Clause 65 - Conditions on registration

125.     Clause 65 allows the Chief Inspector to place conditions on the registration of voluntarily registered providers and to vary or remove such conditions. Failure to comply with a condition is an offence.

Clause 66 - Regulations governing activities

126.     This clause allows the Secretary of State to make, after consulting the Chief Inspector, regulations governing the activities of voluntarily registered providers. It is not an offence to breach such regulations, but registration may be cancelled.

Chapter 5

Clause 67 - Cancellation of registration

127.     Clause 67 deals with cancellation of the registration of a provider registered on the early years register or either part of the general childcare register. It requires the Chief Inspector to cancel registration if a person becomes disqualified from registration and allows him to cancel registration where requirements are not met, conditions are not complied with or fees are not paid. Subsection (3) to (5) allows the Chief Inspector to cancel a childminder's registration if they appear not to have provided any relevant childminding for more than 3 years of their registration.

Clause 68 - Suspension of registration

128.     Clause 68 allows the Secretary of State to make regulations to allow a person's registration to be suspended in certain circumstances. Where a person who is required to be registered has their registration suspended, they may not during that time provide care for children in respect of which they are required to be registered and a person who does so commits an offence.

Clause 69 - Voluntary removal from register

129.     Clause 69 allows registered providers to give notice to the Chief Inspector when they wish to be removed from any of the registers. The Chief Inspector is required to remove from the register anyone who has given notice unless the Chief Inspector has already sent notice of intention to cancel registration (or notice of a decision to cancel registration) and he has not yet decided against this step (or the time for appeal is still running). However, the prohibition on removal in those circumstances does not apply to providers who may provide childcare without registration.

Clause 70 - Termination of voluntary registration on expiry of prescribed period

130.     Clause 70 provides for the Secretary of State to make regulations setting out how long voluntary registration may last.

Clause 71 - Protection of children in an emergency

131.     Clause 71 allows the Chief Inspector to apply to a Justice of the Peace for an order cancelling registration, varying or removing a condition on registration or imposing a condition without giving notice to the registered person. The Justice of the Peace has power to make the order if it appears that a child for whom care is being provided by that person is suffering or is likely to suffer harm. Harm and significant harm are defined by reference to the Children Act 1989 under which harm is defined as ill treatment or impairment of physical or mental health or physical, intellectual, emotional social or behavioural development, including impairment which may be suffered from seeing or hearing another person being ill-treated and "significant harm" by reference to the child's health or development as compared to what could reasonably be expected of another child.

Clause 72 - Procedure for taking certain steps

132.     Clause 72 sets out the procedure for taking certain steps such as refusing an application for registration, imposing, varying, removing or refusing to remove conditions on registration and cancelling registration. Subsection (4) requires the Chief Inspector to give 14 days notice before taking such a step and the person must be given an opportunity to make an objection if he so wishes. However, the Chief Inspector may take such a step before the 14 days is up if the applicant indicates he will not be objecting.

133.     The taking of certain steps does not have effect until the time for appealing has expired or, if an appeal is brought, until the appeal is determined. There is an exception from this where the person affected has notified the Chief Inspector that he does not intend to appeal (see subsections (8) and (9)).

Clause 73 - Appeals

134.     Clause 73 sets out the procedure for appeals and replicates the existing position in the Children Act 1989. The clause allows the applicant or registered person to appeal to the Tribunal set up under the Protection of Children Act 1999 (and commonly known as the Care Standards Tribunal) against the taking of the steps specified in subsection (1). Subsection (2) also allows appeals to the Tribunal against any other determinations made by the Chief Inspector which are prescribed in regulations. Subsection (3) makes provision for appeals against orders under clause 71 (which deals with protection of children in an emergency).

135.     Subsection (4) requires the Tribunal to either confirm the step or determination or direct that it shall not have effect. In some circumstances, the Tribunal may also impose conditions or vary or remove conditions imposed on the registration.

Clause 74 - Disqualification from registration

136.     Clause 74 sets out the provisions for disqualification from registration. This is based on existing provisions in paragraph 4 of Schedule 9A of the Children Act 1989. This provides for the Secretary of State to make regulations setting out when a person may be disqualified from registration. Subsection (3) sets out particular circumstances in which the regulations may provide for a person to be disqualified. Subsection (4) allows regulations to provide for a person to be disqualified if he lives in the same household as someone who is disqualified or if he lives in a household in which any such person is employed. Subsection (5) makes provision for the regulations to allow the Chief Inspector to waive disqualification in certain circumstances.

Clause 75 - Consequences of disqualification

137.     Clause 75 sets out the consequences of disqualification. These are that a disqualified person may not provide any provision which is required to be registered (or only exempt from registration by virtue of being provided at certain schools). Subsection (3) provides that no one may employ a disqualified person in connection with provision that is required to be registered (or exempt school provision).

138.      Contravention of these prohibitions is an offence (see subsection (4)). However there are defences to the offence. Under subsection (5) a person who is disqualified by virtue of living in a household in which a disqualified person lives or works in does not commit an offence if he does not know and has no reasonable grounds for believing that a person who lives or works in his household is disqualified. A person who employs someone who is disqualified does not commit an offence if he does not know and has no reasonable grounds for believing that the employee was disqualified.

Clause 76 - Powers of entry

139.     Clause 76 gives a person authorised by the Chief Inspector powers of entry at a reasonable time on unregistered premises if he suspects that provision that should be registered is being provided on the premises in breach of the requirements of the Bill. It also gives a power of entry on the premises of any registered providers at any reasonable time. Subsection (7) provides that the person requesting entry under this power must show an authenticated document showing their authority to enter if requested. Under subsection (8) it is an offence intentionally to obstruct the Chief Inspector in carrying out his duties which may include such things as inspecting the premises and interviewing in private the person caring for the children. Subsection (9) specifies the penalty for the offence.

Clause 77 - Requirement for consent to entry

140.     There are circumstances in which a power of entry conferred by the Bill is exercisable on domestic premises. In particular, many children are looked after in the homes of their childminders. In other cases, children may be looked after in the home of a friend or relative of the childminder or in their own home. In such cases clause 77 generally requires the consent of an adult occupying the property to entry. However, this requirement does not apply to entry under clause 76(1) which covers rights of entry where the Chief Inspector has reasonable cause to believe that early or later years provision which is required to be registered is being carried out on the premises without being registered.

Clause 78 - Combined reports

141.     Clause 78 allows for the Chief Inspector to combine reports (if he considers it appropriate) in certain cases. For example, he may combine reports where he carries out two inspections of early years provision or inspections of compulsorily registered early years provision and compulsorily registered later years provision. This power may be useful where 2 childminders are operating on the same premises or where a childminder cares for both young children and older children.

Clause 79 - Information to be included in annual reports

142.     This clause requires the Chief Inspector to include an account of the exercise of his functions relating to early years and later years provision in his annual report to the Secretary of State under section 3(a) of the Education Act 2005.

Clause 80 - Supply of information to Chief Inspector

143.     This clause allows the Chief Inspector to require from a registered person information about their activities as an early years or later years provider.

Clause 81 - Supply of Information to HMRC and local authorities

144.     This clause requires the Chief Inspector to inform HMRC (Her Majesty's Revenue and Customs) and relevant local authorities when providers are added to or removed from any register and to give them information (to be prescribed in regulations) in order to enable them to fulfil certain functions relating, in the case of HMRC, to tax credits and, in the case of local authorities, to the information service which they are required to establish under clause 12 of the Bill.

Clause 82 - General power to make information available

145.     Clause 82 allows the Chief Inspector to make prescribed information about registered persons available (to such persons and in such manner as he feels appropriate) for the purpose of assisting parents in choosing a childcare provider or protecting children from harm and neglect.

Clause 83 - Offence of making false or misleading statement

146.     Clause 83 makes it an offence for any person applying for registration (whether compulsory or voluntary) to knowingly make a false or misleading statement in their application.

Clause 84 - Time limit for proceedings

147.     Clause 84 has the effect that where a person commits an offence proceedings may be brought up to six months after a prosecutor decides there is enough evidence. No proceedings may be brought in respect of an offence after three years has passed since the date of the alleged offence.

Clauses 85 and 86 - Offences by bodies corporate and unincorporated associations

148.     Clause 85 applies where an offence under the Bill is committed by a body corporate and makes provision for the liability of directors, managers or other officers of the company.

149.     Clause 86 clarifies how childcare providers who are unincorporated associations are to be treated for the purposes of proceedings for offences relating to registration. Proceedings must be brought against the organisation using its name rather than the name of individual members. In this and other matters relating to the proceedings, including liability for payment of any fine, the unincorporated association is to be treated as if it was a body corporate. Subsection (5) ensures that where an individual officer or member of the governing body of the association has consented or connived in the committing of an offence, or where an offence is attributable to that person's neglect, they may be held personally liable as well as the association.

Clause 87 - Fees

150.     Clause 87 allows the Secretary of State to prescribe in regulations the amounts of fees to be paid to the Chief Inspector and the timing of payment. Regulations may also make provision allowing fees payable to be waived or varied in accordance with the regulations.

Clause 88 - Co-operation between authorities

151.     Clause 88 sets out the requirements relating to co-operation by the local authority with the Chief Inspector and replicates the provisions in paragraph 8 of Schedule 9A of the Children Act 1989.

Clause 89 - Combined certificates of registration

152.     Clause 89 allows for the Chief Inspector (where he considers it appropriate and is required to issue more than one certificate to a person) to combine any two or more certificates into a single document.

Clause 90 - Notices

153.     Clause 90 provides for the methods by which the Chief Inspector may communicate certain notices to registered providers or applicants, for instance in respect of decisions to refuse registration, impose conditions or cancel registration. It also applies to certain notices which may be given by applicants and registered persons - for example when giving notice that they wish to be registered on another register or part of a register, wish to be removed from a register or do not intend to object to the taking of a step by the Chief Inspector under clause 72. Such notices may be given by delivery, sending by post, or by email. The Chief Inspector may only send notices by email where the applicant or registered person has indicated to the Chief Inspector his willingness to receive information electronically and he has provided an address (which must be used). Email notices to the Chief Inspector must be transmitted in accordance with the Chief Inspector's requirements.

Clause 91 - Power to amend Part 3: applications in respect of multiple premises

154.     Clause 91 enables the Secretary of State to make an order amending Part 3 to allow applications by persons other than childminders to be made in respect of more than one set of premises. The order may make consequential changes to Part 3.

Clause 92 - Certain institutions not to be regarded as schools

155.     Clause 92 amends section 4 of the Education Act 1996 to provide that institutions that only provide early years provision and are not maintained nursery schools are not be regarded as schools.

Clause 93 - Meaning of early years and later years provision etc.

156.     Clause 93 defines certain terms used in Part 3. Early years provision means the provision of childcare for a young child (a young child being a child aged from birth up to the 1^st September following his fifth birthday). Later years provision means the provision of childcare for a child older than this. An early years provider is someone who provides early years provision, and later years provider someone who provides later years provision. An early or later years childminder is someone who provides early or later years provision on domestic premises for reward with no more than two other people.

Clause 94 - Employees not regarded as providing childcare

157.     Clause 94 applies both to early years and later years providers and has the effect that where a provider employs an individual to care for a child the employee is not able to register. The registered person will be under an obligation to ensure that the child receives the appropriate early years or later years provision. The employer will also be under an obligation to ensure that they do not employ anyone who is disqualified in connection with early or later years provision.

Clause 95 - Interpretation

158.     Clause 95 defines terms used in Part 3 (regulation and provision of childcare) such as the use of 'the Chief Inspector' to mean Her Majesty's Chief Inspector of Schools in England.

Clause 96 - Minor and consequential amendments and repeals

159.     Clause 96 gives effect to Schedule 2 which makes minor and consequential amendments to a number of enactments, in particular, the Children Act 1989 (c.41), the Education Act 1996 and the School Standards and Framework Act 1998 (c.31).

160.     The amendments to Part 10A of the Children Act 1989 confine its application to Wales as it is superseded for England by Part 3 of the Bill (see paragraphs 2 to 14 of Schedule 2).

161.     A number of the amendments in Schedule 2 are consequential on the replacement (for England) of section 118 of the School Standards and Framework Act 1998 by the new duty in clause 7 to secure prescribed early years provision free of charge (see paragraphs 16 to 20 and 26).

162.     The amendment at paragraph 23 to the School Standards and Framework Act 1998 (c.31) removes local authorities' duties to assess the sufficiency of childcare and to establish an information service for the public relating to the provision of childcare and related services, as these have been superseded by Parts 1 and 2 of the Bill.

163.      The clause also provides for the enactments specified in Schedule 3 to be repealed to the extent specified.

Clauses 97 and 98 - Subordinate legislation

164.     Clauses 97 and 98 make general provisions in relation to subordinate legislation. Clause 98 provides that orders relating to assessment arrangements (but not conferring functions on people) and orders relating to commencement are not subject to parliamentary procedure. An order under clause 5 (amending the definition of early childhood services) or clause 91 (allowing for registration in respect of multiple premises) is subject to the affirmative procedure. All other subordinate legislation is subject to the negative procedure.

Clause 99 - General interpretation

165.     Clause 100 is a general interpretation clause.

Clauses 102 and 103 - commencement

166.     Clauses 102 and 103 deal with commencement. Most provisions of the Bill will come into force in accordance with orders made by the Secretary of State. Part 2 comes into force in accordance with provision made by the National Assembly for Wales. In relation to Wales, certain of the amendments made by Schedule 2 and the repeals made by Schedule 3 come into force in accordance with provision made by the Assembly.

PUBLIC SECTOR FINANCIAL COST

Duties on Local Authorities

167.     The proposed duties on local authorities in England will be financed within the resources which have already been made available to them for childcare and early childhood services and future funding levels which will be determined through the normal spending review mechanisms.

168.     In England the vast majority of Sure Start funding will be routed through local authorities by 2008 and funding is already in place to deliver these services through the General Sure Start Grant (GSSG). The Department for Education and Skills' funding of childcare and early childhood services is significantly expanding. Between 2004/05 and 2007/08 expenditure in this area in total will increase from £958m to £1.7bn, a 55% increase. This funding has also, to a large degree, been, liberalised. For example, the number of ring-fenced budget lines within the GSSG in 2004-5 will be reduced for 2006-8.

169.     The proposed duties on local authorities in Wales will be financed within the resources which have already been made available to them for childcare and information services and future funding levels which will be determined through the normal spending review mechanisms.

170.     In Wales, the funding for childcare and relevant information services has been provided to local authorities through the grant scheme Cymorth - the Children and Youth Support Fund. The funds available through Cymorth to local authorities will increase from £43.3 million in 2005-6 to £54.7 million in 2006-7. From 2006-7, there is a requirement placed on local authorities that no less than 8.5% of their share of Cymorth funding is spent on childcare and relevant information services.

Regulation and Inspection of Early Years and Childcare

171.     The existing costs to Government of regulating and inspecting childcare and nursery education total approximately £88m per annum. These are administrative costs. Costs are likely to increase due to market growth. Separately providers pay a fee on application to Ofsted and annually thereafter to maintain their registration. These fees are currently heavily subsidised by Government. It is the intention to gradually bring provider fees more in line with the total costs incurred.

172.     All provision from birth to the end of the Foundation Stage will be required to deliver the Early Years Foundation Stage. Schools, where other arrangements exist, will only be required to register provision with Ofsted for children under 3. Providers from the private and voluntary sector will be required to register all provision. The content of the Early Years Foundation Stage will be consulted on during 2006 but it is intended that it will bring together elements of the existing National Standards for childcare, the Foundation Stage and Birth to Three Matters. This will eliminate duplication and by focusing on outcomes reduce regulatory requirements.

173.     The framework will include elements of the existing funded nursery inspections based on self assessment (following the model of the school inspection framework). Costs cover initial registration with Ofsted, inspection within a three year cycle and any complaints, follow up or enforcement action that is required. Savings to Government from the streamlined and simplified framework will range between £15m and £21m (10% and 20% of total cost of early years regulation and inspection). An exact cost will not be determined until the content of the Early Years Foundation Stage is agreed but Ofsted will review its costs at this stage and see if further savings are possible.

174.     Proposals for school age provision are based on the development of a new Ofsted Childcare Register which will be compulsory for providers caring for children up to the age of 8 and voluntary for providers caring for children age 8 and over. Wherever possible care provided by a schools governing body will be covered by the school inspection system. It is the intention that the Ofsted Childcare Register should be as near to full cost recovery as possible. A full cost recovery approach should give rise to no further costs to Government. Current costs suggest the annual fee will be around £180. However it will be important to ensure the sustainability and diversity of the market so some subsidy may still be required in the short term. It is likely that costs will be differentiated between group providers and childminders in reflection of the differing budgets they will have at their disposal.

EFFECTS OF THE BILL ON PUBLIC SERVICE MANPOWER

175.     The Bill will have comparatively little effect of public service manpower. Provisions on local authority duties will bring together activities that local authorities already undertake and the Bill will not prescribe how local authorities carry out these duties.

176.     The reforms to the regulatory and inspection regime will achieve efficiencies as outlined above. The detail of these are subject to further consultation on the Early Years Foundation Stage and Ofsted Childcare Register. We forecast there will be an overall reduction in workload.

SUMMARY OF REGULATORY IMPACT ASSESSMENT

177.     A regulatory impact assessment (RIA) has been produced to accompany the Bill and is available on www.dfes.gov.uk/ria.

178.     The proposed duties on local authorities will mainly affect the public sector. Proposals will be funded from within existing allocations but will allow for better and more flexible targeting of early years funding by local authorities. The existing strategic role that local authorities already play in relation to early childhood services and childcare will be formalised and placed on a long-term footing. The effects of this on the private and voluntary sector will be minimal, although providers in areas of low provision may receive additional support.

179.     Proposals to reform the regulation and inspection of childcare will impact across all childcare settings in the public as well as private and voluntary sectors. Overall the Bill simplifies existing registration systems and will reduce bureaucracy for childcare providers. Financial efficiencies will also be made in central government with savings to Ofsted anticipated of 10-20% under the reformed regime.

COMMENCEMENT DATES

180.     The commencement clause provides for some provisions to come into force on Royal Assent, and the remainder to be commenced by order by the Secretary of State or the National Assembly for Wales.