Examination of Witnesses (Questions 104-138)
RT HON
DAWN PRIMAROLO
MP AND ANN
GROSS
9 DECEMBER 2009
Chairman: I welcome the Minister of State
for Children, Young People and Families, Dawn Primarolo, and Ann
Gross, who is the Director of Early Years, Extended Schools and
Special Needs Group at the Department for Children, Schools and
Families. Dawn, this is your first meeting with the Committee,
isn't it?
Dawn Primarolo: It is indeed,
and much I am looking forward to it.
Q104 Chairman: And we have
been looking forward to meeting you. You know what this session
is about. We have been looking at the single funding formula for
early years. We have taken some very interesting evidence so far,
but we always give Ministers when they come in front of the Committee
the chance to make an opening statement, so over to you.
Dawn Primarolo: Thank you very
much, Barry. I want to say how much I welcome your inquiry into
the single funding formula. It is important that we get it right.
I wish to make a couple of points in opening this session. First,
I know that you would expect the Government to be strongly of
the view that our role is to ensure that all children, irrespective
of the type of settings they attend, get high-quality, free early
years entitlement from the age of three. I want to make it absolutely
clear that there is no reduction in Government funding for the
free offer. In fact, more funding is being made available for
the free entitlement as it increases from 12 and a half hours
to 15. Since 1997, the Government have invested a huge amount
in the early years—£25 billion in total—and,
on an annual spend this year, there is something like £4
billion a year by local authorities topped up by another billion,
which is within Sure Start, and ring-fenced on quality and capital
spend. I have looked carefully at the evidence that you have already
taken and, of course, representations and views were being expressed
to the Department from the early autumn period. I want to say
at the beginning that I am minded to postpone under certain circumstances,
with certain conditions, the implementation of the single formula.
I am delaying it from implementation in April 2010 to 2011.There
are conditions that I would need satisfied. We would have to make
sure that we were learning from what is still coming back from
our pilots and what local authorities are saying to us. I would
want to be sure that we were proceeding on a very firm footing.
I do not want to abuse my opening remarks to the Committee, Barry,
but I would be more than happy to outline quickly—if you
thought it was helpful at this stage—why I am considering
that view. Obviously, I need to go through certain steps in notifying
Parliament, but I would be grateful if you could give me through
the course of the evidence this morning your initial reaction
to some of the proposals that I should like to put forward.
Chairman: Thank you for that, Minister.
Let us get into questions. I think that a lot of things may emerge
from that process.
Q105 Mr Stuart: I would be
very happy, Minister, for you to take us through that. Obviously,
with any change like this, you are listening to those local authorities
which have responded strongly. You will either be seen as chaotic
and failing in delivering through on your intent, or as listening
and sensitive to the complexities of the results. Perhaps you
could tell us a little more about your thinking.
Dawn Primarolo: Thank you for
giving me the opportunity to do that, Graham. An intention to
introduce the single local early years funding formula was announced
in 2007. The purpose was to bring transparency and accountability
to the system, and to ensure in particular that the focus of the
funding was clear on the principles of targeting deprivation,
and improving quality and flexibility for providers. That received
support on both sides of the House—there was no dissent.
We all recognise, however, that 2007 was a different time economically.
A lot has happened since then and local authorities have been
very busy on a range of issues. I must acknowledge that the recession
has brought a number of other challenges to local authorities
on issues that they would also have been busy with. It was always
intended that the implementation would take place in 2010. Over
the late summer and early autumn, we began to receive feedback
that some local authorities were struggling with the development
of their formula, and that providers and parents were becoming
increasingly concerned about the impact that would have on them.
That noise—that challenge—has continued. I will explain
what we are trying to do. We have a historical system of funding
from pre-'97 in relation to the maintained nurseries, which are
very patchwork and are not across all local authorities. As a
Government, we have placed the increase of free entitlement to
15 hours into that. It is a complex terrain for early years with
all of the providers. Flexibility is fantastic for parents, but
it brings with it complexities. We recognise that. Bringing those
two alongside each other and trying to make sense of the principles
is obviously complicated. We were receiving views from local authorities,
providers and parents who did not all agree and who all gave us
a different reality, so I asked my officials to get permission
for us to undertake an additional data collection from local authorities.
We collected that information—on the development of the
formulas and how ready local authorities thought they were—during
November. We added risk assessments to that about what the challenges
were. Unfortunately, despite the very hard work of local authorities
and the PVI sector, we found huge variability of approach and
practice. When we added to that the regional and national feedback
that we received, it was clear that there was quite a high risk
in the area of not being ready by April 2010. In other words,
perhaps only around a third of all local authorities may be in
a secure enough position to proceed. Barry, I would be happy to
prepare a paper summarising that information for the Committee.[6]
Unfortunately, I wasn't able to get it ready for today, but you
will understand that I am going through this as rapidly as I can
alongside the work that you are doing. I think that we all agree
on trying to move towards a single formula and on the basic principles,
and we all recognise that it is complex and that we need to get
it right. I am minded—I need to formally notify Parliament
about this and will do so in a written statement—to say
to local authorities that first, we are going to delay implementation
to 2011. But there are some local authorities that are telling
us they are clearly ready to go, and we would invite local authorities
to apply to join pathfinders for us. We would add that to the
pilots we already have and that we are monitoring. We will obviously
look very carefully at the deliberations of this Committee and
its recommendations, and at what we already know about some of
the key issues. We will seek in the intervening period—the
delay of a year—to get ourselves to a sensible position,
working with local authorities and the PVI sector to have an implementation
for everyone that will work. We will then bring the final local
authorities into the single formula. What I need to consider is
how we will give that support, in particular how we can use the
pathfinders as good practice and spread the how-to-do message
among the other local authorities. I am not blaming local authorities
or the PVI sector here, but am saying that this is a big challenge
and that we have to get it right. That is my thinking, Graham,
on how we would proceed.
Q106 Mr Stuart: On the subject
of pathfinders, the thinking is developing and you are consulting
and so on. You said that a third of local authorities are on for
the original timetable. Do you imagine that anything like a third
will be involved in pathfinding?
Dawn Primarolo: We would need
to invite them to put themselves forward. Even among that third,
it is very difficult for us to tell exactly what is going on.
The way that funding decisions are taken in the early years is
quite rightly a decision for local authorities with local accountability,
outside the free entitlement. I think that all of us would acknowledge
that in undertaking this exercise a great deal has been revealed
that perhaps was not obvious or transparent.
Q107 Mr Stuart: May I press
you. Do you think it will be a large number? There was a tiny
number of pilots.
Dawn Primarolo: Yes, nine.
Mr Stuart: Are we talking about a similarly
tiny number of pathfinders, or are we talking on a much bigger
scale? Just give us some sense of that.
Dawn Primarolo: No, if local authorities
want to be pathfinders and apply, I want to make sure that those
that are in the pilot give us a spread of all the different circumstances,
to see the difference between rural provision and central city
conurbations, for example. I do not have a view about the maximum
number that will be in the pathfinders. If you have a view and
think a certain number is manageable, I will of course listen
to what you say. Of course, I need to have discussions with others,
such as the LGA and local authorities themselves, about what is
sensible. We need a large enough number as a minimum—if
that is not a contradiction—so that we can learn and progress
this from the good practice that is going on.
Q108 Mr Stuart: In one submission
to us, Jean Ensing of Bognor Regis nursery school—a splendid
institution I am sure—described the combination of policy
initiatives such as the single funding formula, the extension
of entitlement to 15 hours and the extension of the scheme to
two-year-olds as "like being in a box and all the sides are
coming in". I suppose people who feel like that will welcome
today's idea of delay. Can you talk us through how you see these
different pieces coming together so that the various players can
get some idea of how they will be able to get through this?
Dawn Primarolo: The Bognor Regis
example is interesting. You clearly took representation from the
nursery itself, yet the local authority disputes the number of
places there and how high its vacancy rates are. I do not want
to adjudicate between the setting and the local authority, as
I am sure you do not. What I would say to begin with is that the
introduction of the formula alongside the increase to 15 hours
and the introduction of flexibility and consultation on it, was,
I have to admit, always going to be challenging.
Q109 Mr Stuart: Will it be
easier now?
Dawn Primarolo: I think that what
we have learned about is the complexities around having that,
and that will certainly be one of the issues we will have to address.
I am not trying to be unhelpful, Graham, in fact I am trying to
be helpful to the Committee in responding to the situation that
has emerged, without having a complete answer on every point.
All of the feedback that we are getting, as I have already said,
is that the idea of having a single formula is the right thing,
and the basic principles are the right thing. Some local authorities
have absolutely managed it, and are ready to go and can be seen
as areas of good practice. Others are struggling. We need to get
it right. Let's home in—whether it's our guidance, whether
it's coping with the information, whether the consultation has
been thorough enough, or whatever the circumstances—and
make sure that in those 12 months we are in a better position.
Q110 Mr Stuart: In your opening
remarks you mentioned economic circumstances more than once. You
are suggesting that you are minded towards a delay in the single
funding formula. Are the Government still set on their commitment
to the 15 hours and the extension to two-year-olds—universal
two-year-old provision?
Dawn Primarolo: Absolutely.
Q111 Mr Stuart: Why did you
mention economic circumstances so repeatedly? It wasn't obvious
why. You're telling us that you're delaying the formula because
of organisational issues and different people coming back to you,
and yet you repeatedly mentioned economic circumstances. Can you
just tell us what is lurking beneath that concern?
Dawn Primarolo: Yes, of course.
I am sorry, Graham, I didn't mean to mislead the Committee at
all. I was trying to be friendly to local authorities, in recognising
that over the past 12 to 18 months they have had significant challenges
in their localities as a result of the economic circumstances,
whether it be recession planning or whatever. It is nothing at
all to do with the guaranteed funding that is available through
the dedicated schools grant. That has gone up something like 75%
in real terms since 1997, and in the 2008-11 period it will rise
by an average of 13.1% per pupil. There is no question of money
from central Government being a challenge. My comments were really
that I want to be fair and reflect that all the local authorities
have worked very hard on this, and for a whole set of reasons
some are ready and some are not. They have had lots of other demands
on them outside of this and, because I consider it so important
that we get this right, I am trying to hold everybody together—the
PVI sector, local authorities and the Government's objectives.
We all claim we are heading the same way. That is why I was giving
a nod of respect in the direction of local authorities and their
hard work. I wasn't implying anything else.
Q112 Annette Brooke: Far be
it from me to suggest that we should have more central direction,
but having looked at some of the consultations, it became apparent
to me that some of them went out with different options, which
is not always the case. I am always very wary of consultations
that don't have just a single option, because you think it's all
stitched up. You said that you wanted to make sure that the consultation
processes have been sound. Is this anything that you have actually
received representations about, and is it something you would
give some consideration to?
Dawn Primarolo: In terms of how
the consultation was conducted? I think, Annette, that the challenge
for me as a Minister for central Government is to be there to
offer help and help spread best practice, but it is not my role
in these circumstances to instruct local authorities how to respond
to the very different needs that each of them faces. At the present
time, I am trying to work through the really critical points—the
important points—in supporting them through preparation
of the single formula. What really is noise in the system—where
people are just generally unhappy—is that any change produces
people who are unhappy. We try in the guidance to give a balance
between what we thought were the statutory obligations—the
must-dos—and trying to build in the principles around the
flexibility of local need. We would want to see how the good authorities
have managed to deal with it, how we can spread that to other
authorities, and whether we as a Department need to do any more.
It is a very difficult line for me to walk, given my passion to
protect high quality early years and bring all the other early
years to that very high quality.
Q113 Annette Brooke: I think
you have led into my next question. I am very anxious that, if
you do move along the route you have suggested, the good practice
should be disseminated widely. That was going to be my follow-up
question, which I think you probably answered. It is important
that everyone can learn from where it has worked well.
Dawn Primarolo: I agree and that
is why I thought of using "if I am minded to do this".
I have to keep saying that, because my obligation is to notify
Parliament formally as well. I hope you will excuse my using that
particular phrase.
Chairman: We understand that you are
only "minded".
Dawn Primarolo: Thank you. So
I don't need to say it any more. What I felt that the pathfinders
would be able to give us is exactly that vehicle. We need to look
at how we would support the spreading of the good practice, and
learning more as the pathfinders proceed, as well as the pilots
we already have, about the crunchy and difficult issues, and then
whether we might need to give more help and support on that basis.
But I think we are trying to facilitate local authorities, again
on the basis that they are all in different positions, and the
early years provision is very complicated. As we step into that,
we need to make sure that we don't put any of it at risk. That
is not our intention, hence the very clear guidance I gave on
maintained state nursery schools.
Q114 Mr Pelling: I think,
Chair, that the points that the Minister has made show the very
high quality, emollient approach that she takes towards her task.
Can I put it to her, nevertheless, that the reference to the economic
circumstances will perhaps reflect some of the problems in terms
of introducing the formula? We heard from witnesses to the Committee
that they felt it was typical for local authorities to introduce
the single funding formula without increasing part of the dedicated
schools grant allocated to early years—taking it away from
primary and secondary. Is the Minister saying that the pace has
rightly slowed because in difficult economic circumstances it
is difficult for local authorities to be able to meet the implication
of the formula? Obviously, you are under some pressure, I guess,
in terms of what the experience has been, and how there may be
difficulties—perhaps closing individual, dedicated nursery
schools.
Dawn Primarolo: I do not accept
the issues with regard to the finance that the Government provide
for the free entitlement. My point about the historic position
pre-'97 was that only about £1 billion was being spent in
this sector by local authorities, and their provision was decided
locally. So the main finance that went in came either from parents
themselves paying for private facilities, or from those local
authorities that took the decision locally to put more money in
because that is what their local communities expected, and they
funded nursery schools, for example. So the issue of the single
formula is not whether there is enough money available for the
guarantee. It seems to me that local authorities might be asking
a different question that is nothing to do with the single formula,
but about how much they think they should pay over and above what
is the guaranteed funding from central Government. That is a perfectly
reasonable view for a local authority to take and to be accountable
for. I would have very strong views about saying, "Well,
local authorities should step up to the plate, just as central
Government is, and make their contribution". But that isn't
a matter for the single formula; that is a matter for the decisions
that are taken locally about how they spend the money. I now regret
having tried to acknowledge the local authorities' position in
some respects, because what I was saying was that this process
is a complicated process and there were other complicated processes
going on, as local authorities tried to respond with their services
to a changing environment for their council tax payers and residents.
I was trying to say, very gently, that perhaps the local authorities
had not been able to give as much attention to this area as they
might have wished to, because of other demands on their analytical
time. That is all I was saying.
Q115 Mr Pelling: We had a
witness from Southampton city council, which I think is one of
the pilot programme authorities, and I think the witness was trying
to say that they were very happy with the proposals and saw the
positive nature of what was being done, but they wanted to protect
maintained nursery schools. There is an automatic effect—isn't
there?—of the formula, in terms of compromising that more
expensive provision. Therefore, it is inevitable that local authorities
who may take a very great pride in those nursery schools wanted
to protect them. So they ended up being faced with the prospect
of transferring from other parts of the Dedicated Schools Grant,
and it is difficult to do that in these difficult economic times
when there are other pressures and demands on local authorities.
Is that a motivation for delay?
Dawn Primarolo: I still think
that is an entirely different point, because the funding for the
free entitlement from 12 and a half rising to 15 is absolutely
guaranteed in the money that moves from central to local government.
Decisions are rightly a matter for accountability on whatever
a local authority spends its money on. What the single formula
around the principles was designed to achieve is to make that
transparent, but there can be no question that they do not have
enough money to pay for the free entitlement. The single funding
formula was about transparency and accountability around certain
principles, so that it could be seen why a local authority was
taking the decisions that it was taking. If it chose to maintain
a particular provision over and above the free entitlement, that
is absolutely up to the local authority, as long as it's accountable.
Q116 Chairman: One of the
most reasonable people who has appeared in front of this Committee
for a very long time is Lesley Adams from Birmingham, who is the
head of integrated children's services there. She is just worried
that, however complicated or simple the formula is, what will
end up happening in Birmingham is an undermining of the high-quality
provision that Birmingham has invested in over 50 or 60 years,
which is a type of gold standard of good pre-school nursery provision.
Yes, it is in the maintained sector, which often has more expensive
buildings, floor space and all that. I think she represents quite
a lot of people who we in the Committee have contacted. The end
result might be an undermining of not just the gold standard,
because it is old or historical, but the maintenance of high standards
and the permeating of those standards to the rest of the sector.
This is what she is genuinely worried about.
Dawn Primarolo: Absolutely. I
can understand that concern. I think it is a very important point
to make about the high quality of our maintained nursery schools
and how they can work with the rest of the sector in terms of
excellence and quality. As this began to emerge as one of the
concerns, I made it clear when I wrote to all the directors of
children's services. I reminded them that the formula does not
prescribe one type of provision over another—it is a mechanism
for showing how the money is spent—and made absolutely clear
the importance of the maintained nursery sector. The presumption
against closure is within the guidance. I have circulated copies
of this to the Committee.[7]
I pointed out that where an unjustified reduction is being made,
meaning that that was not because there was a huge number of vacant
places and no attempt had been made to close them, I would take
it seriously and consider what I could do in those circumstances,
so I have made the position absolutely clear. In acknowledging
the concerns of representatives from Birmingham, for instance—although
not only there—that would be awful, and it is not the objective
of the formula to undermine the excellence in centres. It is actually
to make sure that we understand how that happens, and we are moving
everything else to be as good.
Q117 Chairman: There are unintended
consequences that you certainly don't want, but we all know that
that is one of the frailties of public policy making. You can
start off with a very well intended policy, but you could end
up producing something you really didn't want. To give another
example, evidence given to the Committee suggests that the new
funding formula treats pre-schools more like schools, so the bums
have to be on the seats on a regular basis at the beginning of
term. However, nurseries are not like that, and we must consider
the situation if they do not have spare capacity for children
who are ready for nursery at a different stage. Children aren't
all ready to go to nursery in September—they are ready month
by month, as you know from your own experience, and I know from
mine. Isn't this sort of making little school systems out of a
system that shouldn't be school-based?
Dawn Primarolo: The first point that
you make is very important, which is why I am trying to consider
the options, and looking at whether there might be unintended
consequences in the implementation of what appears to be a good
idea that has everyone's support. Given all the information that
is coming in, my approach is to say that while everyone is still
saying that we should have a single formula and that the principles
outlined in the formula are correct, the difficulty is in the
implementation, given the complexity of the area, and further
work is needed. Let us take the vacant places. I think it is a
straight proposition, and we would all agree that we would not
want to see a facility funded that was only half full. I am using
this as an extreme example; I am not saying that I can think one
like it. Let's say that no effort was being made to do outreach
and fill the places. Under those circumstances, would we want
the money spent in that way? No. But, would we say that there
would never be a vacancy rate for the reasons that you've described?
Of course we wouldn't. If we looked at rural areas, it would be
even more complicated in terms of what vacancy rate would be counted
as being in excess of being reasonable. The basic principle that
people accept is that obviously participation is important, but
it was not meant to be an absolute. That is part of the discussion.
Some authorities have settled that and worked their way through
it—apparently to a conclusion that is acceptable—and
others are still struggling. Those are precisely the issues that
we need to flush out. The other example would be that there are
different settings, even within a local authority, and the formula
would give a different reaction to those different settings. That
is right.
Q118 Chairman: You have got
a sophisticated and articulate group spouting opinions out there,
as you know. We have found during all these inquiries that there
are so many diverse, very good people out there that you are not
going to be short of opinions and good information on this.
Dawn Primarolo: As you know,
we are never short of opinions and, most of the time, we are never
short of very good evidence and expert advice. As a precautionary
principle, what I am basically saying is that this is really complicated,
everybody has signed up to it, and it is proving more difficult
to implement than anybody appreciated. Some have managed it; some
have not. Let us look at a slower speed, if that is possible,
to get us to the same point.
Q119 Chairman: Minister, we
are all in favour of that, but let me give you an example that
is rather different. Everyone is in favour of flexibility. A parent
could use their entitlement in a way that suited them, which sounds
to me like a marvellous way of providing pre-school opportunities.
The Government's record is excellent on this—I am not going
to deny that. I heard Professor Kathy Sylva say to a seminar only
yesterday, however, that one of the unintended consequences is
that some parents use almost all the entitlement in one day—10
hours in a day—or they use it in a way that is very upsetting
for a child and does very little for that child's pre-school education.
It is very wrong, according to Professor Sylva and others, to
put a child in a nursery setting one day a week, or one morning
and one afternoon. If you want to give the real benefits of pre-school
education, there should be a rhythm and a system to it—the
best would be for the child to go every morning for five mornings.
So, flexibility might have the unintended consequence of actually
being quite damaging to a child, rather than helpful.
Dawn Primarolo: Yes, that is a
potential, if it is not mediated by other principles. I am just
responding to a question that was put to me that I was not expecting.
Chairman: That is what these sessions
are about.
Dawn Primarolo: Yes, but it is
rather dangerous for Ministers to think aloud—you know that,
Barry. The question is quality and our objectives. Of course,
we are looking at the quality of the provision for the child.
That is our main objective so, of course, we are considering flexibility
and what fits with the family and the parents' relationship. But
it seems to me that what you are flagging up here—as you
are saying Kathy is—is that we need to look very carefully
at the quality mechanism within the formula and how that cuts
across with flexibility. That simply reinforces my view that it
is very complex. Somebody said that I should have a T-shirt that
says "It's very complex", and that I should just sit
here saying that it is very complex. In a way, I feel like I am
saying that all the time, but it is complex, and there are lots
of demands and aspirations. We have to balance all those in making
sure that the provision is high quality. It is about the outcome
for the child as well, and ensuring that it fits with families.
That is why we are now consulting on the extent and what we mean
by flexibility, and what would be suitable in bringing those balances
together.
Q120 Chairman: But I could
have a T-shirt that says "It's very simple really",
because if you talk to Professor Sylva, she would say that actually
the rules in pre-school are the same as in any other bit of education.
What is important is the quality of the trained professionals
who are engaged. She would say that if that mother or father takes
a child and asks for inappropriate timings for that child, it
is very different if the person who responds and says, "Actually,
this isn't very good for your child," is well trained and
has a fair degree of education and knowledge of pre-school and
how children develop. Things are very different, as Kathy Sylva
said yesterday, if the person the parents are talking to in a
PVI—I shall say a PVI, just to be controversial—was
turned down for a hairdressing apprenticeship and this was the
next job she could get. Now, that is to quote Professor Sylva
from Oxford University. You said it is about quality, but that
is not complex. All the time that I have been Chair of this Committee,
we have found time and again that with pre-school—and there
is a reason we have supported the early years foundation stage—it
should be about not child minding, but high-class early years
stimulation by professionals. That is what this Committee has
always been after.
Dawn Primarolo: Absolutely. I
agree with that. It is not that we ignore the other issues that
are associated with the family, such as work, which is important
because of the implications for a family of being in poverty.
I absolutely agree on the question of quality and proper advice.
When there are demands around flexibility, which there are, it
is right for us to explore through consultation how that might
be checked, in terms of the central goal, which is what is best
for the child in these circumstances. We do that in other areas
of policy. If we look at what our children centres do, particularly
those that have lots of other services connected to them, whether
advice on parenting, the health visitor running the mother and
baby course—
Chairman: We will be seeing your child
centres shortly, Minister.
Dawn Primarolo: And you will have
a lovely time—because I always do.
Chairman: I am hogging the questions.
Helen.
Q121 Helen Southworth: In
the guidance attached to your letter of 28 October, you suggest
that where it makes sense to look at structural solutions, that
should be given consideration. Is it your intention actively to
encourage the federation of maintained nursery schools and what
effect do you think that would have?
Dawn Primarolo: I am certainly
exploring how we can develop the role of maintained nursery schools
with regard to our children centres and child care facilities,
whether that be supporting child care networks or training staff.
I think you had evidence from one of our children centres, which
I have visited recently, in Corby—Pen Green. I always want
to call it Pen Park, because there is a children centre near that
road, near my constituency. At Pen Green you can see the integration
and the benefits of using as the hub the maintained nursery school.
What I want to explore—we have some work in the Department
at the moment—is whether it has further reach out into other
centres, because in that particular example and many others, the
maintained nursery is physically in the children centre. We need
to consider that actively—as a new Minister I say that,
because I have been in my brief relatively recently—for
exactly the reasons that Barry was touching on about practice,
quality, support and finding ways to use the very important, high-class
expertise that we have in our children centres as we develop them
in our maintained nurseries throughout the sector. We have a capacity
issue with regard to the very highest qualified and skilled—we
know that and are developing new skills now. But I see the role
of the maintained nurseries as crucial in that. Clusters work
well in other circumstances. Some are already clustered—we
may be able to build on that.
Q122 Helen Southworth: We
all understand that it is essential for children's welfare that
we get continuity of support from early years through into primary
education. We have received significant evidence that demonstrates
concerns about the impact of the new formula on the provision
of services for children in primary schools. Quite a number of
people have expressed concern about the impact of the funding
formula on the Dedicated Schools Grant and the possible impact
on primary schools. How are you going to make sure during your
considerations that that is not going to have a negative impact?
Dawn Primarolo: I have to be honest,
Helen, and say that I do not fully understand why they believe
it would, given how we allocate our dedicated schools budget and
grant and the decisions that are taken locally. Given that we
are moving into a period where we can take up all these criticisms
following a postponement of a year, I would want to be reassured
that there was not detriment. There is nothing that should disturb
the free entitlement to early years which the Government are paying
for. I would be happy to reflect a bit more on your point. If
it would help, I could perhaps do a very quick note and have it
to you by Monday.[8]
I have seen the criticism, but we need to dig down to find out
what is really driving it and whether it is other things.
Q123 Helen Southworth: We
have had some really good evidence—and I think we are probably
all aware of it from our constituencies, too—about the significant
effect that early intervention can have on vulnerable children.
Some concerns have been expressed that places need to be available
throughout the year for sudden impact issues—bereavement,
a parent with mental health problems, a parent going to prison
or social isolation—which mean that some intervention needs
to happen quickly. How are you going to ensure that every authority
area has access to those sort of places? Will you have a focus
on those during this consideration?
Dawn Primarolo: This was one of
the issues that came out of our consultation as well. You are
rightly reflecting back to me the breadth, differences and complexity
of access to early years. Forgive me, but given that local authorities
are managing that and providing that, I do not necessarily think
it is unreasonable for us to have thought that they would take
those points on board. They are clearly important in the way that
you have identified. It has not necessarily always happened. It
comes back to this vacancy: place versus participation as if they
are absolutes in terms of the smooth running of facilities. I
suppose it is a different form of flexibility. It is still flexibility
around the needs of the parent as well. But that is one of the
issues that we need to look at very closely. We do not want to
squeeze the capacity out of the system which enables it to respond
to those very important differences. We see that working really
well in lots of settings, particularly children's centres for
obvious reasons.
Chairman: We have a rule in here that
we never let someone sit in front of the Committee and never say
a word. I see that Ann Gross has just had a note passed to her.
Perhaps you would like to come in on this, Ann, just to get your
name on the record. We know how much expertise you have in this.
Ann Gross: Thank
you. As the Minister said, the issue of how we make sure that
we have places for children with a range of additional needs was
one of the things that came up when we were consulting on the
draft regulations for the single funding formula. Local authorities'
practice on this varies considerably. Some have a very strong
record; others have found it more difficult for a variety of reasons.
It is, absolutely, one of the issues that we will want local authorities
to focus on, and we will work with the pathfinders over the next
year so that we can disseminate effective ways of making sure
that you can protect some places for children in need.
Q124 Helen Southworth: So
you will be looking closely at making sure that there are not
perverse incentives, so that authorities that are not providing
that sort of flexibility do not benefit, but authorities that
are providing that sort of flexibility get recognition of that?
Ann Gross: It is always about
striking a balance, isn't it. We have got to take into account
a number of factors, but one of the issues we will want to look
at is how effective local authorities are in making sure that
there is proper provision for children in need.
Q125 Helen Southworth: In
fact, using the opportunity as a driver to ensure every authority
does have that as a performance standard.
Ann Gross: Yes.
Dawn Primarolo: And using the
good practice. There is some very good practice out there, so
if one local authority can do it the clear question is why can't
all do it?
Q126 Chairman: We continually
ask that question. There are only 150 local authorities. Why can't
they all be wonderful?
Dawn Primarolo: They all tell
me that they aspire to be wonderful when I see them on safeguarding.
Chairman: They become less confident
when you ask them about child protection, but that is another
matter. David.
Q127 Mr Chaytor: Minister,
at the end of the day, when the dust settles on all of this, who
are going to be the winners and losers?
Dawn Primarolo: I do not understand
why there should be any losers. The formula is not a prescription
for what must be done, it is a tool to aid and reveal—for
reasons of accountability—the decisions that have been taken
locally about the provision. The formula is about driving quality
and availability of places, and the transparency underpins that.
I am at a bit of a loss to think why—on that drive for quality,
transparency and the sensitivities we talked about in the formula,
if they are used in a sensitive fashion—they would produce
anything but us all continuing to drive quality and access locally
and nationally.
Q128 Mr Chaytor: So if there
are no losers, is it simply a question of the scale of increased
funding that all providers will achieve out of that?
Dawn Primarolo: Can you repeat
that question, please?
Mr Chaytor: You are saying that there
are no losers. Is that the case? That is what you are saying,
isn't it?
Dawn Primarolo: I am saying that
I do not see why there should be any losers from the introduction
of the formula because, even with the formula, local authorities
will decide and be accountable for the decisions they take about
how they fund each of the settings that provides their early years
provision. There is always, in that sense, a priority.
Q129 Mr Chaytor: So the answer
to the question is that there are no losers, on condition that
local authorities compensate for any possible losses that an individual
provider may have. You are assuming that the local authority would
have to step in if, when its formula was finally agreed, there
happened to be—
Dawn Primarolo: No, I'm assuming
that the local authority will justify what it is doing publicly
to its electorate and those to whom it is accountable. I do not
make any assumptions beyond that about how local authorities,
for the reasons that Annette gave, choose to direct their funding.
I can absolutely try to—will—protect the free entitlement
because there is no reason why that should be interfered with.
The money is there. Over and above that, that is a discussion
every year for a local authority—how it decides to use its
resources—and the formula is about making some of those
decisions a little clearer, while driving quality. I think that
people are trying to attribute to the formula more than it is
seeking to do. It is not seeking to direct local authorities;
they simply have to explain why they do what they do, which they
do all the time.
Q130 Mr Chaytor: Of the original
motivations for introducing the new formula, which is the most
important?
Dawn Primarolo: Quality, that
the transparency and the principles around, for instance, deprivation
and provision drive that quality, and access. On the point that
I started with, it is about the entitlement to early years and
particularly to the provisions that we are expanding with regard
to the free entitlement. So, quality, but transparency supports
that quality.
Q131 Mr Chaytor: In terms
of the typical improvement in funding that will come about to
drive quality, what would be your ballpark figure? What is your
assumption about the amount of money that a typical provider could
expect to receive to improve quality?
Dawn Primarolo: If you are asking
me about what assumptions we make about how much it would actually
cost, we do not undertake those exercises. We allocate the money
using the dedicated schools grant and we give it as a block to
three to 16. That money is made available and the rest has always
been done at the local authority level. Clearly, by using that
dedicated budget, we are using quite a high bar in terms of how
much we are giving.
Q132 Mr Chaytor: One of the
difficulties is that feedback from the work done so far shows
that the PVI sector, where maybe there have been some concerns
about quality in some areas, is saying that the formula is actually
not going to generate a significant uplift to their funding that
would really impact on quality. If my difference in funding at
the end of the day is going to be so marginal, how can it make
a noticeable impact on quality?
Dawn Primarolo: The increase per
pupil that the Government are providing over the spending period
2008-11 is very significant. As I said at the beginning, it is
13% per pupil in that period on top of what has already been a
huge increase since 1997. Again, we have to be very clear about
the purpose of the formula, which was, by agreement, to reveal
the decisions that were taken as an aid to drive quality through
transparency. How that tool is then used as the single formula
is a matter of local accountability, not a matter of the Government
saying that x is going to be transferred to the PVI sector from,
for want of a better argument, the maintained nursery sector.
I think that there continues to be agreement around the principles
but a lack of clarity about why we are doing it in the first place,
as people bring, quite rightly, important and other issues to
the table, but they are not a matter, in my view, for the principles
around the single formula. They may be revealing other things
that have been hidden before but that is about what you do next
local authority-wise.
Q133 Mr Chaytor: Do you have
any regrets about starting this exercise?
Dawn Primarolo: This is very challenging
and, as a new Minister, I recognise how challenging it is. The
Department always recognised how challenging it would be for local
authorities but we have to get it right. I think that trying to
achieve the principles is important but we should not rush it
if is not ready, and that is the position that I am tucking myself
into now. I would rather have it right than done in February 2010
when it is not right—that is my aspiration.
Q134 Chairman: Minister, we
like to get things right as well. Can I just pick you up on something
you said about the increase in the percentage—13.5%, I think
you said? Is that an increase or is that to take account of the
move from 12 and a half hours' to 15 hours' entitlement?
Dawn Primarolo: I believe that's
an actual increase.
Ann Gross: I believe—I think
this is correct—that that uplift applies to the whole funding
through the Dedicated Schools Grant, so it's not a percentage
that simply relates to three and four-year-olds: it's the overall
increase for the Dedicated Schools Grant as a whole.
Q135 Chairman: You've got
to remember that, when we interviewed the Secretary of State and
the Permanent Secretary, they had to put their hands up and say,
"We can tell you a lot about school funding. Most of our
other responsibilities in respect of children and families we
are not even able to account for." I think that's a fair
summary of what they said.
Dawn Primarolo: I was stepping
round that by saying that it's a matter for local authorities
when you give it in the grant.
Q136 Chairman: Rounding up,
there's just one thing I want to say. Some people out there—cynics—might
say, "Look, in this single funding formula you're just responding
to the clamour that came from the independent and voluntary sector—perhaps
the independent sector—for a better deal. Historically,
they felt that they were underfunded compared with the maintained
sector and they don't like that: 40% or 43% have said they can't
make any money out of the amount that you provide for the 12 and
a half—now 15—hours. Indeed, isn't there a threat
that, at some time, the PVI sector might stop taking such children?
Putting all your eggs in that basket could be rather damaging.
The third bit is this: why should people out there make money
out of children? This may sound terribly old Labour, coming from
me, but shouldn't the state sector provide this? There shouldn't
be people making a profit out of children.
Dawn Primarolo: I'd never dream
of accusing you of being old Labour, although I don't think that's
a term of abuse anyway. But on the first point about whether the
formula was designed simply to transfer to PVI, absolutely not.
I tried to explain at the beginning, having looked back at the
record and at everything that has been said in Parliament when
this has been debated, since 2005-06, that part of continuing
to invest and develop in the early years—we had the pre-1997
and post-'97 investment—is how you continue to bring that
together, driven by quality and a transparency that was necessary.
I don't think it was just a question of the Government saying,
"We want to do this because we think it's a good idea."
There was wide agreement that that was the right way to go forward.
On provision and making a profit, my view is that all the costs
associated—return on investment and salaries—are legitimate
in terms of considering the overall level at which we would support
the PVI sector, whether they are providing for the 15 hours' entitlement,
when it comes within free entitlement. Over and above that, that's
not a matter of whether the providers can make a profit for their
business. Clearly, the guaranteed funding stream to provide that
free entitlement will help underpin their business, but we are
not providing the money for people to make profits: we are providing
the money to give access to high quality early years free entitlement.
The PVI providers can do other things to generate their money
as well. That is as delicately as I can put it.
Q137 Annette Brooke: I think
the Minister's probably answered my question. I was a little concerned
about the predictions from the PVI sector that it would be going
out of business. With the suggestion that there might be a delay
in moving to the formula in some authorities, are you concerned
that you may be losing some of the current supply?
Dawn Primarolo: I am not concerned
because it is still the role of local authorities to make sure
of the provision that they are funding, in whatever setting. Whether
the formula is there or not, they are supposed to be securing
the free entitlement and making sure that it is of a high quality.
They can choose whether they use the PVI sector or the maintained
nursery sector. Nothing changes, whether or not they have the
single formula. The issue is highlighted by the discussions about
the formula, but it is not the formula that is driving those considerations.
I have seen the evidence and some of the views on whether it is
economic for them to continue to provide it—they could be
loss making. We will have to wait and see whether that transpires.
I do not have that concern because I have faith that local authorities
protect the free entitlement.
Q138 Mr Timpson: I know obviously
that we don't have to wait for confirmation of your mindset on
this and that implementation is delayed until 2011. But bearing
in mind the issues and concerns that have been raised with you
and that you have taken on board in coming to a preliminary view
on how this should play out for all nurseries, why are you confident
that a year will be sufficient to iron out all the problems? It
is a figure that is often used when delays are required. Are you
confident that in April 2011, we will have resolved the myriad
issues that have been raised with this Committee and yourself?
Dawn Primarolo: I have to be confident
that that can be achieved, given that a reasonable number of local
authorities appear to be in the position where they could implement
without all the issues that have been highlighted in your hearings
and to the Department being settled. I think it would be foolish
to put it off indefinitely or for a longer period, given the complete
unanimity, even in the evidence to your Committee from those who
are very concerned, that having a single formula is right and
that the principles contained in it are right. I have not heard,
as yet, any disagreement on that. It is all about process. Given
the commitment that it is the right way to develop the future
of the sector, a year is reasonable. If you asked me to put my
hand on my heart and say whether further complications might be
revealed in that year, I could not honestly tell you. There are
constraints. Parliament has agreed that it is the right way to
proceed in principle over several discussions on different Bills,
including very recently the Apprenticeships, Skills, Children
and Learning Bill. However, it will require good will and co-operation
from everybody who claims that they support it in principle.
Chairman: Minister, that is a good note
on which to finish the session. Thank you for your patience. We
have kept you for quite a long time. It has been a very good first
session and we look forward to seeing you again shortly.
Dawn Primarolo: I will table a
written ministerial statement tomorrow. I did not want to do it
today because it is a very busy day and I thought that it might
be lost in all the other news. If the Committee has any further
views that it wants me to take on board, I would be more than
happy to receive interim views on how I might proceed when you
have seen the statement, if you think it appropriate.
Chairman: Minister, that is a very good
offer. We will cogitate. Thank you.
Dawn Primarolo: Thank you very
much for your time.
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