Third Standing Committee on Delegated Legislation
Wednesday 3 November 1999
[Mr. Barry Jones in the Chair]
Draft Tax Credit (New Category of Child Care Provider) Regulations 1999
4.30 pm
The Parliamentary Under-Secretary of State for Education and Employment (Ms Margaret Hodge): I beg to move,
That the Committee has considered the draft Tax Credit (New Category of Child Care Provider) Regulations 1999.
I am glad to be serving under your fair and equitable chairmanship, Mr. Jones.
The working families tax credit and the disabled persons tax credit were introduced on 5 October 1999. They will replace the family credit and the disability working allowance. The WFTC and the disabled persons tax credit include a child care tax credit. To qualify for the child care tax credit, families will need to meet the general qualifying conditions and they will have to use eligible child care.
The rules on eligible child care focus almost entirely on child care for the under-eights. We have raised the children's age limit for help with child care cost to 14, which is in line with the national child care strategy, and to under 16 for disabled children. Very little in the rules caters for child care for that older age group, who have very different needs.
The older group of children need breakfast, after-school and holiday clubs, and such child care is increasingly available and can be run by a variety of organisations. Our national child care strategy encourages the development of those new facilities. The growing participation of mothers and fathers in the labour market means that demand for such out-of-school child care is expanding rapidly. The diversity of child care that is provided for older children means that no common feature exists to separate appropriate good quality providers from inappropriate ones.
For that reason, we took powers under section 15 of the Tax Credits Act 1999 to enable the Secretary of State to make regulations to create the category of good-quality providers. That category covers those who provide child care for children who are aged eight and over. We shall make that category eligible for child care.
The regulations will enable the Secretary of State to accredit appropriate organisations, which will be able to administer an approval system for child care providers. Details of the scheme are contained in the regulations, which also set out the minimum standards that child care providers will need to meet to gain the approval of accredited organisations. The powers will come into effect in April 2000. Parents of older children who meet the WFTC qualifying conditions can claim child care tax credit for the child care that they receive from approved providers.
The regulations will apply throughout the United Kingdom, although the function of approving accredited organisations will be executively devolved to Scottish Ministers and to the National Assembly for Wales. There will be no accreditation scheme in Northern Ireland because its system for regulating child care already covers older children.
I draw the Committee's attention to the main provisions of the regulations. Regulation 5 sets out the criteria for accrediting quality assurance schemes and regulations 7, 8, 9 and 10 and schedule 2 set out the way in which accreditation should be applied for, withdrawn and renewed. Schedule 1 sets out those matters that an organisation that applies for accreditation will need to include in the approval system. Regulation 11 sets out the requirements that accredited organisations will need to meet during the period of accreditation. That includes the provision of information to the Inland Revenue, the maintenance of records and a requirement, if necessary, to allow the Secretary of State or his nominee to attend meetings of the accredited organisation's approval panel.
Regulation 14 and schedule 3 set out the minimum criteria that a child care provider must meet to be approved by an accredited Organisation. We expect that organisations will include those conditions in their own criteria.
The scheme was welcomed by the main child care organisations and by other groups, whose views were sought early in the year. In September, we also issued draft guidance to organisations that may be interested in applying for accreditation. We have received eight expressions of interest from organisations in England that wish to seek accreditation from the Secretary of State, including local authorities and registered charities that cover the out-of-school care and child-minding sectors. Scotland and Wales expect a smaller number of applications because they have fewer child care providers who cater for the older age group.
The regulations are to be welcomed and I commend them to the Committee. They will increase the number of families who will be eligible for the child care tax credit element of the WFTC and the disabled persons tax credit. They represent a better deal for working families by making work pay, providing help for families on the lowest incomes and tackling poverty.
4.36 pm
Mr. James Clappison (Hertsmere): May I associate myself with the Minister's remarks and welcome you, Mr. Jones, to the Chair this afternoon? It is a great pleasure to serve under your chairmanship. As the Minister said, the parent Bill for the regulations, which have come before the Committee by way of affirmative resolution, is the Tax Credits Act 1999. The proposed new category for tax credit purposes, of child care provider that the hon. Lady described was introduced at a relatively late stage during that Act's passage through the House. Some have said that the provisions are complex compared with existing provisions for under-eights. As she herself noted, different considerations apply for over-eights than under-eights, who are dealt with under provisions relating to the registration of child minders.
For those and other reasons, it is entirely appropriate for the regulations to come before this Committee and be subject to affirmative resolution. Without wishing to introduce an undue element of topicality or controversy, I note in passing that it is members of another place, including at least one hereditary peer, whom we should thank for persuading the Government that the regulations should be debated and subject to affirmative resolution.
We have several questions to ask the Minister. Our paramount concern, which I would imagine that she shares, is safety. I make no apologies for covering ground that may have been covered elsewhere, because we need to be as vigilant as possible with regard to child safety.
As was said, this is a new system for children aged eight or over. Parents of under-eights may claim child care tax credit where the carer concerned is a registered child minder and an established, well-known local authority registration system is already in place. The new system approaches those issues in a different way. Child care providers for over-eights will be approved by an accredited organisation's awarding panel. In other words, there will be a two-tier system, consisting of the awarding panel, which will look at the case of a particular child care provider, and the accredited organisation, of which the panel must form a part.
With that proposition in mind, will child care providers who will seek approval under the new system be subject to the disqualification from working with children regulations? Will the accredited organisations' awarding panels be able to check whether would-be child care providers have criminal convictions? That is especially important in cases involving people with convictions for sexual offences, violence or other ill-treatment of children. Will the awarding panels or accredited organisation have access to police criminal records? Furthermore, does the Minister expect that such checks will be carried out? Unhappily, the eight-to-15-year-old age group is particularly susceptible to the attentions of evil people.
What steps will be taken to monitor the provision of child care by approved providers once they have been established, especially in respect of health and safety? The Minister told us that members of her Department will be able to participate in the awarding panels. Will she tell us about the next stage of child care? Once approval has been given to a child care provider, it is important to oversee the quality and safety of the care that is provided.
The third schedule of the regulations, which deals with criteria for the approval of child care providers, states that the provider has to
"agree to allow quality assessors and representatives of the accredited organisation, of the Secretary of State and of the Inland Revenue access at any reasonable time to the child care provider's premises and records."
Can the Minister explain how she envisages the Secretary of State going about the task of monitoring child care providers in the way that is specified in the schedule? For example, will an organisation, section or department within the Minister's Department be charged with monitoring child care providers who have received approval for looking after children for a period of up to two years and have to return for subsequent approval? What types of checks will be carried out during that two-year period and how many assessors and representatives will be charged with the task? If the Minister cannot provide a detailed answer today, I should be grateful if she would write to me in due course. Meanwhile, I am sure that all members of the Committee would appreciate a general indication from the Minister of the steps that the Government propose to take in respect of this important matter.
It would be helpful if the Minister could provide an estimate of the numbers of organisations that are involved. I believe that she said that eight have come forward. Does she have any estimate of the number that may do so in the future?
Can the Minister tell us anything new about the potential costs? As she will be aware, a range of estimates have been produced. The Institute for Fiscal Studies gave a large estimate, while the Government's estimate, which was smaller, appeared in a record of earlier proceedings. What is the Government's most recent estimate of the cost of the child care tax credit and on what statistics and assumptions is it based? How many people are eligible to claim the credit and what is the estimated take-up rate?
On those who are to be child care providers, as opposed to those who are looking to the services of child care providers to claim the tax credit, the Minister will know that hon. Members raised many questions about that subject at an earlier stage prior to the publication of the regulations. In cases involving disabled children, care may be provided in a child's own home by a specific person--if, for example, the home has been specially adapted for the care of that child. Will those who provide that sort of care be eligible for approval as child care providers, thereby generating a tax credit for the parents who pay for the care? We imagine that the Minister will want to respond on that matter.
On a more general point, is there any reason why neighbours should not register as child care providers to look after each other's children, thereby generating a tax credit? Could grandparents or other relatives be child care providers, thereby generating a tax credit? The Minister will be aware that, under section 71 of the Children Act 1989, the existing local authority provisions appear to prevent grandparents or other relatives from registering as child minders for under-eights. It would be helpful to know how the new system will treat grandparents and other relatives.
How will families in which one parent goes out to work and the other stays at home be treated? Will the new system help families in which mothers stay at home to look after their own children, which many mothers wish to do?
4.46 pm
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