Item 5 on the agenda this afternoon is a statement by the Deputy Minister for Health and Social Services: the childcare offer and support for the childcare sector. I call on the Deputy Minister for Health and Social Services, Julie Morgan. 

Thank you, Deputy Presiding Officer, for the opportunity to update the Senedd on the position of the Welsh childcare and play sector and our childcare offer for Wales. I want to start this statement by saying a big 'thank you' and to acknowledge the exceptional way in which childcare and play providers across Wales have responded to the events of recent months. I'm sure Members would agree they deserve our heartfelt thanks for the invaluable contribution they have made and that they continue to make.

The period since March has been challenging for the sector. Even in the national lockdown earlier this year, we did not require the closure of childcare settings. It was, however, necessary to limit the number of children on site. Those settings that remained open fulfilled an essential role, enabling our key workers to undertake their critical roles. I was struck by the resolve and flexibility of so many of our providers, pulling out all the stops to ensure that they remained open. However, remaining open was not an option for all settings, and, at our lowest point, about 1,940 providers closed their doors. This represents over half of all registered childcare provision in Wales. However, today, things are looking more promising, with only around 428 settings remaining closed. And what we must remember is that, even without a pandemic, we would normally see some settings close for a range of reasons.

Fortunately, we were able to release the restrictions around childcare from 22 June. As of this week, around 1,527 of those settings that closed have reopened, which means that 88 per cent of registered providers overall are now open across Wales. However, in August we conducted a short survey of settings that were open, and that showed that most settings were expecting a 30 per cent reduction in attendance. For small settings in particular, that represents a significant reduction in demand. Our main focus now needs to be on supporting and building a sustainable sector for the future. Our approach over the coming months will be varied, including support for settings, support for the workforce and support for parents, providing them with the reassurance they need to return to childcare and the many advantages it brings to their children.

In April I made the difficult decision to suspend the childcare offer to new applications. At that point it was the right thing to do and allowed us to redirect some of the funding for the offer to help support the fight against the virus in a more direct and meaningful way. And through our coronavirus childcare assistance scheme, we supported over 9,600 children of critical workers, allowing their parents to continue their essential work, and cared for over 900 vulnerable children. Whilst the coronavirus childcare assistance scheme was a necessary and vital intervention that helped deal with the immediate crisis, it was always a priority for the Government to reinstate the childcare offer as soon as practicably possible. I'm extremely pleased that, since August, we have been able to reopen the offer.

We worked very closely with local authorities to ensure applications from parents were managed in a phased way. This has meant that parents who missed out on the offer in the summer term had their applications assessed first, with local authorities moving on quickly to deal with applications from new parents. And I want to thank local authorities for the way that they worked tirelessly to support the coronavirus childcare assistance scheme, and for working with us to bring back the offer. We couldn't have done any of this without them.

Reinstating the offer is a key part of our recovery plan. Not only does the offer provide much-needed security of funding for providers, but it helps thousands of parents, especially mothers, who seem to have been particularly negatively impacted by recent months. There were around 14,600 children accessing the offer in January and it's anticipated that around 8,000 to 9,000 children will take up the offer in the autumn term, which is approximately 75 per cent to 85 per cent of the usual take-up for autumn. Our Flying Start services have also restarted across Wales, and I am committed to completing the review of extending the offer to parents in education and training.

Alongside this, we have introduced the childcare provider grant. Although most childcare providers would have been able to access some form of Government support during the pandemic, we set up the provider grant, which allows settings to claim up to £5,000 towards their costs, to help any who were not able to access the wider business support schemes. The initial weeks of the provider grant have now started and take-up has been slower than we'd hoped, but there is still some time to go and we are working with local authorities, Cwlwm and Play Wales to further promote the grant and offer assistance in completing the application, where needed. All registered full-day care providers are also eligible for a 100 per cent business rates relief exemption until March 2022.

The workforce plan that was published in December 2017 sets out our vision to develop a highly skilled childcare, play and early years workforce here in Wales, making it a profession and a career of choice. This is more important than ever, given recent events, and we will continue to work to see its aims implemented and strengthened, with training and upskilling programmes restarting. The childcare sector in Wales is a rich tapestry of different types of organisations, all with distinct operating models and particular challenges. We must support the whole sector if we are to ensure that there is choice for families and appropriate support for all of our children, and, to that end, I'm also aiming to complete our ministerial review of play to support our thinking as we go forwards.

Deputy Presiding Officer, this Government is committed to tackling in-work poverty, to helping parents into work by removing childcare as a barrier to work, and to ensuring that childcare and play work becomes a profession that is valued here in Wales for the enormous contribution it makes towards nurturing and developing the future citizens of Wales. Thank you for the opportunity to update Members.

Thank you for the statement, Minister. There has been understandable concern from parents, so I welcome this today. I too would like to offer thanks from the official opposition to all our nursery and child carers, who not only do a fantastic job not only just caring for our children, but helping to nurture them and helping them grow as individuals. I welcome the fact that the system is now being reinstated, having been suspended during lockdown, for working parents of three and four-year-olds, because it's a vital lifeline for families, enabling the parents to actually earn a living.

But many nurseries have been operating at a loss due to the fall in the uptake that you've just referred to, presumably due to the ongoing uncertainty and some workers still being on furlough. What support can the Welsh Government offer to nurseries that are facing serious financial hardship due to their enforced closure, fewer children attending and increased costs to deal with COVID regulations? And what consideration has been given to setting up a transformation fund to be able to support the sector until occupancy levels pick up further than you've said, and to really review the hourly rate to reflect the additional costs that they've had to incur, as called for by the National Day Nurseries Association? 

The organisation Cwlwm, which you referred to, has said that most childcare providers did not qualify for the Welsh Government support, and the sector was being ignored during the pandemic. Cwlwm, an umbrella body that represents 4,000 childcare providers, estimates 90 per cent of nurseries, day care centres, clubs and childminding services have closed in the last month, but still had to pay bills and rent. A Welsh Government scheme offering grants up to £10,000 to businesses is still not available to most nurseries, they say, because they need to be registered for value added tax, and most childcare businesses are exempt. Cwlwm chairwoman, Dr Gwenllian Lansdown Davies, said clarity was needed so providers could pay their staff, and the VAT exemption needed to be lifted or childcare businesses would not survive the pandemic. I'd love to hear what you could say on that, Minister, please.

I hear what you're saying about not requiring childcare providers to close during the pandemic, but the reality is that many did close because numbers simply weren't viable. And in terms of our economic recovery, we need childcare settings to survive and to flourish. Indeed, following the introduction of the childcare offer, Welsh Government has been working to increase the number of childcare places by working with local authorities to create additional capacity. What assessment has the Minister made of whether these plans need revising because of the pandemic, please? Thank you.

Thank you very much for those very pertinent questions. Certainly, I have no—. I'm not trying to say, in any way, that the sector didn't suffer during this period, and I think, by the figures that I gave in my statement, I made clear the numbers that had closed. But also it is very encouraging, the numbers that have actually reopened. And although they have smaller numbers actually going at the moment, we're doing all we can to encourage parents to have the confidence to send their children back, because there is a degree of nervousness, and also to stress how it will enable the parents to continue to go back to work, if they're not able to work. And also, I think, as you mentioned, many parents may still be on furlough, so that means that they don't want their children to go back. So, I think there are many reasons why they're not actually there at the moment.

Certainly, there are many grants that are available that the childcare sector didn't fit into easily. They certainly were able to take advantage of the furlough scheme, and many of them did—the UK Government scheme—and they have had access to some other schemes. But we were aware that there was this gap, and that's why we have put forward the provider grant. Now, that is very new—it's only been there a couple of weeks—but that is particularly aimed at the different settings that have fallen in the loops that have existed.

So, I am confident that the childcare scheme will revive; it is reviving already. I think we all know how absolutely essential it is. It's essential for working parents, it's essential for the economy, and it's essential for the children. And I know you referred to Cwlwm today, and I was very pleased that there was a message here today to say that the position of today is that 99 per cent of cylchoedd meithrin are actually open, and we have been very worried in particular about the Welsh language provision, because the Welsh language provision has disproportionately suffered. So, I think that there is definitely hope there, and we are offering as much help as we can.

I too would like to thank everyone working in this important sector for their contributions over the past few months in caring for children, including children of some of our care workers, so that they could continue to maintain front-line services.

Unfortunately, half of the providers had to close their doors, but now many have reopened, as you mentioned. But 12 per cent continue to be closed. And I would like to look into this a little further and to ask you whether these locations will reopen or have some of these closed their doors once and for all. You go on to say in your statement that most of these locations expect a reduction of 30 per cent in the number of children attending in the near future. Now, that is a significant drop and will make some providers financially unsustainable, and unfortunately, as restrictions tighten once again, there is no sign that the situation is about to improve. As well as the detrimental impact on the businesses themselves, do you believe that there are other implications to this reduction? I'm thinking particularly of the impact on children, on the social development of children, particularly those from disadvantaged backgrounds. We know, and there is plenty of evidence to demonstrate, how important early years care and education is for the development of a child emotionally, socially and educationally. So, how concerned are you about this short-term reduction and possible longer term reduction from the perspective of the child?

As you mentioned, there's been a decline in the number of applicants for the childcare offer. It's lower than usual for this time of the year and one consequence of that, of course, is that there is more money in the budget. So, may I ask you whether you have considered extending the offer to children from families where the parent or parents don't work, so that they could benefit from early years childcare and education, which is something that Plaid Cymru has been calling for from the very outset? I hear you mention a review. When will that review take place and isn't it appropriate now to shift some of the funding in the budget towards those families where the parents aren't in work so that their children can benefit too?

And finally, mentioning the grants available. You have announced the small grants fund for the sector recently. As you mentioned, it's a £4 million fund, but I do understand that at the moment the number of applications to this fund is small. Could you tell us more about this? According to some of the providers that I've been speaking to, there's a lot of work attached to making an application for a grant from this particular fund and the amounts involved are relatively small and you have to provide a great deal of evidence to access the fund. So, I would ask you to look again at the criteria for this fund in order to attract more applications. It would be a shame if all of that £4 million weren't to be spent, and I'm sure you would agree with me on that point. Thank you.

I'd like to thank Siân Gwenllian for those questions. I'm pleased that she recognised the huge contribution that the childcare sector makes and that she thanked the sector for providing the opportunity for care workers to be able to continue to work in this pandemic. The childcare sector played an absolutely vital part.

At this time of the year, applications for the childcare offer are always lower than during the rest of the year, and in my statement I said that it was between 75 and 85 per cent of what we would normally expect at this time of the year. Bearing in mind that, for the reasons I used in my previous answers, many parents may be still reluctant for their children to go to childcare, many may still be working from home and trying to look after the children at the same time, and many may be on furlough still, I think there are reasons why that number is low and we anticipate that it will gradually rise as confidence grows in terms of returning children to the childcare sector.

We did do this survey in August to see what help had been made available to the sector and, in fact, 90 per cent of the people who replied did say that they had some form of Government grant from some place or other. So, I think 90 per cent did get grants, but nevertheless I absolutely accept what Siân Gwenllian is saying because it was a fragile sector before all this happened and obviously we want to give as much support as we possibly can, which is why we produced the provider fund grant. It's only been open for a few weeks, but as you say, the applications are slow at the moment, so I have asked officials to liaise with the providers—with Cwlwm in particular—to see what help can be given and to encourage the groups to apply, because obviously, many of these groups are run by voluntary management committees who are doing it in their own time, and we want to give them as much help as possible, because we certainly don't want that £4.5 million to go to waste, because it was specifically aimed at trying to plug the gaps in the childcare sector.

In terms of the review, we have been considering whether we can extend the offer to people in education and training, and people who are on the cusp of work. That review is taking place. It will report to me in the autumn, and I hope we'll be able to say something definitive to the Chamber towards the end of this term or at the beginning of next term.

In terms of the impact on children, I think Siân Gwenllian is absolutely right: so many children have suffered so much during this period, particularly disadvantaged children. I'm glad we were able to provide some support for disadvantaged children and also through the summer holidays, when we were able to give some money to local authorities to try to provide some provision during the summer holidays. But because we know that it is so absolutely crucial for the early years, for children to have as much support and help as they possibly can, I absolutely agree with her that we have to do all we possibly can to help the children catch up and help support the schools and the childcare settings to do all they can for particularly the disadvantaged children.

Minister, you thanked childcare providers and their staff for everything they've been doing. May I also thank you and Welsh Government for what you've been doing in this area? I'm impressed with the childcare offer as it's been delivered. You have it in your manifesto, but you've actually gone ahead and done it, it came in ahead of schedule, and I'm particularly pleased that you're being at least as encouraging of the private sector with the offer as you are of the public sector.

You mentioned in your statement that the childcare offer is a key part of the recovery plan, and I certainly agree with that. You said, though, that only 75 to 85 per cent of what you might expect in a normal term for people were back, and I just wonder if another reason for that may be the interaction with before and after-school care. Although generally the return to school has worked well, I have had a number of constituents who've raised concerns about the availability of before and after-school care that was there before, and concern that unavailability may prevent them going back to work. Is it the interaction of that with younger siblings which is keeping a significant number from taking up the childcare offer again?

And just to slightly also clarify the childcare provider grant, I think you said that this was only available where other schemes weren't available, but you then referenced, I think, later, them also being eligible for business rates relief. Can I just clarify, is it either/or, or are some providers eligible for both? And also were you particularly concerned to provide support to childminders who might be offering this at home, not from business-rated premises, or is that not relevant here? Thank you.

I thank Mark Reckless for that question. And yes, we did deliver the childcare offer a year ahead of time and I know it has been very warmly welcomed.

I think he does make a very important point about the interaction between before and after-school care in the schools because, certainly, many of the schools have not yet introduced the breakfast clubs and the after-school clubs. There is an absolute duty, as the education Minister has made clear, that the breakfast clubs, which are free and are provided by Welsh Government money ultimately, will be coming back. But with the after-school clubs, I know that there is some concern from the headteachers about having another group, possibly, in the school that is not managed by the school at this point. And I absolutely understand that, because I do think that headteachers have been anxious and have been preparing very carefully for the children to come back to school, and, as you say, it has been very successful. But, certainly, I know of headteachers who have said that they are reluctant to have the after-school clubs back yet, but we hope that they will be introduced soon. So, I think that that is something that we will have to look at very carefully. We are in touch with the local authorities, asking them to encourage headteachers to reintroduce after-school clubs, but obviously that does relate to younger siblings and attendance. So, again, it's something I think he's right that that could contribute that.

In terms of the provider grant, I think that we were looking to try to fill in gaps where groups were not actually eligible for some of the grants that were available, because their premises didn't qualify and they were not eligible. Certainly, it is possible for them to have two separate grants from Government as long as it's not for the same thing. So, you can't apply for two different pots of money for, for example, the salary for one person, but it is possible to cover different areas. So, we are doing all we can to look for ways of supporting the childcare sector, because, as you say, it's absolutely crucial to the recovery.

Thank you. And finally, Jenny Rathbone.

Thank you very much. It is certainly the case that COVID-19 has taken a terrible toll on women's position in the workplace, because they've been targeted by employers as being the first out the door if they're needing to make redundancies. So, we've got some catch up to do on ensuring that we have an inclusive workforce, but also in ensuring that all children have the opportunity of a quality early years education and play. So, your figures of a 30 per cent reduction possibly indicate people who have lost their jobs and therefore can't afford childcare any longer, but also, obviously, the anxiety that some parents may feel about placing their children in early years education.

I fully acknowledge the wonderful work that's being done by childcare providers, certainly across my constituency—both private, public and voluntary sector—but it is a fragile sector, as you say, and we know from study after study that the most effective strategy for closing the gap in attainment is that very high-quality, comprehensive education and play that you can get. We are a long way off countries like France and Germany. Flying Start for two-year-olds has been an excellent initiative, but how are we going to get more nurseries in areas of deprivation where the private sector is very unlikely to go? They are much more likely to be cherry picking areas of our communities where there are many more people who are able to pay. I appreciate all the work you're doing, but it seems to me we have a very considerable challenge still to get where we want to be. So, I wondered if you could tell us how you're going to ensure that everybody has the opportunity to put their child into quality childcare and education, not just those with the resources to pay for it.

I thank Jenny Rathbone for that question and for her contribution. And, of course, she's absolutely right, it's crucial for women in particular that we offer the opportunities so that they are able to work and fulfil their potential, as well as the children's potential.

I think that Flying Start has been one of our flagship programmes, and it has been, from the evidence that we've seen so far, extremely successful. I know that we've all heard headteachers say, 'Oh you know if the children have come from a Flying Start background.' The speech and language provision in Flying Start has been absolutely outstanding. So, I think we know what it is that we can do, and what we have to do is look towards extending what is provided in Flying Start much more widely. It's obviously on a geographic basis and we are more flexible now in terms of trying to get outreach for opening it up to people from outside the Flying Start areas, but that is, as I see it, the key of quality provision.

So, I think that we are considering ways of extending Flying Start, and I think that that is—. I absolutely agree with Jenny Rathbone that we are way behind Scandinavian countries, but we are making progress, and I think providing that high-quality early years is absolutely essential, so that children from deprived communities are able to enter school equally, and the evidence from Flying Start is that they do. So, we have got the key to it, and that's what we need to pursue.

The Llywydd took the Chair.

Thank you, Deputy Minister.

The next item is the coronavirus regulations. Item 8 is postponed and item 10 has been withdrawn. In accordance with Standing Order 12.24, unless a Member objects, the three motions under items 6, 7 and 9 will be grouped for debate, but with votes taken separately. I assume that there are no objections to that grouping.