The next item is the statement by the Minister for Children and Social Care on the Childcare Funding (Wales) Bill, and I call on the Minister to make a statement. Huw Irranca-Davies.

Thank you, Llywydd, for the opportunity to make a statement about the Childcare Funding (Wales) Bill, which was introduced to the National Assembly yesterday. The Bill, although technical in nature, will make it possible for the Welsh Government to put in place a national application and eligibility checking system to support the childcare offer in Wales.

Suzy Davies took the Chair.

The childcare offer was a key commitment in the Welsh Labour manifesto 'Together for Wales', and we are committed to providing 30 hours a week of Government-funded early education and childcare to working parents of three and four-year-olds in Wales for up to 48 weeks per year. The childcare element is aimed at working parents, which means that we need to establish a means by which parents can apply for the offer and be told whether or not they are eligible, and we are keen to ensure that this process is quick and easy. 

In September, we began delivering our childcare offer in seven early implementer local authority areas. This early testing phase is proving invaluable. We are learning from the delivery on the ground. It's helping us to fine-tune the offer before it's rolled out more widely. Early implementation has highlighted some of the issues and the potential challenges relating to the longer term administration of the offer. So, at the moment, local authorities undertake eligibility checks on a largely manual basis. We know that they find this burdensome, and it's resource-intensive, but I would like to thank them for their commitment and for their feedback to date.

But as we move ahead, it simply does not make sense to continue with such a burdensome approach, nor does it make sense for parents to have to provide their local authority with hard-copy evidence of their employment status and monthly earnings and so on. So, as we move towards the full roll-out of the childcare offer from 2020, we want to establish one national approach for processing applications and for making eligibility checks. This Bill will enable us to do just that.

The Bill provides Welsh Ministers with the power to provide funding for childcare for eligible working parents of three and four-year-old children and to make regulations about the arrangements for administering and operating such a fund. It also enables Welsh Ministers to access the information needed to confirm eligibility. It makes provision for Welsh Ministers to require parents to provide information that is relevant to their application, and to permit certain UK Government departments to provide information that is relevant to making that decision about a person’s eligibility. This is sensitive information, and it's only appropriate that the Bill also makes provision to apply a criminal offence in respect of the unlawful disclosure of such information.

The Bill makes it possible also for financial penalties to be imposed in certain circumstances. So, for example, if a person knowingly provides false or misleading information to support their claim for funding. However, applicants will also be able to ask for any decisions in respect of penalties or of eligibility to be reviewed and, ultimately, they will be able to appeal decisions to the first-tier tribunal.

We have explored other ways of setting up this process, and these are set out in the documents that support the Bill, which were published yesterday. Our preferred option is to take the power to make arrangements about how the funding for the offer is to be administered, and that's what the Bill does.

The current intention is to engage Her Majesty’s Revenue and Customs to operate the system on behalf of Welsh Ministers, thereby integrating with the system already operating for the English offer. I believe this is the best option. I’m sure Members will agree that, given current budget constraints and the ongoing period of austerity imposed by the UK Government, it simply does not make sense to reinvent new solutions where ones already exist.

This Bill will give us one common approach across Wales. There will be no postcode lottery when applying for childcare in Wales. Everyone’s application will be dealt with in the same way, and subject to the same criteria and rules. We also consider this approach to be less risky from the perspective of fraud and data security.

The Bill requires the consent of the Chief Secretary to the Treasury and other appropriate UK Government Ministers. I'd like to thank the Chief Secretary to the Treasury, the Rt Hon Elizabeth Truss MP, for providing her consent to the relevant provisions in the Bill. I'd also like to thank the Secretary of State for Wales and his office for their support over recent months in developing this Bill and in seeking the consent of the Secretary of State for the Home Department and the Secretary of State for Work and Pensions.

The regulation-making powers, which the Bill confers on Welsh Ministers, provide for the operational details to be prescribed in subordinate legislation. The regulations will go into detail about who is eligible for funding under the scheme, and how they may go about applying for the funding. All the subordinate legislation, bar the commencement Order, will be subject to the affirmative procedure.

So, it is my pleasure to introduce this Bill for the attention of Assembly Members. I very much look forward to working with the Assembly, and with Assembly committees, over the next few months, as it is my belief that this Bill is an important milestone in delivering one of our manifesto’s key commitments.

Thank you. Darren Millar.

Diolch, Cadeirydd. Can I thank you for your statement and for the briefing that you afforded me earlier on, with you and your senior officials? I think this is an important piece of legislation that needs to be taken through the Assembly in order that we can hang upon this framework the financial arrangements that will need to be in place for the new childcare offer. And you will be aware, of course, that the new childcare offer is also fulfilling one of our manifesto commitments, and manifesto commitments from some of the other political parties who are also represented in this Chamber, in that we all wanted to extend the eligibility for free childcare to those who are in the workplace, in order to maximise the opportunities for people to get back into work and also provide child development opportunities and early education opportunities for those children. I think it's absolutely right that you're seeking to fulfil that ambition.

Now, notwithstanding that, of course, there are some concerns that the eligibility criteria for access to free childcare is restrictive in a way that means that there's not a universal offer that's being made. The children's commissioner and others have voiced their concerns that those young people who are from poorer backgrounds tend to be around 10 months behind their peers in terms of development at age three, and many of those, of course, if their parents are not in work, will simply not have access to what is a high-quality childcare offer that you and I want our young people to have the opportunity to interface with. So, I do wonder, Minister, whether you will as a Government consider the eligibility criteria as we go forward with this Bill, as it moves forward into Committee Stage, so that there's an opportunity not just to discuss the development of the financial framework that sits behind the childcare offer, but also to look more widely at the eligibility criteria that was on the face of the Bill, if you like, in order to perhaps widen it. 

Other concerns have been raised about the involvement of family members who may well be registered and licensed child minders or nursery owners, and their ability to offer childcare that is paid for via the new childcare scheme. Again, I think that this Bill presents an opportunity to address the concerns that have been raised in relation to that. I can see that there's some reference to parents who might be child minders on the face of the Bill, and the exclusion of those specifically, but what about aunties, uncles, grandparents and any other members of the extended family, who may well be registered and licensed, delivering high-quality childcare and early education? They also, I think, ought to have the opportunity to participate in this scheme and to be funded to participate in the scheme.

Concerns have also been raised about capacity within the sector to deliver the childcare offer, and I wonder whether you can tell us where you're at as a Government in terms of pushing the capacity up in those pilot areas. You'll know that there have been some independent reports that have suggested that the capacity that is currently available in Wales is about two hours 40 minutes- worth if it was exploited in full across the whole of the country and this offer were completely taken up per week. That's clearly a long way from the ambition of all young people who are eligible getting the full 30 hours, so I wonder what work you're doing with the National Day Nurseries Association and others in order to ramp that capacity up, and what your experience is in those pilot areas in respect of that.

In addition, the Public Policy Institute for Wales raised some serious concerns about the costing of the free childcare offer, in their report some time ago. They reckoned it could cost up to £228 million to deliver it across the whole of Wales. I appreciate that not all of the detail in terms of the whole roll-out is within the explanatory memorandum in respect of this Bill, because it forms a small part of what you're doing, but clearly it is a concern, and I know that the Welsh Government has stuck to its guns in terms of this £100 million price tag. But perhaps you can tell us, given the continuing experience in the pilot areas again, whether you still feel that £100 million is going to be sufficient to be able to deliver against your ambition.

Just finally, if I can just say in respect of the involvement of HMRC to deliver this, I think it's eminently sensible. It's very clear from the explanatory memorandum and the financial attachments that any other option is blown out of the water in terms of the attraction, in terms of the cost-effectiveness of partnering with HMRC. You're quite right: they've already got an infrastructure that is in place over the border in England, and to expand that to incorporate a Welsh scheme seems to be absolutely eminently sensible. I'm very pleased that the UK Government have engaged positively, via the Wales Office and via the Chief Secretary to the Treasury, in order to give the appropriate consents and support to facilitate this Bill. So, I'm very pleased to see that and I look forward to hearing your response.

Darren, thank you very much indeed. Several points there, but can I just begin by welcoming your broad support for this? As you rightly say, versions of childcare, early education offers, appeared in most manifestos of some sort, with variations on a theme, differently cut and spliced. But it is good that we are now at this point where, with the support of this house around this Bill, we can move to a position where we can see a full roll-out by 2020 of a national Welsh childcare scheme that involves those elements as well—not simply of childcare, but also of that educated, pedagogic influence as well. So, thank you for the support.

To come to one of the main themes of your points there, this is not the universal offer. In fact, there are those who have lobbied for a far more universal offer, not least among those—and I've discussed this with her—is the children's commissioner, but there are others as well. But this isn't that offer; this is very much the offer that has come directly from the manifesto, specifically focused at working parents as described within the Bill and within the parameters that will flow within the regulations. So, I wouldn't attempt at any point during this, including as it progresses with the will of Assembly Members into committee, to pretend this is anything other than what it is. To try and develop something that is a more universal offer will be for another day, and there will be plenty of opportunities to explore that, I am sure. But this actually is quite a focused technical Bill that will allow us to deliver the offer as it's currently framed. However, it does have some flexibility within it, which is quite interesting as we progress into committee, not to do the universal offer, but to look at some of those constituent groups out there in the child minding, childcare sorority and fraternity who are interested in being a part of this. But I think one thing we have to be crystal clear on is that this is not meant in any way to be some form of alternative subsidy into families who are looking after their own children—this is for registered and licensed child minders and childcare facilities, registered and licensed. So, we are having many others say, 'Well, can we not also benefit?' The focus for this is not purely on simply the child minding; this is on the wider benefits for those children within it and how this integrates. And this is part of the pilot—how this integrates also with things like the foundation years offer and so on. So, we can explore this in committee.

You mentioned the issues of capacity and the costings. We're still confident, but part of the piloting, by the way, is in order to actually help us refine where we think we're going with the costings, based on elements of take-up, et cetera, et cetera. So, we are refining that, but we still have full confidence that the costings we initially put forward are within the scope of what we can deliver by 2020 for the full roll-out. And similarly, in terms of capacity, it's quite fascinating that within the different types of childcare, child minding capacity, we are discovering that it's quite different geographically. There are—particularly looking to my right here—within parts of the south Wales Valleys many who are licensed child minders who are looking after their own grandchildren plus two or three or four others. Now that's quite interesting. But part of the piloting of this and the way we are phasing the roll-out is in order to make sure that we are also doing that work alongside it of building the capacity. And we are doing a lot of work with the sectors, the different parts of the sector, to build the capacity, to identify the gaps where there might be gaps in provision, so that by the time we get to 2019-20, we are ready to roll this provision out entirely.

HMRC—thank you for the welcome for the fact that we've chosen that option. We did consider other options. We did look at whether we should provide this, as we currently are, through local authorities. I think I've made clear why, both from cost and the burden of that, it's not the right way to do it, and also data protection, sharing of information, et cetera, et cetera. We did also consider a stand-alone entity to do this, a made-in-Wales new entity. Why would we do it when it's more cost-effective and there's one already there that is doing this? They have had some minor glitches, by the way, in the England model, but one good thing is we're confident, by the time we come to roll out, we'll have overcome those glitches. It could be that in future it could be the Welsh Revenue Authority—the Bill as structured allows those opportunities to be looked at in the future if we need to—but, as currently set, we're keen to progress with the HMRC model and I thank the various Secretaries of State who are helping us facilitate this.

May I thank the Minister for his statement? He’s right, it is a technical Bill, but I look forward to getting to grips with the Bill as the Children, Young People and Education Committee scrutinises it over the next few weeks and months.

Now, I want to start with a note of concern, perhaps, because you will know that Plaid Cymru supports the principle of expanding the provision of childcare in Wales. Plaid Cymru wants to extend it to all children of three to four years of age, not restrict it to children from working families only. It became clear from the evidence that you provided to the committee a few months ago that the Government is approaching this from the parental perspective and the economic perspective, perhaps, more than the perspective of children, whilst we, as a party, believe that children should be the central focus of this policy, and improving the life chances or the educational chances of those children specifically. Therefore, we agree with the children’s commissioner and the reports that have been published by Save the Children and others. We share their concern that excluding children from non-working households from this programme is going to risk expanding that gap between the most disadvantaged and perhaps their less disadvantaged peers, rather than narrowing that gap. We want to equalise the life chances of children. I’m sure you will refer to some of the other programmes available to support disadvantaged children, such as Flying Start, but we also know that many of those children live outwith those areas. So, there is still going to be a gap in provision, and that’s going to be an important gap that we feel should be a priority in tackling this issue.

So, the Welsh Government's focus is primarily, I believe, on the working parent, but I have to say a lot of the evidence suggests that maybe the impact of this kind of programme is limited in their respect, because I'm sure you'll be aware the Public Policy Institute for Wales's report, commissioned by the First Minister two years ago to look at the childcare policy options for Wales, concluded that, and I quote:

'The impact on work participation and work hours for mothers in families with a child of target age is extremely small.'

They conclude that it's unlikely

'to achieve either objective to any notable, possibly even discernible, degree.'

So, I'm just looking for reassurance that you are convinced that £100 million-plus investment from the Government will generate that necessary return in terms of the impact on working families, because the PPIW report suggests that maybe that isn't necessarily the case to the extent that we'd be hoping it would be.

In the paper that you've presented to the Children, Young People and Education Committee—and no doubt we'll go over some of this territory again tomorrow morning when you're joining us in committee—you referred to an OECD report from last year, which talks of benefits for women in the labour market, but of course the focus of that report was on children aged between nought and three years old, not three and four years old, as this policy does, of course. That report references provision in Québec, where an analysis of the policy there has found that it clearly favours upper income families. So, I think you can hear what I'm saying, and I'd be interested just to hear your response to that.

The second point I'd like to make is that Plaid Cymru support for this policy, as was reflected in the compact agreement and as has been already touched upon previously, was predicated on the belief, at least, or the hope, that this was the start of a journey that would take us to a point where there is universal provision. Now, you were very reluctant to commit to that or to suggest that you had that kind of ambition in committee a few months ago. I was just wondering whether you'd had an opportunity to consider where we would potentially go next, because certainly we've seen it as a first step towards the introduction of a universal service. If the Government doesn't intend to show that same ambition then we'd certainly be very, very disappointed to say the least. And it isn't just us that needs clarity on that; I think the sector would benefit from knowing that that's where we're heading ultimately as well.

Now, yes, it's a technical Bill and there is little detail on the face of the Bill, I have to say, and some very important detail as well is being left to regulation in terms of what would a qualifying child be, circumstances in which a person is or isn't to be regarded as another person's partner, circumstances in which a person is or isn't to be treated as carrying out paid work, and I'm just wondering: has this been tabled a bit too early? Do we not know the answers to some of these questions? Because we know that Arad Research is carrying out an evaluation. Should we not wait for that to be published in the autumn? And whilst I welcome the fact that any regulations will be subject to the affirmative procedure, of course we all know, with an affirmative procedure, it's a take it or leave it process; we cannot amend. So, I have some concerns that, whilst appreciating it's a technical Bill, maybe the level of—. I would have expected maybe a bit more detail, so I'm just wondering why now and why not maybe in a few months' time, when you'll be better positioned to present some more detail. 

The explanatory memorandum states that, because of the technical nature of the Bill, and its limited appeal to the wider public, you didn't feel it appropriate to undertake an open consultation, but it would be good to hear what elements of consultation have happened, not just in terms of parents but particularly in terms of children as well. I would welcome your comments on that. 

And the £100,000 upper limit for eligibility—what's the rationale for that? I haven't got an issue with that; it just sounds a little bit like a figure that's been plucked out of the air. I'm sure it isn't. Maybe you could explain to us why it's been pitched at that level. 

Finally, your statement talks of eligibility checks and the associated bureaucracy that comes with that, making it, I quote, 'a burdensome approach'. Well, of course, a universal approach would do away with a lot of that but, as I say, we look forward to scrutinising the Bill and, clearly, we'll be coming back to some of these issues over the next weeks and months. 

Llyr, thank you very much. Can I address the more fundamental question you put first of all, whilst welcoming again your broad support, and the question you raised of, 'Where next on the journey?' That's always the question we should be asking as policymakers and policy influencers. But, again, I simply do not want to overstep the mark or over-promise in terms of this particular Bill. It's a manifesto commitment, it's a very well-targeted commitment, we're absolutely convinced that it will have not only a material advantage, both economically and in terms of freeing up opportunities particularly for the most disadvantaged families, for the lowest income families, but it also has the impact—the Bill as it currently is if this Assembly passes it—on that wider foundational sector. We've talked so much about this within this Assembly, and we've talked about various foundational sectors. Well, what is more extensive across every street and every community within the country except for childcare, registered licensed childcare in all its variety? So, if we get this right and we step up the capacity, it's not only the impact on those parents and families, and some of the lowest income families in the communities we represent, but it's also the wider economic impact, I think, that's actually through stepping up the capacity issues. 

But you do ask, 'Where do we go next on the journey?' It's the right question to ask. I'm not going to give you a direct answer in the process of this Bill, I'm afraid, but I think it is the right debate that we now need to be in. But we do operate within constraints as well. The most obvious one is where we currently are with the funding regime we are in. I think there are persuasive cases being made from both within this Assembly, but also externally, for a more universal offer. But we will have to crunch through the policy implications of that. We will have to crunch through the financial implications of that as well but, for now, what we have in front of us is a very clearly defined targeted offer that is focusing on working parents. And it will have, as a step on that journey, a significant impact on many of our constituents.

There will be, by the way, I'm sure, plenty of opportunities outside of the scope of this Bill to test the wider discussions, not least in committee and here on the floor of Plenary at other opportunities as well. But this is very precise in terms of what this quite technical Bill is seeking to do. 

You asked, 'Why a framework Bill?', and this is, indeed, a framework Bill that is taking the powers—. Now, I've taken large framework Bills through Parliament before, where I've had to explain to committee members as I've taken it through, 'Don't you worry now. I will send you, within a fortnight, by the time we get to our next committee session—'. And Julie will be aware of this, being in Parliament—'In a fortnight, Julie, don't worry, I'll have written the guidance for you, I'll have written the regs in draft so you can see them'. We're not in the same situation here. We're actually piloting in seven early implementer authorities what we're planning to do. We're learning as we go. So, the guidance is out there. The eligibility criteria are out there. The HMRC—even though it's had some minor glitches, it's working in England. So, all of the aspects we're talking about we can touch and feel. It's very different from saying, 'Trust me. Further down the line I'll tell you what kind of things we'll do, what sort of information we'll be looking for from parents, who'll be eligible'. It's already described, so it's a slightly different approach to taking a framework Bill through. I'm not promising, 'Trust me; we'll get to it'. I'm saying, 'Look at what we're doing'.

We are evolving within those seven early implementer areas as well, and that's part of the reason for the flexibility. We need this framework in place. We need to get on with the discussions at both a ministerial and also a Whitehall and departmental level with HMRC and others to start really putting this in place for the 2019-20 roll out. But, meanwhile, we're also learning from those early implementers and part of the flexibility here is that Welsh Ministers—even though we're asking HMRC to do part of the operation for us, it's for Welsh Ministers to come back and say to the Assembly, 'We've learnt something new about some of the criteria, some of the eligibility, who we'd like to be involved as childcare providers. We're coming back with an affirmative motion to say, "We'd like to adjust this. Do you agree?" and so on'. 

So, it is slightly different. But let me also contrast here the—. We haven't, for example, followed the current English example of placing functions on HMRC to manage the application and eligibility checking process for their scheme. It's something we considered, but the model we've opted for—and this is what makes it different in this respect—it gives Welsh Ministers the functions in respect of administering the offer. Consequently, it gives the Welsh Government flexibility not only to chose its delivery agent but also to come back to this house and say, 'We think we can improve it. What do you think?'

So, it does give us some flexibility. It also gives us the flexibility, as I mentioned before, to come back and say, 'Well, there might be a way to, in future terms, look at the Welsh Revenue Authority as a possible deliverer' and so on. It gives that flexibility and we can come back to the house without looking for a legislative slot of primary legislation to do it.

So, I hope that explains. I know it's always a difficult challenge to say how much you put on the face of the Bill and how much should be framework powers, but we think we've got it right in this one because we're already piloting it, the HMRC system is up and running; we know what this looks like.  

We're almost halfway through this debate and I've got a number of speakers who would like to contribute. I'd be very grateful if both questions and answers could be kept as succinct as possible. Michelle Brown. 

Thank you, and thank you for your statement, Minister. I'd also like to thank the Minister for the courtesy that he's shown in meeting with me in advance of this statement. His communication of the broad principles in favour of the childcare funding Bill were very clear and comprehensive and I understand the reasoning behind using HMRC and it does appear to me to be quite sensible. HMRC are already in possession of the relevant data so it does seems a logical choice. I'd also like to compliment the Minister on his implementation of the early testing phase of the childcare offer. His approach on gathering essential data and fine tuning the offer shows that he's approached the programme with strategic thought. A discussion of the administration of the offer by HMRC and outline of these finer details were also very helpful. However, it's on these finer details and the administration arrangements that I and my party have questions and concerns.

I note that there was an opposition day debate in the House of Commons on 26 October 2016, brought by the Minister's Labour Party colleague Rebecca Long-Bailey MP, which raised a number of concerns about HMRC's work on tax credits contracted out to a company called Concentrix. It noted that the company had not met performance standards fully set out in its contract with HMRC. It also emphasised the human factor, including the suffering of women and single mothers who erroneously had tax credits withdrawn by the company, acting on behalf of HMRC. The debate achieved the broad consensus of representatives from all parties in the House of Commons, the consensus being that the contractor's performance was not up to standard and it had caused real human suffering. No-one in this place would want to see these problems replicated in the administration of childcare funding in Wales, so to that end I want to conclude by asking the Minister two things. Firstly, will there be an opportunity for both the Assembly as a whole and the appropriate committees to scrutinise the procurement costs and the procurement terms of the programme from HMRC? And, secondly, will there be an opportunity for the Assembly as a whole to assent or not assent to the HMRC using an external contractor to administer the programme? Thank you.  

Thank you, Michelle, and, again, thank you for the broad welcome there. On the HMRC issues, we are aware—everybody's aware because they've been made quite public—of some of the early implementation problems there have been, both in terms of the tax credits, but also their offer, their parallel offer, in England. However, they are overcoming those, and we've been in discussion with them while we've been discussing at a high level the principle of utilising HMRC as our provider. And we have confidence that, actually, the glitches that they've had will not only be overcome, but that they'll have the machine working smoothly, particularly by the time that we are looking for roll-out, which is 2019-20, and we'll be able to actually watch what is going on in our engagement with them, which is intensive at an official level, to make sure that that is happening.

I will indeed make sure that there is opportunity to come back and report on how discussions with HMRC are going, how the contract is shaping up, because what this Bill will enable us to do is to engage at more than high level, but actually in the detail of the contractual discussions with HMRC. And I will make sure that there are opportunities both for committees but also for Assembly Members generally to find out what is going on with those and to input into them as well. 

In terms of external contractors, I'm not convinced that we are in a position, as Welsh Government, as far as I understand, to insist that they make no use of any external contractors. So, for example, if part of the offer are things such as a digital platform, are we going to object if a digital platform is designed by an external contractor and so on? I think, Michelle, you're referring to more fundamental aspects of the delivery of it, but digital gateway to it is part of it as well and things can go wrong with that. I'll take that away and consider it and look at it, but I suspect that most Government agencies use some form of external contracting. What we need to make sure is that the glitches that they've experienced early on are not repeated, and that we have confidence, not only in HMRC taking on the overall contract from Welsh Government, for which we will be paying, but also that any organisations they subcontract to also have our confidence in delivering this very effectively. But thank you for those points. 

I welcome the Minister's statement today. I think we're really looking forward to this being implemented. Cardiff is certainly waiting for it to come to them and I'm frequently asked about when we are going to have it. 

We'll get there. We will get there. 

I know we will. So, it's good that we're doing this, which, as the Minister said, is a specifically targeted offer to working parents. And I'd just like to say how pleased I am that it is covering the school holidays, because I think, as any parent here will know, for a working parent, the school holidays are a nightmare. And so having this to actually cover the school holidays I think is very good, and I think it makes it a generous offer.

I just wanted to make some points about the administration. I think it's absolutely sensible to use HMRC, and I certainly support that going ahead, but I am concerned about how flexible HMRC can be. Thinking of parents who change jobs frequently, just about manage, and sometimes have to have more than one job in order to manage the households, and thinking about that sort of family, I would like the Minister to tell us how we would be able to cope with rapidly changing circumstances. And the other issue, of course, is parents who are in self-employment, where the income could be different every week, virtually. So, I wondered if this had been covered in thinking about how HMRC would actually administer the scheme. 

Julie, thank you, and 'yes' to the last question in terms of self-employment when it comes to the detailed design of this, and, of course, the England programme as well. The self-employment aspect has been taken on board. In terms of flexibility within the system, I'm pleased to tell you, Julie, that one of the advantages of using the HMRC system, both for English and Welsh language speakers, is the simplicity of the application, because part of using the HMRC system in concert with information sharing between Government departments, means that, in effect, we're not asking them to bring us their current or monthly pay sheets, find all the complex paraphernalia you need to make the application, and decide whether you're eligible—it'll be done for them. It's working effectively already. But, secondly, there's a helpline that runs alongside that, so people who have difficulty with that—there's a helpline to assist them as well. And the helpline as well will make sure, and the commissioning will also—. HMRC actually have quite a good record in terms of bilingual gateways as well, but we'll make sure that within this specifically as well for an answer in English—.

But the results are of course built into this appeals procedure as well, so that, because there will be situations where individuals don't quite fit within the criteria and the eligibility criteria, they also will be able to go through an appeals procedure on the basis of their application being turned down. So, there will be support there, but, again, the great thing about this is we have the—the fact that the England-based HMRC system is now up and running, we can learn from that. We can learn about some of these issues of flexibility, and get it absolutely right when we take ours forward. And just to confirm, because I know people do raise it with me about Cardiff, the reason we're in the seven areas that we currently are in is we're trying different things in different areas. It will come to Cardiff, and when it comes to Cardiff, it will be the bee's knees—it will be the right thing.

I'm glad to hear this will be the bee's knees by the time it comes to Cardiff. And I'd like to thank the Minister particularly for his clarity that this childcare element is aimed at working parents, and there are trade-offs, and there are some who won't benefit, and he's taken that approach, and we will see how it works, in line with his party's manifesto. I'd also say that, because it's 48 weeks a year, some of the other studies—be they on Quebec, or elsewhere—may not be so relevant for what the impact will be on the extent to which parents will work. And I hope he does succeed in seeing significantly higher numbers, and, if so, that should feed through to the resources available to Welsh Government, once the Welsh rates of income tax are devolved next year.

Could I, though, question the approach being taken to take powers to Welsh Ministers in order to use HMRC as an agent? There seems to be consensus across the Chamber—or at least so far—in terms of using HMRC, and HMRC has tried-and-tested processes for how it keeps information secure. And they include very clear protocols on the access, or otherwise, of UK Ministers to information on individual taxpayers. Yet, the Minister says that he wants legislation that enables Welsh Ministers to access the information needed to confirm eligibility. Why? HMRC works in this area by seeing whether an applicant is eligible, and if so, issuing a code to that applicant to allow them to access the childcare for which they're eligible. If HMRC is going to be the Welsh Government's agent, as he says, why does he need to have Welsh Ministers able to access taxpayers' information in this way?

Could he also clarify some of the linkages he's making between the English—or what he describes as the English, but I believe may in certain contexts be a UK system—and what is proposed in Wales? He refers to minor glitches in the England model. I actually think it's been major glitches in a UK-wide operation of tax-free childcare, which parents are eligible for in Wales, on exactly the same basis that they are in England, and it's that one that's had the big problem. The interaction has come because there are three types of free childcare in England: for two-year-olds on the basis of eligibility of certain benefits, including tax credits, where the income is below £16,190 a year; there's then the universal offer, which is for the 15 hours; and then there's the 30 hours for three and four-year-olds, which has been the major problem, and the major problem has been because of the linkage with the UK-wide system HMRC operates for the tax-free childcare. In order to get that 30 hours rather than the 15 hours they were getting before, eligible parents from England have had to set up a childcare account, which would enable them to access the UK-wide benefit, and has been the gateway for receiving those extra hours for the three-year-olds. And it's that area that there's been this very major problem with. Will the Minister confirm that what Welsh Government is proposing to do is to make the whole of the Welsh system dependent on that gateway? 

Can he also clarify why it is necessary to set up an account for UK-wide tax-free childcare to access a free childcare offer for the 48 hours? That's the model HMRC has chosen to date, but it's the one that's been leading to the problems. He is hopefully correct that these problems will iron out, but I would draw to his attention that the whole system is being made dependent on that and alert him to some of the risks contingent on it.

Mark, thank you very much. Probably one of my failings is due to my upbringing: I'm overly polite about what I describe as minor glitches or teething problems, but we are confident—and we have been in discussions with HMRC, both in terms of their tax offer, but also in terms of the childcare offer—that these problems are being ironed out, and will indeed be totally ironed out by the time we come to our use of their mechanisms for delivering our childcare offer. We are aware of these issues with the childcare service in recent months, both in relation to tax-free childcare and the England offer. Now, HMRC are addressing these. We're confident that these troubles will have been resolved by the time we come to use this system. We will also, by the way, have this advantage in that we can learn the lessons of these initial problems from HMRC in how we design and how we commission, and there is an important part here in how we commission our offer through HMRC, and also the issues that they've had with the HMRC and the Department for Education as well, to avoid the problems that they've had. So, we will put in place appropriate governance arrangements to oversee the development and the implementation of this approach and the digital solutions inherent in this.  

In terms of the legislative basis, this Bill provides the legislative basis for Welsh Ministers to make the arrangements for the administration of the childcare offer. Whilst we're proposing we engage with HMRC in the short to medium term, in that design and the commissioning, it could well be, and I'm pleased that we have put the flexibility within the Bill to provide the Welsh Government with the flexibility to change the delivery agent in the future, if we so wish. It's as a delivery agent acting on behalf of Welsh Ministers—as a delivery agent acting on behalf Welsh Ministers—that HMRC will be subject to the scheme that we commission with them, and also the Welsh language service standards that we will make sure are within there, and we will work closely with them to ensure compliance. We are marking the glad situation that with the early problems that they've had, both in the tax aspects and the free childcare offers in England, they've experienced them early and they are now overcoming them, and when we roll ours out we're confident that we won't experience the same problems. 

I realise that I've been remiss in not responding to a specific point in the question as well to do with formal consultation. 

There is one more speaker, but if you want to do that now.  

Thanks. Llyr, my apologies. You asked why there's been no formal consultation. This is slightly unusual from a lot of Bills that come forward, in that we're out there in the field doing the stuff at the moment. So, one: it's a technical Bill, so we didn't feel, on balance, that a consultation on the draft was necessary. Instead, we've discussed the Bill, the approach taken with it, with key stakeholders, including local authorities but also childcare providers, through the early implementer groups, live as we've been doing it. I think every week I've been having updates on how those discussions are going and what they're learning with members of the stakeholder reference groups and also with UK Government departments, and that's still ongoing and will be ongoing all the way to full roll-out. Of course, the offer itself is subject to this programme of early implementation. It's allowing us to test-drive it and to evaluate its delivery. So, as part of that process we're also engaging with a range of parents—extensive numbers of parents, into the hundreds and thousands—childcare providers and other stakeholders on the delivery and operation of the offer. So, in this particular circumstance with this Bill, we didn't feel it was necessary for a consultation again on it. We're out there in the field doing it and hearing it in live time. Thank you. 

And finally, Jenny Rathbone.

Diolch. One of the lessons of this whole situation is we mustn't reinvent the wheel. Just looking at the strategy that you're adopting for delivering this manifesto pledge, which is targeting working parents of three and four-year-olds, we clearly need to prioritise those families who want to work but can't afford to work at the moment, and who will become eligible as soon as they can get the sums to add up—you know, they've got the place and they can accept the work placement. That's the way we need to do it.

I wanted to look at how we are going to possibly tie this in with universal credit, because many of my families are on variable hours, including zero-hours contracts. One of the theoretical benefits of universal credit is that it will have real-time information about what somebody has earned in the last week and therefore how that will impact on the amount of money they're eligible for. So, I can see the benefits of working with the tax and revenue service, but I can also see the benefit of working with Jobcentre Plus, so I think it would be useful to clarify why you aren't thinking along those lines.

I absolutely understand that we can't at the moment afford to do what we all want to do, which is to provide a universal service for all three- and four-year-olds. But it seems that, in the meantime, there's an awful lot we can do using the existing resources. For example, local authorities every five years have to provide a childcare sufficiency assessment, but only every five years. So, in the interim, Cardiff, for example, doesn't know how many households have parents who are working, doesn't know the number of three- and four-year-olds and doesn't know how many three- and four-year-olds are accessing a childcare place. That, for me, illustrates the need for the public services boards to take ownership of this, because by health and education services and social services working together we can pool the information that everybody holds to some extent, and that would enable us to be much more up-to-the-minute on what care is available where.

So, I have a particular focus I want to concentrate on when Cardiff does become an early years implementor, which is how we're going to expand wraparound care based on the number of children who already have nursery places in primary schools, but obviously the room where they're getting that early years place can't be used for the wraparound care because there's another cohort coming in in the afternoon.

Why is not possible for social services to use early years childcare placements for children who they have concerns about? Because we know from the EPI evidence that this is the best way of, if you like, beating the disadvantage that some children get from birth. One of the other issues for me is that we only have one integrated children's centre in the whole of Cardiff, which is obviously in Ely, and which is a centre of excellence for achieving excellent outcomes for all children, whatever their circumstances.

So, those need to be our objectives and it seems to me that, whilst I appreciate that the Government only has the money at the moment for those who have working parents, we also need to use other streams of programmes—Flying Start, Families First, et cetera—to bring around the integrated childcare that we know all children need.

So, one of the key questions for me is: are we going to apply the same criteria to voluntary and private sector providers as we will be doing to public sector providers, as long as they obviously meet the early years education offer, which is the two to two and a half hours early years provision? It seems to me that because primary schools are not in a position to deliver the 30 hours, we have to have other organisations that can deliver the hours but also must be able to deliver the quality. So, I'd be keen to hear what you have to say on that.

Thank you, Jenny. A couple of things in response: first of all, in terms of getting this offer to the people who most need it because, curiously, even though it's focused on working parents, there's almost a universality to it as well, in that we're saying that all working parents should, but we know that there are some working parents who would benefit from this more, and how do we get the information to them? How do we persuade them that it's easily accessible? Well, alongside the early implementation options, we've also been developing—sorry, everything nowadays is a hashtag, but it's actually a hashtag scheme—#TalkChildcare. So, part of the engagement we've been doing, I was mentioning, with the hundreds of thousands of parents, both within the scheme and in other areas, is to try and make it simple to understand what this offers, and we've heard some interesting things. So, such as, you know, I'm from the south Wales Valleys and south Wales Valleys people do tend to, perhaps, disproportionately rely on relatives. So, when you say, 'We've got an offer here with Government-supported, Government-backed childcare', they say, 'Well, I've got my free childcare already sorted, thank you very much.' And we say, 'No, no, we've got it with bits attached to it and stuff.' But part of that approach is very much to get the message out, whether it's in Crickhowell or Llandrindod, or it's in an urban setting in the centre of Cardiff, getting that message out to those communities.

The related, but slightly separate issue of the wider wraparound services is an interesting one. This shouldn't be separate from the wider stuff that we are doing with the integration of children and youth provision and education, the whole pedagogical aspects as well. We're doing so much of it, and I see good examples on the ground. The challenge for us now in children and early years is how to make those experiences commonplace with more wraparound services. We're seeing good stuff happening; it goes nicely alongside this, curiously enough, because it's all to do with that early years intervention. We need to be doing both in parallel.

But this is very specifically the childcare offer based around working parents, and in answer to that, relating to that wider offer then, well, yes, providers need to be registered and licensed. We need to know that the standards are there. That's what we want to see: that they're able, fit and confident to provide not simply childcare, but to a standard that we know there's child development and there's socialisation, et cetera, et cetera. That's what this is about, but that will include social enterprises, voluntary groups that do that, as well as direct local authority provision, as well as many others. We want to encourage all of those who think they can play a part with us to come on board as we roll this out firmly right across the whole of Wales, and this Bill allows us to put in place the mechanisms to start that happening.

Thank you, Minister.