want to get this right, but we're trying to get the balance right against the context that this sort of provision is already out there. I take your point that, for some parents, this may be the first time ever, because of the state support nature of this offer, that they've thought of or considered to be able to avail themselves of free childcare, and we need to get it right for them. So, we will learn. That's part of the benefit, I have to say, of doing the phased roll-out.

Thank you. Llyr.

Cymdeithas yr Iaith Gymraeg, in their written evidence, said that the Bill should establish a right for parents to receive Welsh-medium childcare across Wales, really, because otherwise the risk is that it's a very piecemeal and sparse provision in terms of Welsh-medium provision. The guidance to the early implementers says that they're encouraged to provide bilingual or Welsh provision rather than required to. I'm just wondering how you'd respond to that.

We think there's more than one way to skin this particular cat, and it doesn't require a new duty. Within the Childcare Act 2006, we've already got the requirement on local authorities to make sure that the childcare provision is flexible, sustainable and responsive to local needs. On top of that, we've got the childcare sufficiency assessments, which include, within that, the demand for and the supply of Welsh-medium childcare provision. But on top of that, what we are doing is we are putting £2 million into Mudiad Meithrin, for example, for work over two years to establish new Welsh-medium childcare settings where there's a lack of provision. And, by the way, alongside that, of course, is the mapping: where are those deserts of Welsh-medium provision? I don't think we've come across many places, frankly, where there is oversupply, but we know there are areas where there's significant undersupply.

Bolstering behind that as well, we have this target, which we're confident of delivering, by the way, of 40 new Welsh-medium nursery groups by 2021, and 150 over the next 10 years. That will make a huge difference, I think, in terms of matching the supply and demand on this, if it's mapped properly, as I was saying, and targeted. But it's not only what we're doing with Mudiad Meithrin. It's not only with those aspects I've mentioned. We're also putting just short of £200,000 to Cwlwm this year, to develop the use of Welsh across the entire early years, childcare and play sector as well. Part of that is to better understand the needs in terms of developing the workforce's language skills, developing our new suite of workforce training courses, including Welsh language elements, and part of the support for that is from the National Centre for Learning Welsh. Underpinning that again is the very ambitious aspiration as set out in 'Cymraeg 2050'. So we think we've got a different way to actually deliver this that doesn't require a duty—it's practical actions that say, 'Here's where we're going'. Those aren't aspirational things we're doing—it's where we're putting money in and we're putting the targets and the challenges down.

For me, I think this particular sector is one of the essential keys to unlock the 'Cymraeg 2050' aspirations, and if we don't get it right here, then we've lost another generation, effectively.

And not just for the children, but for the workforce as well, which is fascinating—Welsh in work.

The guidance says that providers are encouraged to provide bilingual or Welsh language provision. I'm just wondering: how does the Welsh Government define 'bilingual' in that context? Because in maintained sectors in schools you have the categorisation of language status for a school, and I'm just wondering whether—because there is a fear sometimes that 'bilingual' can be very tokenistic and very minimalist provision, but you've got the whole range that reaches up to the other end as well. So how can we be confident that when it says 'bilingual' it actually does what it says on the tin?

I think your reference to the existing categories is the right reference, and the idea that, for a pure Welsh-medium setting, it's not only the day-to-day language of the setting, but it's also the language of the administration of the setting as well. But of course you do have then combined Welsh-medium and English-medium settings, and you apply the same approach there, so that both the setting and the administration is delivered within both mediums. So you have full Welsh, if you like—a full Welsh-medium setting—then you have Welsh-medium/bilingual setting, in effect.

It may be worth fleshing out a little bit about what we know is happening so far, because we are monitoring the take-up of Welsh-medium provision through the childcare offer. So, at the moment, and I'm not sure if I gave some of these stats to the committee the last time I appeared, but at the end of April 2018, 40 per cent of those accessing the offer were doing it either through Welsh medium or through bilingual, where you have that Welsh and English delivery both in the setting and in the administration. The take-up levels vary, I have to say, between the authorities, and that's why the careful mapping, I think, of this is the right way to do it. But what we are seeing, interestingly, is that the take-up is increasing. I know we're in early days yet, but it's quite encouraging to see that the take-up is increasing.

You did give us those figures in a letter earlier this month, but that is for Welsh-medium and bilingual, the percentage.

It is.

Can you tell us how much is Welsh-medium provision?

Do we have that detail?

Not with us.

But you can provide it.

Would we be able to do it at the end of the evaluation?

I think it would be more towards the end of the evaluation. What we have to do to do that, is it depends on how the setting defines itself against the categories listed in the Childcare Act 2006. There's statutory guidance under that Act that sets out the four categories.

So they self-define.

Yes, they self-define, and Care Inspectorate Wales then undertakes the inspections in the language according to the definition. We can check how they've self-defined against the setting's CIW reference number, but that's not something that we're doing on a weekly or monthly basis back in the office. That's something that is part of the longer term evaluation, so towards the end of this year.

I think that's one of the challenges as well—the self-defining.

The self-defining.

Yes, it is, because it is a concern that people say, 'Oh, Welsh-medium or bilingual', and they group them together, and very often bilingual is very far away from what some people would like or would believe bilingual provision to be. But there we are.

There are four classifications. You have Welsh medium, then the bilingual that the Minister was talking about, and then English medium with some bilingual elements, and that's probably the one that is more concerning—that you don't know how much Welsh is in that setting, and sometimes, depending on the level of qualification or ability of the staff, you may get better or worse levels of interaction with the children. Then the last one, obviously, is the English-medium setting.

Okay. But it’s an intention of yours to keep an overview of that as we go forward and clearly as the whole programme rolls out we'll need that fuller picture, really, won't we?

Yes, that's integral to how we tie in and how we contribute to that 2050 target, frankly, getting this right.

Okay. Last one from me, Chair. We've had written evidence from the National Deaf Children's Society Cymru. They note that additional learning needs isn't mentioned within the draft Bill and they query why that's the case, and they go on to say that,

'Whether it be through the Bill itself or accompanying statutory regulations, we seek assurance that local authorities will have a clear and firm duty to consider ALN requirements and consequently find suitable placements.'

I'm just wondering what your response would be to that.

I get their point, and I'm going to try and avoid using the cat and skinning metaphor twice in one committee session. One of the things that has changed very recently, of course, is the introduction of the ALN Act—that's shorthand for the Additional Learning Needs and Education Tribunal (Wales) Act 2018. So, because that is in place—and I'll just develop this point a little bit—we don't think there's a need to put this on the face of the Bill. That is now in place there. Within that legislation, it also introduces an ALN lead officer for early years specifically, for each local authority. Local authorities have duties placed on them to support those with ALN within early years. There will be guidance, but not only guidance but funds committed to the early implementer authorities within this scheme to support them in doing that as well. In addition to that, when we take forward—and I know I've mentioned to the committee before—the new suite of childcare qualifications that we're bringing forward as part of our 10-year plan, which includes not just level 2 and level 3 qualifications, but things like apprenticeships, specialist pathways are incorporated within that new suite of qualifications, and they include specialist pathways within ALN as well. The other aspect is, as we take this forward and we learn from what's happening on the ground with the funding and the guidance that's in place, our team here, and the others that stand behind us, are intimately engaged with the ALN team to make sure that we get this right. So, we're confident we can deliver that, both through this scheme, without putting it on the face of the Bill, but also through those other measures that I've talked about that are flowing out from the ALN Bill—the ALN Act, as it now is.

Okay. Thank you.

Thank you. Julie.

Thank you very much. I wanted to ask about the fact that you're reviewing now the policy that registered childminders can't offer the offer to relatives, and I just wondered what was your latest thinking on that issue.

We've had some really good discussions, both with organisations and individuals within the sector on this, and I've said to the committee one thing clearly before: this is not a childcare offer simply in providing any old childcare. We need to maintain the quality around this. So, we're very much focused on providers that are registered and inspected. So, I'm just setting that out clearly once again.

But with regard to the issue of childminders, currently there is a specific exception within regulations under the Children and Families (Wales) Measure 2010 that makes it clear that they're not considered a childminder to a child to whom an individual is related. There was good intention behind this originally. It was intended to ensure that, for example, grandparents were not accidentally captured by the legal requirement to register as a childminder if they were caring for a grandchild. It was intended for a good reason not to capture them within a legal framework that they didn't want to be part of.

However, we have had some good discussions, and I can't give you a full update today, but I've said before that I'm willing to look at that legislation again because the balance probably needs to be redressed. What is clear from the Bill that we are taking through is that legislation is subject to the affirmative procedure. So, if a change were needed, I'd be happy to consult on those draft regulations and give the committee here the appropriate time to scrutinise them as well. So, that is where we are at the moment. We don't have a definitive position on this, but the discussions are ongoing, and they've been, I think, productive as well. It wouldn't mean changing the scope of this Bill. It would be within those affirmative regulations that flow from it. But that's where we are at the moment, Julie.

Right. That sounds helpful.

Yes, we're hopeful of getting to a good conclusion on this that will satisfy the desires of those out there who share with us the aspirations to have a quality-led childcare offer. We are cognisant of the demand from—it's not only, by the way, from grandparents, where grandparents have been prominent up there within this, but from those who say, 'Well, we are registered childminders already. It's just that we have little Johnny or Janet who is also related to us within this setting.' So, what we're trying to work through is the regulatory complications of how we would do this, and it may mean going back to some of the original Orders to unwrap something that was meant, in a good way, to protect grandparents who did not want to be caught within the original legislation of 2010.

Yes, I understand the points you're making, but we are asking about registered childminders, you know. We're not asking about ad hoc arrangements, basically.

Indeed, and that's why we're exploring it.

Yes. And there would be the opportunity for this to be voted on and debated in the Assembly through regulations. 

Absolutely. Yes. Because it's subject to, under the proposal here, under this Bill—

It's not this Bill.

Sorry, under the previous Bill, under the 2010. Because it's under affirmative regulations, we would need to bring it back, consult on draft regulations, and there would need to be a consultation because there are some complexities around this, and it would be back in front of the committee then for the appropriate time to scrutinise them.

So, just to clarify for the record, it's the children and families Measure that you're saying would be subject to the affirmative procedure and on which you would be looking to consult further. The arrangements about who are covered are currently in this Bill in the administrative scheme rather than in regulation.

Yes, that's correct. Yes.

Okay. Thank you.

But this would be in regulation.

It's currently set out in the Child Minding and Day Care Exceptions (Wales) Order 2010, which was amended in 2016 to increase the age of childcare up to 12. That Order was made under the affirmative procedure; any amendment to that Order would need to be made under the affirmative procedure, and it is under the 2010 Measure. 

Thank you.

Fine. And then, details of the hourly rate paid to providers are to be set out in the administrative scheme rather than in regulations. Why has this been left to the administrative scheme rather than—as it's obviously very important?

Yes, it is very important, but it's simply because the Bill that sets out Her Majesty's Revenue and Customs arrangements doesn't necessitate within that—. That sets out the issues of eligibility. It doesn't set out issues to do with payment and providers, so those can be set out more appropriately within the administration scheme of the offer. So, the hourly rate thing, such as the information on where and how parents can take up the offer, who can provide the offer, and the hourly rate, it's more appropriate to set them out in there rather than in this technical Bill that allows HMRC to deliver the offer for us as an agent.

Right. So, would the Assembly be able to debate, or scrutinise, the fees under the scheme?

It's an administrative scheme; it's not laid and debated in the same way as regulations or Orders. It effectively would cover the operational matters around the delivery of the childcare offer rather than the more technical aspects around data sharing to establish the application system that the Bill covers. I mean, there is, theoretically, no reason why the Assembly could not table a debate on it, if that's what it wanted to do. 

I just thought it's an important issue. The Assembly may want to scrutinise the amount.

Yes. And they can, if the Assembly want to.

I think it's also important to bear in mind, though, that the rate that we're piloting at the moment through the early implementation programme is based on data around what childcare providers were charging at a particular point in time based on when that data was collected. So, it's 2016 data. It's something that we'd need to come back to and look at on a regular basis to make sure that what we were doing allowed for the sustainability of the sector. Putting it in the administrative scheme allows for us to have that flexibility to support the sector and ensure its sustainability and that we don't interfere with market principles as well.

It's just that in some of the evidence that's been given to us the amount that's being paid has been raised as an issue in relation to what's being paid for the foundation phase delivered in non-maintained settings, because it's obviously more. So, I just could see that it could be an issue that may need to be addressed.

Yes, I agree, and we would have no difficulty—. I would have no difficulty as the Minister coming back in front of the committee to discuss aspects of the scheme or the regulations. We'd be happy to do that because it is an important element, but it falls outwith this particular Bill because this Bill is fixed on the eligibility and the application, as opposed to the provider, the guidance to parents, the hourly rate. But I'd have no difficulty in coming back because we are learning from the foundation phase about the appropriateness of that, and what the impact of that is on the foundation phase and so on.

So, it would be an interesting aspect to come back and explore, and we'd have no difficulty in that. We're very transparent about this, quite frankly, and we're learning on the ground at the moment. But it's simply not appropriate to put it here within the Bill, which deals with eligibility and applications.

But wouldn't it be appropriate to put it in the regulations so that there was at least a guaranteed level of scrutiny for the Assembly?

I think the key issue is that it's not associated with what this Bill enables particularly around the eligibility checking. So, HMRC have no role in terms of the funding rate and no role in terms of the payments. So, I think there may have been some—evidence that was given to the committee may have suggested that HMRC would be doing the whole lot; HMRC are just going to be looking at the eligibility and the applications in terms of the offer. The payments system is not something, yet, that we've come to a conclusion on, but, currently, obviously, that's being done by local authorities. So, the scope is quite narrow in terms of wider—in terms of getting into the payments and who can provide and so on, as the Minister says, which is currently in early implementer guidance and would be an administrative scheme.

So, the very straightforward answer, Chair, is that the hourly rate, like some other aspects, does not fall directly within the scope of this Bill, particularly. And it doesn't fall within the primary legislative part of this on the face of the Bill, but neither, then, within the secondary, but it does fall within the scheme. It falls outwith this Bill. So, if you were to put the hourly rate within this, either within regulations or on the face of the Bill, HMRC might well look at us and say, 'Hold on, what's this got to do with us?'

Okay, thank you. Although it is the childcare funding Bill, so it is difficult to understand why it wouldn't fall within the remit of the Bill, really, but I'm sure the committee will want to return to that. The next questions are from Mark.

Minister, why is the explanatory memorandum—why does that have so much wider a scope than the Bill itself here?

Well, yes, we were aware of this. Even though the Bill is narrow and technical and it effectively puts in place, if it is passed by the Assembly, an agent to deliver the eligibility and application aspects of this offer for us, it is set in the context of the wider policy offer. I appreciate, then, that leads us into all sorts of other areas, but the Bill itself is very narrow. I think that's why the explanatory memorandum touches on the wider policy, puts it in that wider policy context, because not to refer to that would seem slightly odd.

Yes. It's a consideration for the committee in these hearings as well.

The Bill does set up a dual-strand system where, currently, we have parents applying to the local authority for the minimum of 10 hours provision and then this Bill is going to require them to apply to HMRC for the up to 20 hours. Doesn't that dual-strand nature introduce unnecessary complexity and potentially cause confusion for parents?

I can appreciate that it could add—. Because it's another programme. These aren't the only two programmes—there are many programmes delivered for parents and families through local authorities and it falls into that general thing of how do you make it clear and simple and get the information and the signposting in a very straightforward way. It can be complicated for parents to navigate the existing programmes that are out there. So, there are a number of ways that we can do this. One, which is specific to this offer, is that we have behind this offer—and we're learning from it already with the early implementers—a communication strategy of how we communicate to parents not only the foundation phase and the childcare offer, but also the child tax credit element. We've touched on this with the committee before. When a parent comes forward and says, 'I'm interested, what's this childcare offer?' they should also have explained to them, 'Well, actually, it sits alongside this other one and this other one that you might be interested in. Now, can we help you do this?'

So, our communication strategy that underpins this offer takes that into account and we'll refine this as we go forward, based on the lessons we're learning with the pilots. We also, of course—. There is also funded, within every local authority, a family information service and part of their role as well should be to actually give clear signposting between the different programmes, what is available to families and how easily to access them as well. So, it is a complicated structure out there of the different programmes enabled or provided through local authorities, but there are mechanisms out there to do it. But we're adding to the direction and signage on this by a communication strategy around this offer and we've made it clear, as we roll this out, that we want to not simply respond to a parent who comes forward who says, 'I'm interested in the childcare offer', but that we need to say to them, 'Right, just to make you aware, this sits alongside 10 hours of foundation phase, perhaps, in your area—or in some areas it may be more. It also sits along a child tax offer if you want to avail yourself of that,' and so on. So, it's a much more holistic, 'We've got you, let's give you the full advice.'

Okay, but the foundation phase 10 hours-plus and the up to 20 hours of further childcare that we're doing through this programme—is that not going to lead to quite widespread bussing of children from one venue to another? And is that really in the best interests of the children?

The first thing to say in answer to that is, again, this isn't new, and many parents are used to this idea of doing some sort of handovers or either organising their own wraparound, which is sometimes provided by their own relatives, or friends or neighbours—I've done that myself—where you take it in turns—. Alternatively, existing childcare providers find a way to link up with different settings, so after-school prorvision, school settings, Flying Start settings and so on. It is difficult, but we're working from a situation that is already there on the ground. However, I think we can do more, and that's one of the things that we're learning from these initial phases already.

I think one of our focuses, going forward, should be to look at where we can increase—and it won't work in all areas, by the way, I'm thinking particularly of rural areas, but, where we can increase co-location, I think that's a worthy thing to encourage, and to see ways that we can work with local authorities and the independent sector and social enterprises to look at co-location. That co-location would not have to be in a maintained setting, though it could be. In fact, we do already have—and I think the committee has taken evidence from some who are looking to take forward an additional, in maintained settings, combined childcare offer, linking into foundation phase, linking into then the school settings and so on. But it could equally be provided, with willing local authorities, perhaps in a rural area by the non-maintained sector within a local authority supported setting outside of the school environment, but, again, where there's co-location of both provisions. That, we think, is a really good way forward as we look at the phased roll-out to try and find more ways to do co-location and collaboration.

Minister, if you're keen to facilitate that, what about looking at the implications of article 14 of the Child Minding and Day Care Exceptions (Wales) Order 2010, which exempts schools from registering with CIW? I agree, to the extent they're inspected by Estyn and registered by them, that it doesn't necessarily make sense to require them also to be registered by another body, but when their very exemption from that leads to them not being able—legislatively, makes it unlawful for them to themselves offer this childcare element—. Does that make any sense?

Yes, it does, and one of the benefits from learning what we're doing at the moment—bear in mind what I said: this context already exists on the ground. What this childcare offer is doing is fleshing out some perhaps improvements that we can make. I'm quite happy to look again at that Order. In fact, I'm happy to commit to considering this as part of our ongoing review of these programmes, because it might unlock—we're not seeing that, by the way, as a major impediment, because we already have providers who are choosing to do it. And, as I said, I think the committee itself has had some evidence from some local authorities who said, 'We don't see this as a barrier, we see the attraction of this offer, combined with the foundation phase, as something we can take forward.' But, if this is an impediment, I'm happy to consider looking at that legal impediment and seeing whether we can unlock it.

But if a school has to set up new structures, be that partnering with an organisation and then having a contractual basis for them supplying the childcare on the school setting, and the rental arrangements on that and the implications we may discuss later for capital investment—or we've had other schools where the governors have had to, themselves, and governors become a company limited by guarantee in order to provide the childcare through a separate legal structure—how is that anything but an impediment? I mean, congratulations to people who are getting round the impediment, but surely it is an impediment.

Mark, I absolutely agree with you that, technically, it cannot but be an impediment, because you have to leap a hurdle to do it, but there are those who are already saying, 'We're happy to leap that hurdle and do it.' However, it's something that I'm more than happy to consider as part of the review of this, taking it forward—to look at that Order that puts that hurdle in place and see whether we need to remove that. It's something we're very live to, but providers out there are choosing to leap that hurdle already and getting on with it. But, yes, that's not something that we're ignorant of, and we think it's worth looking at that, to be honest. 

It's the same Order that covers the issue with childminders. 

It is, yes. 

So, we're going to be reviewing it as part of that process. 

It's an Order that has a number of issues, which probably the time is right to review. As Nicola says, the childminding one is one of them, this is another, and there are some others that— 

How about putting it on the face of this Bill, since this is the vehicle that's leading us to this consideration? Why do it through a separate, new regulation? Why not decide what we want and put it in the Bill? 

I think it makes sense to do it as part—. Yes, I think there's a logic. Because we're already in the discussions and looking at the review that we've already mentioned around that specific Order, I think it makes sense to tie the two together and think about this very carefully, about how to do it properly. And that Order is already in place; that's the legal place to unlock it, and we're engaged on that at the moment. So, we could be in a situation where we're bringing forward a parallel piece of work to this Bill, and we're happy to keep you updated on that.  

The 2010 Measure already sets out the definitions of what is classed as childcare, what is classed as childminding. It's where those definitions sit, and that's why the exceptions Order sits under that. So, I think to include those definitions again in this piece of legislation would not really be the best use of Assembly time or procedures necessarily, because the scrutiny for it has been done previously. 

Okay. Estyn referred to there being an interim document on the evaluation and monitoring, I think, of the pilots. Can you let us know where we are on that, and is that something that may lead to amendments at Stage 2 from the Government? 

Yes, I don't have anything further to add to the feedback I gave on my last appearance to committee. Some of the feedback we had from the—. We haven't had an interim report presented to us. What we've had is interim feedback given to me and my officials, and the interim feedback touched on things such as communication difficulties with parents within local authorities who didn't have full roll-out. It was that thing between geographic borders, 'Hold on, I live down the street—why haven't I got it?' and that was just part of the roll-out, the phased roll-out, we have. It touched on the administrative burden on parents that they were feeling, the administrative burden on local authorities, but we haven't got an interim report—we're waiting now on it. I think that would be an interesting opportunity for the committee when we have the full report, which will be in the autumn of this year.  

And, if we're looking at streamlining the administration, what about the inspection regime? We've got Estyn from the maintained settings—the 10 hours foundation—and then when that's non-maintained settings you have both Estyn and CIW, and then you have CIW alone for the non-maintained settings for the childcare offer. Is it sensible to have those three distinct inspection regimes? 

I might bring colleagues in in a moment, but we're already doing work with CIW and Estyn to look at how we can both integrate the inspections but also integrate the production of the reports that flow from those as well to make it more streamlined. But I don't know, Nicola or Owain, do you want to add to that? 

No, just to say I think Estyn or CIW might have alluded to it in their evidence, but they do currently have a project that is looking at taking a joint inspection framework forward, so that particularly those settings that are delivering both childcare and the foundation phase don't have to go through the burden of having numerous inspections. So, I think that is a really important piece of work. I think, really, that is looking to be rolled out from early next year. So, I think that's something, hopefully, again that will help settings. But we're not unsympathetic to the points that have been raised in terms of dual inspection processes.  

And, just finally from me, on the bussing of children around, you said, Minister, it's something that's happened already but it would surely be accentuated by the Bill and the plans, at least in their current form. Are you aware of any other country where this happens to a significant degree? Prior to moving to Wales three years ago, I'd never seen these trolleys of little kids being bussed around from one provider to another, and I just wonder if we've set up and are developing the system in such a way that it leads to this, and is this really what we want? Section 8 of the Learner Travel (Wales) Measure 2008 refers to travel arrangements to and from nursery education, and provides for you to make regulations in this area. What do you want to see? Is this a good thing or something where we should reconsider policy to minimise it? 

You mention international examples there, so are there other countries—

Or anywhere else. It's just this thing of having so many different types of nursery and childcare provision that it requires lots of children to be bussed around from one to another. Is this a uniquely Welsh thing? 

I'm not sure it's uniquely Welsh, but it's certainly—. I should imagine it's common over the border in England as well, this idea that there's a variety of childcare providers, different settings. And, in fact, we would be supportive of that, because we're not starting from a blank sheet; we have a diversity of provision out there, both of childcare—. And, sometimes, when you refer to childcare, some people refer to it in a slightly derogatory way. Actually, the advances that we've had in childcare over recent years are significant in Wales. Childcare is child development as well. Some of the programmes that have developed within childcare settings—. When I go and visit a childcare setting in north Wales that's doing childcare, plus Flying Start, plus links with the wider team-around-the-family stuff—. So, we're supportive of the different settings, but that does then give a slight clunkiness to it, which means that we inherit the system where, already, parents will be used to making arrangements sometimes. 

However, I think one of the ways forward is that idea of increased collaboration and increased co-location as well. But, I say again: that doesn't mean that it all necessarily has to be on maintained settings. It could be in rural Powys, in non-maintained settings, with the support of the local authority, saying, 'We want to do the early years, child development, childcare, with an independent provider or a social enterprise', and we'll support them in doing that. 

You mentioned the Learner Travel (Wales) Measure. Clearly, we're aware of that. I haven't had detailed discussions with the Cabinet Secretary about that specific Measure in relation to this offer, although we've discussed this offer and how we work together on it on several occasions. But we are used to it, both here, and I suspect, in England, and I suspect this is not unusual, unless you look at countries that have a far more integrated system with a different history behind it as well. So, if you look at some of the Scandinavian countries—bolted on, one site, everything co-located, built from the bottom up, if you like. It's a very different approach. We don't start from that basis. We are used to in this country, I suspect in England as well, seeing now the regular shuttling of children about, not by planes, trains and automobiles, but my multibuggy prams or snakes along the paths and so on. It's something that exists already. 

Perhaps I wasn't very observant, Minister, but I never saw this in England. [Laughter.]

Oh, really? Certainly, in my discussions with parents that are still living in London and elsewhere and down in Bexhill and places like that, they are used to exactly the same scenario. It's what we've inherited. And I wouldn't want to diss—sorry 'diss' that's a very non-committee-like word—I wouldn't want to disrespect the legacy that has evolved with a very diverse sector, a very strong sector. Some of the strength of the sector comes from its diversity. Some of the roll-out and the economic impact of this will come from rolling that out further through the country, in some places where there cannot be co-location, where there cannot be a purely maintained sector. So, we've got to build on that diversity, but make it easier. And I think the increased collaboration, increased co-location, and working with local authorities as well to persuade some of those that a good way to look at this would be, not only to provide on their own premises, but to look at other settings and co-locate there. 

Okay, thank you. The next questions are from Hefin. 

Thank you, Chair. Can I come back to the hourly rate, and particularly the unintended consequences on the provision of the foundation phase? Local authorities pay non-maintained providers a rate that they choose for the foundation phase, yet the set rate for the childcare element of the offer will be £4.50. So, we've seen evidence in committee that one authority pays £2.20 for the foundation phase to non-maintained providers. Wouldn't it make sense, then, that if you're a non-maintained provider, and you're getting £2.20 for the foundation phase, but you get £4.50 for the childcare offer, to stop the foundation phase and take the childcare element of the offer? And, ultimately, what it will mean is, amongst non-maintained providers, you see less foundation phase delivery. 

We definitely do not, Hefin, want to undermine, in any way, the foundation phase, and we are seven, coming on to eight, months with the early implementers. We're learning from it. We are aware of some of the evidence that the committee has had, and some of the discussions we've had as well, including with the Cabinet Secretary for Education around how we take this forward. This, again, I would have to say, is the good thing about phasing the roll-out, so we can see how this works. I think part of the solution within this, bearing in mind those discussions I'm having with the Cabinet Secretary as well, is to do with that co-location, so we can guarantee that both offers are being provided in the same setting, that people are not choosing, because of the difficulty of moving parents from one to the another, to say, 'Well, frankly, I'm going to go for the other offer down the road.' Also, it's so that childcare providers don't say, 'We're only going to provide one.' So, that collaboration, where we say that you can co-locate the provision of both offers within one childcare setting, and it could be an independent provider, so that parents can avail themselves both of the foundation phase 10 hours and the 20 hours, again—.

What this has flagged up, I think, in the early months of the early implementers, is it's not simply the hourly rate, but it's the practical choices that are made by providers and parents. It's not the hourly rate per se. If we can make it easy for both offers to be provided, either on the same site, or within spitting distance—and I know one of these provisions that's basically a walk around the corner, to the next provision—parents will say 'No problem', providers will say 'No problem'. But we've got to make that work. We are aware of the issues around the hourly rate as well, although we're not picking up at the moment that that is causing any real difference to the roll-out at the moment, where people are fleeing in the early implementers from foundation phase elements.

This is unlikely to be in the early implementers, though, isn't it? It's more likely to be when there's a culture of using it—an understanding of what local authorities offer with non-maintained providers for the foundation phase. Do you have that information?

In terms of how what local authorities—

What local authorities providers pay non-maintained providers for the foundation phase.

Yes, I believe that colleagues on the foundation phase side within Welsh Government will have that information.

Have you asked for that information?

We've seen that information, yes. That information, obviously, sets out a number of things. It sets out the variance in terms of hours, so, as you would have heard, there is a variance across local authorities in Wales in terms of how many hours are provided. I think it looks at the rate, and a set of other issues. So, that is certainly information that is to hand.

But isn't it a simple consequence of demand and supply—if you get a higher rate of funding for the childcare element, and a lower rate for the foundation phase, but you've been delivering the foundation phase, you're going to crowd out your foundation phase amongst maintained providers? It's a simple consequence.

Well, as the Minister says, there's a risk there, yes.

So, how are you addressing that?

Well, as the Minister says, we haven't seen any evidence yet of providers jumping the foundation phase to just provide the childcare offer. It's early days. And, actually, I think it's quite interesting that Caerphilly, in their evidence, said that, while they had lost one provider, they'd gained three or four, because the provider could see the benefit of doing Flying Start, foundation phase, childcare offer—that is a benefit to them as a business, in terms of what they can provide the parents. But I would say it's too early to tell; it's something that we have to look at carefully, as we roll out further, but we have no substantial evidence at the moment to suggest that that is happening.

Okay. I just fear that this could be something that could creep up on you, if it isn't something that—

Well, it's definitely not creeping up on us. We're aware of the evidence that you've taken as a committee, but we've also had dialogue with stakeholders over this within local authorities, and others. But we're also directly engaging now, and we have been for some time, with the Cabinet Secretary for Education on this as well. And that is why we've already moved our thinking to ways in which to further encourage, motivise and incentivise that idea of co-location and increased collaboration, even if it is on two settings close by, where there is seamless provision between the two. But we are also cognisant of the issue around the rate as well, and we're having those discussions. We've not come to a conclusion on that yet, because we're still seven, eight months in. But it's not going to blindside us on this. The work that you've been doing, the discussions we're having, are flagging this up as a concern, and we're trying to anticipate that, and work our way through this. And we think there are ways to work our way through this.

Okay. So, let's move away from non-maintained providers to local authorities. Do you have a concern that there's no legislative basis for the 10 hours for the foundation phase?

No. I can see where you're going on this—that, if you bolted it down, then that would be guaranteed, and everybody has to, and you'd have to say to, not simply the providers, but parents as well, 'You must avail yourself somehow of the 10 hours' foundation phase.' And I'm not sure that we could do that. I think it's more making it simple and easy for parents and providers to use both the foundation phase and the childcare offer together.

But the point I'm making is that the 10 hours for the foundation phase is convention—there is no legislation that says local authorities have to have 10 hours. So, you could end up with fewer than 30 hours in your childcare offer. 

The legislation that covered this is part-time early education and then, obviously, there's guidance that we've issued, as a Government, that sits underneath that, and we directly fund the 10 hours in money that we provide to local authorities. The money goes to the revenue support grant and also there's some additional funding that goes through some specific grants to provide some of the top-up funding around qualified teacher time and ratios. So, in terms of the 10 hours, because that's something that Welsh Government funds, and we give them the money to do—

It's not ring-fenced—or is it ring-fenced?

Not if it's in the revenue support grant, no.

It's in the EIG part of the RSG, as I understand.

The education improvement grant covers the top-ups for the teacher time and the ratios. But the core funding for it has gone into the RSG—the local government settlement—so it's not ring-fenced, but because they get the money to do it, 10 hours is the minimum that they will fund. I appreciate that some do choose to do more—

But we know that by convention. So, having experience as a councillor, and the pressures you get, they could say, 'Well, look, our childcare offer is covering adequately this; we could reduce our foundation phase.'

I think it was some of the local authorities that came to give evidence to you that said that that's not something that they've been looking at—it is something that their cabinets could choose to look at, but it's not something that they've been asked to look at.

But you will know that this has been an issue prior to the childcare offer coming along, because, obviously, the move that Rhondda Cynon Taf made away from full-time—that wasn't impacted by the childcare offer, that was a decision—

But the childcare offer could add a further pressure—

It could, but we're not seeing any evidence of that at the moment.

We've got a few Members, now, wanting to come in on this, because it's a very important point. I've got Mark, then Llyr, and then I'll go back to Hefin.

Rhondda Cynon Taf had a very generous offer and some parents were disappointed when that was taken away, but I'm not quite sure how that's relevant to the 10 hours ostensible minimum. The Welsh Office issued guidance, I think in 1999, referencing that 10 hours, but we're not aware of any further reference by Welsh Government, since the Assembly was set up, to this 10 hours being the requirement, so it could easily be chipped away, surely.

Foundation phase is not something that I directly work on and it—

And it's not my lead either.

But it's important for your programme.

It's very important in terms of the way these two offers work together, because the 10 hours is part of the 30-hours offer. Although, of course, as we say, some local authorities choose to provide more. It may be worth reflecting on the feedback that we've already had from local authorities within the early implementer authorities. We've got seven local authorities that we've been working with since 2 September who offer more than the minimum of 10 hours that Welsh Goverment—. Sorry, of the seven local authorities we've been working with, two of those local authorities offer more than the 10 hours minimum to three-year-olds. Three local authorities—

You say 'minimum', but where does the minimum come from? Why are you saying 'minimum'—what's the rationale for that?

That's what we fund.

That's what we fund. So, the funding is for 10 hours.

But it's not ring-fenced.

No. Part of it isn't; part of it is—

It's part of the education improvement grant.

But surely it's unsatisfactory to base this on a non-ring-fenced thing and guidance, at least as far as we've been able to find, that dates back to the Welsh Office prior to the establishment of the Assembly. That's not sufficient for the 10 hours, if you're now putting in this additional 20 hours, which is meant to be additional but might not be additional if there's not a requirement on local authorities, actually, to do 10 hours.

I think what might be helpful to the committee on this is if, in our discussions with Kirsty, we co-ordinate a response to the committee on this issue of the 10 hours—how the funding flows behind it and what protection it has. That might be helpful, because I'm not the lead on this. But simply to add here: three local authorities are offering more than the minimum of 10 hours that are funded as part of the funding that goes into the RSG for four-year-olds. None of them—none of the local authorities have informed us of any plans to actually change the foundation phase entitlement.

But with that in mind, Dawn Bowden was raising this on Merthyr Tydfil County Borough Council and how they used their education grant and diverted it into grass cutting and other things. So, not every local authority is going to act as responsibly as every other. So, there's a concern that if you don't have a control on this, it could certainly happen, and I think that you've acknowledged it could happen.

Theoretically it could happen, but we're having no indication from local authorities that they want to do this; we're having the contrary—we're having local authorities saying that they want to continue to invest in the foundation phase, because they see it as an integral part of their child development strategy within their area and the funding is given there for that purpose. So, I agree, theoretically, that you could see this, and we will provide—

But I think we've already seen a similar thing happen in practice in Merthyr, which Dawn Bowden raised in Plenary last week.

I think we are going to have to move on, but this is clearly an important issue that the committee will want to follow up.

Okay. I'll finish on the last one, then, is it?

Yes, very briefly, though. Can I appeal for brief answers as well, please? Because we've got a lot of ground to cover.

Very quickly, then, you mentioned the fact that some authorities are providing over the 15 hours. There's going to be an incentive to reduce that as well, isn't there?

We've not seen that either—

Over the 10 hours, sorry.

We've not seen that either. As I say, the feedback from those authorities is that they have no intention to modify their foundation phase offer.

Okay.

The majority of local authorities—and Nicola will correct me if I'm wrong—I think currently offer 12 and a half. So, it's five two-and- a-half-hour sessions, a morning or afternoon a week. There's no evidence to suggest they're going to move away from that to offer two hours instead of two and a half. But, it is something that, as part of the evaluation, as part of ongoing work with colleagues on the foundation phase, we have to look carefully at.

I'm concerned you're looking in the rear-view mirror rather than looking forward, because there's no evidence, but that doesn't suggest what might happen in the future.

We're going to jump on now to financial issues. Mark.

Can I ask you about the £60 million of capital funding that's been set aside from the education budget for the three years from 2018-19? How is that going to be used to support the childcare offer?

The £60 million is going to be used for delivery of the offer in its entirety, but it includes within that things such as alignment of the educational and the childcare aspects, the co-location of services. We've discussed the scope of this programme and the use of this money with umbrella organisations within the childcare sector, with local authorities and other stakeholders, with the stakeholder reference group, but we are clear that the funding needs to be used in a way that's flexible enough to allow for things like new infrastructure—so, where that's needed, brand-new provision—but also the expansion and modification of existing provision as well. Part of that is based on the mapping that's going on of where there is insufficiency of childcare provision.

So, is some of this going to be provided as grants to the non-maintained sector?

Yes, indeed.

Any idea what proportion of the £60 million may be spent on maintained versus non-maintained?

Not yet. It's too early yet, Mark. But that process of identifying where the spending is, and engaging with local authorities and other stakeholders, including independent providers, is ongoing, and what we're keen to make sure is that it's allocated and spent in the optimal way to fill in these gaps of childcare that we know exist.

And will that include schools spending it, even though they're unable themselves then to provide the childcare in that setting?

Yes. Those in maintained settings that are going to avail themselves of the childcare offer as well, and who choose to do that, bearing in mind the conversation we just had—but there are those who are choosing to do that—they can also avail themselves of this within their settings, yes.

Thank you. John.

Diolch yn fawr, Chair. In terms of the offer, Minister, Welsh Government has stated that 19 per cent of those currently receiving it do not find affording childcare difficult. So, extrapolating from that, that would equate to nearly £20 million being spent on a yearly basis on support to parents who have no problem affording childcare. In these difficult times of austerity, do you consider that good value for money?

I think, at the moment, we have got it right. If I can just flip that on its head, that stat flipped on its head means that 81 per cent of parents saw this as a useful way to actually get into affordable childcare, and that reinforces everything we've heard consistently over the years in our constituency surgeries and so on—that childcare is the biggest impediment to getting back into work. It's something that I hear regularly; I'm sure you do as well. And we have also heard, as I mentioned to the committee before, parents telling us that they are saving £200 to £250 a week on this, and that is going back into those households.

The second point I would say is that some of those parents who probably indicated that they do not find paying for childcare difficult might well be those parents who—. It's not that they're saying, 'I'm so affluent I have no problems'; it's because they also have alternative arrangements. They are able to rely on friends and relatives as well, as many do. So, they have that mixed provision of childcare. That doesn't mean that we suddenly have a whole lot of wealthy parents who are saying, 'I'm raking this in, I'm off on my holiday in the Bahamas'; it could well be people who are saying, 'This has helped me, but I was able to rely on other forms of childcare.'

But we don't really know that. That's you surmising, isn't it?

It's surmising, but we do know that over 80 per cent of parents, in response to this, say that affordability is the issue.

Sticking with the social equity aspects and affordability, Minister, Welsh Government has stated that at least 60 per cent of parents taking up the offer earn less than the median average salary for Wales, which is £26,000, and no more than 5 per cent earn more than £52,000. I'm just wondering whether any assessment has been made as to the effect of further roll-out on those figures. So, for example, when it's rolled out to areas like Monmouthshire and Cardiff, which are relatively affluent in Welsh terms, what effect would that have on those figures?

The first thing is, John, that we will keep on monitoring. I think the figures I gave you then were figures that were up to December, and we have had a chance to look at figures now that are going up to March. Again, it reflects those original figures, which is quite reassuring. So, at least 60 per cent of parents in the March figures were again below the median average wage within Wales. But we'll keep on checking this as the roll-out goes on. 

And you would accept that it will change when more affluent areas are included. 

It's reasonable to anticipate that, yes.

Hefin. 

Paul Martin of the BBC did a report for BBC Wales Live a couple of weeks ago, and they did a freedom of information request and found that there was a £6 million underspend in the first phase of the £10 million allocation. What is your response to that situation?

First, I would say that we're seven months into the offer. We've put aside sufficient funding in order to deliver this in a phased roll-out in years one, two and three, with the anticipation we roll it out entirely in 2019-20. I'm disappointed that we haven't had the full uptake within that initial period, seven to eight months in. But I did make the point to the BBC journalist at the time that this is a demand-led programme. Secondly, because it's very early, there's the whole issue around communication. Local authorities were only delivering it in part of their areas, not the full area, which is one of the things we picked up with the early implementers. There are lessons that we're learning around wider familial support, which might well change, quite frankly, when this group of three and four-year-olds have moved on and a new batch of parents go, 'Well, heck, we're aware of this free childcare offer, Gran' and take them down to there. So, all of these things could change it substantially. So, am I disappointed we haven't used the whole allocation in the first seven months or in the first year? Yes. I'd like to see it more, and we're working on that, and I think the uptake will increase. But it's a demand-led programme and we're very early into it.

I was on the record on BBC Wales Live saying I'd like to see it delivered to under-threes, not during this phase, but perhaps later, if there is an underspend. Have you done any financial modelling for delivery to under-threes?

No, we haven't, because this is very much predicated on the offer that we took forward into the last election, which was similar to the offers that were taken forward by most other major parties as well, both here and within the UK—different variations, but this is slightly more ambitious. It was on the offer very much that is described here within the Bill. So, we haven't done that modelling because it's outwith this Bill and this manifesto offer. If we weren't under austerity funding—

But if there's an underspend—and hypothetically there could be an underspend, given what we've seen in the roll-out—could you use that underspend for financial modelling for under-threes?

There could be an underspend, but it's a demand-led programme, so equally there could be an overspend.

But I'm asking about the hypothetical situation of an underspend.

We've got to decide, as we take this Bill—. I get your point, but we've got to decide, as we take this Bill forward, what we focus my officials' resources on as well, quite frankly, and the reality is that we could well end up here with the full offer being taken up and me having to go back to Mark and saying we've taken up the full—

Well, put it this way, have you got an open mind if there was an underspend?

You're tempting me.

Without your officials. As the Minister, have you got an open mind?

You're looking at a slightly different offer, and I have an open mind on where we go in the future with a more expansive offer. If there was an underspend on this one, should we use it for that? There might well be other things that we want to allocate that to. And I'm not committing to this, but this committee has actually said they'd like to see a greater roll-out of Flying Start where there are areas it isn't in. Now, which one should be the priority? So, I'm not of a closed mind entirely, but this offer is firmly based on this offer. If things were to expand in a different way, and we suddenly found we were replete with money, we'd be having some interesting discussions with you, the committee, and with Mark to say, 'Could we keep that money?' But we're not there yet, okay, because we could overspend here.  

I appreciate you going there, Minister.

[Inaudible.]

We could cut taxes—[Inaudible.]

The next questions, then, are from Michelle. 

Thank you. What assessment have you made of the potential demand for the additional childcare? 

For the childcare provision or the—?

What work have you done to actually assess how much demand there's going to be for the additional childcare? 

Sorry, my misunderstanding. So, the modelling that we've done in the roll-out is based on the best available information we have on parental eligibility for this scheme, so that's through parental eligibility and also child demographics as well. Child demographics are relatively stable, based on the Office for National Statistics material, over the next three years. So, we can see how many children potentially within this age demographic would be entitled to it. You then need to link that to the parental entitlement and the earning capacity and the hours of work. It's a working parents offer. So, we've based that on the APS—

The annual population survey. 

—which again is pretty accurate at the moment, but if there were to be a sudden downturn in the economy or a sudden uplift we'd have to adjust it. But we're confident that with the modelling we've done on the uptake—which links to, by the way, the funding, because this is eligibile parents, eligible children—we have the money in the budget to deal with the numbers that could be reasonably anticipated if they were all to take up this offer. It's an offer, though. 

Right. So, you know the maximum number you're likely to get, have you done anything to assess what the take-up is likely to be? 

That's part of what the pilots are helping us with, really, to understand parental behaviour and attitudes and who wants to take up this childcare. So, some of the work that we're doing through the monitoring that we've got and the evaluation going forward is looking at overall levels of take-up, but also, within that, numbers of hours taken up. Certainly, what we're seeing is that even where parents are entitled to the 20 hours of childcare they're not necessarily booking or taking up all 20 hours. They might only be taking up 15, because that's all they need on top of the 10 hours of education to support their working pattern at the moment. Now, that might change as parents maybe take up different employment choices, but all that information is helping us to understand what overall pattern and averages we might see in terms of take-up, and it does vary by region as well. 

Are you happy that the data that you're getting from the pilot areas can be extrapolated to the other areas of Wales? 

Yes, but this is the reason why we haven't done, depsite demand from local authorities, any blanket roll-out saying everybody will have a dib into the early implementers. We're doing it very much on learning with the right authorities—so, contrasting authorities. One of our next stages will actually be rolling it out further and part of that will be rolling it into areas that might be more affluent—sorry; affluent in aggregate—because even with those affluent areas there are going to be areas of disadvantage. 

It takes quite a while to train a childcare worker. Is there going to be a sufficient number of childcare workers qualified to actually be in place in time to meet the demand that is likely to come from this childcare offer?   

We're not waiting for the pilots to get on with that, because we've already identified, based on our modelling, what the potential full take-up of this could be, and where, also, those gaps in workforce provision would be as well across the piece. So, we've worked with the Wales Institute for Social Economic Research Data and Methods to undertake the initial assessment of capacity across the childcare sector, the number of places and the number of places we'd need to fill. It didn't consider the capacity of the workforce per se, but it was a key piece of information in the jigsaw and we are looking now at other ways to consider the capacity issues. 

So, back in December, we published the 10-year childcare, play and early years workforce plan. It's prioritising investment in building capacity and capability across the sector, raising skills and standards and attracting high-quality new entrants into the sector as well. And this, by the way, is against the backdrop as well of a sector, in some ways, like other aspects of the wider care sector, where they've got pressures on the sector itself; they have generally low wages, and all of that. But, because of those unique challenges, the workforce plan commits to investing in capacity, capability building, it prioritises support, in line with the economic action plan. We've put—I think £100,000 has been put by the Cabinet Secretary for Economy and Infrastructure into this area of the development of the workforce plan. We also have the business start-up and expansion plan, which is on top of the capital programme of £60 million we're talking about. We're also looking at things like small business rate relief to encourage employers to set up and expand as well. So, we've done that.

I'll tell you one interesting illustration of this, though, which is when I was with—. I think it was about three weeks ago in north Wales and speaking to a childcare provider who said to me, as we walked away from officials and the official part of it, and said in an aside, 'This has made the difference to me actually keeping my provision going and taking on new staff, and the reason was because this now runs for 48 weeks of the year. This is the difference between me shutting and closing'. She was employing more staff. So, we've got the workforce plan in place, we're bringing forward things like the level 2, level 3 qualifications around that. We have apprenticeships built into that workforce development as well. We have the Welsh-medium aspects within it. So, we're as confident as we can be that we're not waiting for the phases to roll out—we're getting on with it now.

Right. Social Care Wales have expressed the concern that the training colleges don't have the capacity to train up the likely required numbers of additional staff that are going to be required once this is rolled out. How are you going to make sure that those training places are going to be put in place, because they're going to have to be put in place fairly soon?

Absolutely, and, in fact, Social Care Wales are a key partner with us in doing this. So, Social Care Wales are involved with the marketing and recruitment campaign. They're undertaking a piece of work at this moment to research target perceptions of work within the childcare sector, in order to raise that idea of, 'This is a valuable sector to come in and work in'. And they're doing further research with us now on the capacity and the growth of the workforce and how we meet that.

Are you funding additional training places in the training colleges and providers?

I think what we are doing alongside, obviously, the apprenticeship route—. So, the apprenticeship route at level 2 and 3 is open to the sector, but we've also, obviously, been delivering through Progress for Success—the first strand; I think we have around 980 participants on that. We're looking at where we might be able to take Progress for Success, which is a European-funded programme, in terms of the next three to four years. So, we're in discussions at the moment with Welsh European Funding Office in terms of extending that, which will, again, give opportunity for the sector in terms of upskilling and so on, and new entrants. So, there is work going on on that.

And we're also doing some innovative stuff around later entrants back into the workforce, because many more mature workers—as well as some youngsters, but certainly more mature workers—have the skills in terms of care and compassion and those well-rounded skills to come back into the workforce, but might think, 'Well, why is childcare for me?' So, one of the things we've helped fund as well is some innovative programmes, including one by the National Day Nurseries Association, the nursery umbrella organisation, called Childcare Works. And I've seen this first hand with more mature workers—men and women, by the way, men and women—being encouraged to try working within the childcare sector within a setting. And it was quite amazing when we went up and saw some of these, how they had fitted in so well. They'd been taken on from that as full-time employees. And I think, 'There's a big and real issue for us'. We want to encourage youngsters to see this as a career coming through, but we also want to make sure that those people who come back and can commit part-time work and so on to the sector, that they get into it. So, some creative ways of developing the workforce, I think, are needed, and not all top down—more working with people to say, 'Try this out; it could be for you.'

Llyr's got a supplementary on this.

But also you need to get your skates on, really—

We do.

—because if—. And, you know, there is a question as to whether you really believe there will be full take-up by completion of roll-out in 2020, but the stats we've seen suggest—you mentioned apprenticeships—we'd need a 700 per cent increase in apprenticeships to meet the shortfall over the next two years. Fifteen hundred places currently for level 3 childcare in Welsh colleges—we'd need another 1,100 on top of that, and all of that by 2020. Well, it's not going to happen, is it?

I think it will, and it's because we're not waiting for the full roll-out to do this. We've still got—. We're working with, as I mentioned, the agencies out there, and we're already doing this on the ground. We're not at this moment—albeit that we're in the early stages—seeing that we're struggling. Even with the expansion of the childcare offer now, we're not struggling to fill those spaces. But you are right, we have to accelerate it, but we've got the mechanisms in place to do it. This will be challenging, Llyr—I entirely agree. The ambition of this for a full roll-out by 2020 is taxing us. We know the scale of this, but we're putting the things in place now in order to deliver it, and working with the agencies out there to do it.

Whilst they see it as challenging as well, they also share our ambition to do this, and the impact of this, if we get it right, on the foundational economy, of jobs in every community and every street, because people are now seeing childcare as a really good opportunity to work in, to come back to work in, or to try to work in that they've never done before. Well, the scale—it's worth having that ambition to do this. You're right, we've got to get our skates on, but we are doing it.

Okay. John's got a supplementary on this as well.

Allied to the difficulties already outlined, Minister, I think, is the question of quality as well as quantity. Obviously, we want to drive up the quality of childcare, because it's a really important job to do. We know that, in other countries, it's better paid, it's got higher status, it's a better qualified workforce. So, there's a job to be done there on top of the numbers issues. So, you know, it really is quite a challenge, isn't it?

It is, and it's not dissimilar to some of the wider challenges within the social care sector as well. If you look at what we've done in the social care sector recently in terms of saying, if you're three months in employment on a regular contract, you go to your employer and you say, 'I want a full-time contract; I don't want to be on zero-hours.' You look at what we've done with call clipping in that sector as well, and said, 'You will be paid for the time you're travelling as well as the time you're actually providing the care', and so on—all of those things.

There are similar issues here within the childcare sector, because the perception of the childcare sector can exactly be that, which is, 'Well, with less responsibility for young, impressionable children and youngsters developing, I could—and it's not denigrating at all—but I could go and work in a coffee shop; I could go and work in one of a myriad number of brand-name supermarkets'. But that's part of the work that we're doing with the agencies out there, to build up the way we perceive this sector. And, then, over time, you're absolutely right—surely all of us have got to be committed to find ways, budgetary constraints allowing, of working with independent providers as well as statutory providers, as well as social enterprises, to say, 'How do we push the terms and conditions up as we upskill it?' But I think the apprenticeship route, the NVQ 2 level, leading to NVQ 3 level and then building on the skills on that as you go through it, is the right approach to keep on pushing standards up.

We won't do this overnight; we absolutely won't. But we are not going to compromise on quality in rolling this out. We want well-qualified, well-motivated people in there and then there is a bigger job of work going forward in the childcare sector, as well as other care settings, to say how do we go even further, working with a variety of providers out there to do this. I don't think it's only a Welsh Government or a local government thing; it's how do we all do it together. And I would say that there is a good example of this, because what we've been doing in the social care sector has been working with independent providers and others in order to jointly push it up. We've supported, for example, the implementation of living wage in the social care sector. It's been funded with some of our money—£19 million—but we've also put the onus on independent providers to step up to the plate as well and help out.

Okay, thank you. Michelle, did you have anything else you wanted to ask?

Yes, there were just a couple more, I think. The national living wage has been introduced. Now, Social Care Wales have commented that childcare providers will be disproportionately affected by this. What would your view be on that and the likely impact that's going to have on the workforce?

I think one of the things that we can assist with that is keeping the rate under review that was talked about earlier on. There's been a welcome for the standard £4.50 rate at the moment, but we'll keep it under review as we go on. But we're hopeful that that might be one way that we can assist with the costs of this. So, yes. 

Okay, thank you. And the NASUWT have expressed concerns that people in the non-maintained childcare sector sometimes don't have the level of qualification, experience and training as those in the maintained sector. Is that a concern for you, and is it something that you're looking to address?

It's not a concern for us, I have to say, and we've looked at this and it's not what we're hearing from Estyn either. I hate to disagree with NASUWT, but, on this, we would. In fact, Estyn's latest annual report, and I can quote from it here—. Estyn's report reflected that provision of the foundation phase in the funded, non-maintained sector had been consistently good or better in almost nine in 10 settings over the inspection cycle. And I think they go on at some point to say that it's at least as good as those within it.

So, if I had those concerns, honestly, we'd be turning our attention to it, but we have looked at this to see is there a parity—but, actually, the inspection is saying 'no'. My personal observations from going out to some of these settings is that, sometimes, we have an outmoded idea of what some of these childcare settings are like now. As I mentioned earlier on, I'm going to childcare settings that are delivering Flying Start and delivering additional speech-language communication support for children within the setting, or dental advice and so on and so forth. So, no, I don't agree with the NASUWT on this, but we'll keep a good eye on it. But the Estyn inspection evidence is saying that it's not the case.

Thank you. Final questions, then, from John. Can I appeal for brief questions and brief answers, please?

Yes. Some practical issues, then, Minister. First of all, who will pay providers? Will it be Welsh Government, will it be local authorities, will it be a third party? I think your official indicated earlier that a decision hasn't yet been made. If that's the case, why hasn't it been made yet?

Well, I think that's right. We haven't come to a firm conclusion on it. But do we have some sort of guided ideas at the moment?

We have three options, essentially. The first option would be to do it through local authorities, and that's how it's currently being operated, so you could look at a specific grant in future years; that has pros and cons. The second option would be the Welsh Government would take a role, making direct payments, and the third option is that we would maybe look to a third party, where we have one national way of paying providers. So, there are pros and cons to each of those options. The sector have very firm views in terms of some of the key things we need to look at, particularly in terms of timeliness of payment in terms of their cash flow. So, I think there are concerns from providers at the moment in terms of maybe they're not being paid in a timely fashion. So, there are a number of things in this mix that we're currently looking at before we give firmed-up advice to the Minister—a business case in terms of which option we should proceed on.

When is a decision likely to be made?

Probably later on—

When are you giving us—?

Probably later on this year, because we do have to work through this in a detailed way, looking at the costings and pros and cons, but it's not something that we're worried about in terms of that it's going to stop full roll-out in 2020.

And it doesn't affect this Bill.

And it doesn't affect this Bill. It doesn't affect the HMRC element and the piece of work that we're doing with them in terms of ensuring that that is up and running by full roll-out.

Okay. The Welsh Local Government Association had some concerns again on practical matters. One was how and when will local authorities be told which parents will get funding through HMRC. Are you able to provide any comfort on that?

Well, again, I don't think we've taken the final decisions on that yet, but we do acknowledge the concerns of the WLGA. We're still working with them.

Yes. It's something we need to work through the local authorities as well, because obviously they're interested in this in terms of when children are taking up their early education entitlement, but each local authority in Wales has a slightly different application process for early education, including slightly different timescales and deadlines. So, we need to work out when they would actually need to know that information locally to make their decisions on place allocation, and build that into what we're doing with HMRC.

Another one of their practical concerns was their systems' ability to work together in terms of foundation phase and the offer. Is that something that's—?

It's all linked in. So, we meet the local authorities fairly regularly. In fact, I was with the early implementers last week, and will be meeting the 22 authorities at the end of July. These are the sorts of discussions that we have with them on a regular basis. We try and workshop through them collectively, so that we can all understand where everybody's coming from, and try and develop this policy collaboratively.

Okay. Okay, Chair.

Thank you very much. We have come to the end of our questions. Can I thank both the Minister and his officials for attending and answering such a range of questions today?

You will be receiving, as usual, a transcript to check for accuracy following the meeting, but thank you again for your attendance.

Thank you very much. Diolch yn fawr iawn.

Item 3, then, is papers to note. Paper to note 1 is a letter from Flintshire County Council on the childcare offer for Wales. Paper to note 2—

Could I—? Just on that paper to note 1, could we write back to Flintshire and thank them for their letter, but also ask what evidence base they have for the information that they provide? Because Welsh Government clearly only points to anecdotal evidence about the impact, and I'm just interested, if they do have some research that they've done to underpin these positive things that they're listing here, it'd be useful for us to have it as part of our evidence.

Okay. Everybody happy to do that? Yes.

Paper to note 2, then, is additional information from Welsh Government on the grace period in respect of the childcare offer for Wales. And paper to note 3 is our letter to the Welsh Government on the school organisation code. Are Members happy to note those? Thank you. 

Item 4, then, is for me to propose in accordance with Standing Order 17.42 that the committee resolves to meet in private for the remainder of the meeting and the whole of the meeting on 20 June. Are Members content? Thank you.