Ka Lai Brightley-Hodges, Head of Coram PACEY

HMRC changes risk the future of childminding

It is 9.30pm on Thursday 11 December, I’ve just received a WhatsApp from my colleague ‘Heads up – HMRC dropped a bombshell on the ‘Making Tax Digital’ webinar tonight. Removal of the blanket 10% wear and tear rule. Overwhelming, confusing and will be a huge issue for childminders’. Without checking on social media, I already knew this was going to explode. 

We held a webinar with HMRC to try and provide childminders with more insight and support on the move to Making Tax Digital (MTD), which was largely absent prior to this. In the webinar, HMRC announced that the 10% blanket ‘wear and tear’ allowance and other allowances unique to the HMRC agreement with childminders (BIM52751) will no longer apply under MTD and a period of confusion, frustration and chaos ensued. Without a formal statement or written guidance from HMRC, Coram PACEY was left to respond to queries and battle misinformation. As the leading childminding organisation, and the team that co-hosted the webinar in the first place, we felt a huge responsibility to get to the bottom of this. That, however, was a bigger challenge than we imagined.  

As information was drip fed, it became increasingly apparent that the professional associations from all four nations and childminder organisations in England and Wales needed to rally round and work together on behalf of all childminders to get some answers. Collectively, we wrote to John-Paul Marks CB, the First Permanent Secretary and Chief Executive HM Revenue and Customs, urging him to reverse the decision to stop a mass exodus from the workforce. HMRC’s response only spurred us on more – if we needed data to prove it, we would get them data. 

Over 4,800 childminders answered our call and completed our survey. This data showed us exactly what we already knew – that this decision is the biggest risk facing our profession in recent years. With a huge 53% of childminders saying that they are looking to leave the profession as a direct result of this decision, risking around 83,000 childcare places in England and Wales. 

This data is impossible for the government, the Department for Education and HMRC to ignore: 

• 82% of respondents said this change would leave them financially worse off (70% significantly so).    

• One in three plan to take on fewer children (31%).  

• One in three plan to increase fees for families (31%).  

Whilst the immediate results from the survey are alarming, I also worry about the longer-term impact on the childminding profession. The implications on childminders’ time due to the additional administrative burden cannot yet be fully understood. Childminding is a unique profession and unless you are a childminder working in the thick of it, dealing with the additional pressures of the role day in and day out, it is difficult to truly comprehend the challenge.  

With the phased approach to MTD, we won’t see some childminders move over until April 2027. As it currently stands, those under the £20,000 income threshold are exempt from MTD and will continue to receive the wear and tear allowance and use the existing childminder agreement, creating an unnecessary and unfair two-tiered childminding system. 

• Only 4% of respondents are confident they have sufficient cash flow to cover the cost of repairing or replacing items damaged through wear and tear.   

• 96% said the new process would increase administrative burden on childminders.  

• One in four plan to withdraw childcare places to reduce their business turnover to fall below the threshold for MTD (24%).   

The next few weeks are critical. We are talking to everyone who could influence this decision, keeping the conversation alive across all channels to pile on the pressure and urging childminders to write, write and write again to their MPs. I want to be sitting here in one month’s time writing a blog about how the work we all did together made a difference. 

New Ofsted inspection framework 

Similarly, recent changes to Ofsted inspections in England are having a significant impact on the wellbeing of childminders and could also affect their longevity. We must address it with Ofsted early on and act now. 

Coram PACEY worked collaboratively with Ofsted on the new inspection framework. Ofsted took on board feedback about the nuances of childminders’ work and how this new framework should work for them. This collaboration continued all the way up to the pilot inspections and I have to say, childminders were always considered because we were part of the entire process.  

Whilst the framework was ready to go and we were happy overall; it was hard to see the impact of these changes until the inspections were underway. The inspections under the new framework began in November and we monitored feedback from childminders who had already been inspected. In those early days, the feedback on the inspections themselves was positive. Childminders found it a much more pleasant and less stressful experience with more approachable and considerate inspectors. Considering that the reforms came about following the tragic loss of headteacher Ruth Perry and subsequent Ofsted “Big Listen” consultation, this was promising progress. 

Childminders told us that: 

“The inspection went well. I had two ladies visit they were both very friendly and approachable.” 

“Although I was quite stressed beforehand the actual inspection was quite relaxed.” 

“I would say if all experiences are like mine .. ( and they should be).. there is nothing at all to be feared.. so long as you are ready and aware of requirements.. by this I mean by reading the toolkit.” 

Whilst it’s still ‘early days’, as more inspections that took place and childminders got in touch with us:

• At 18 February there are still no published reports cards for childminders with an ‘Exceptional’ grading. 

• Many childminders we spoke to had been told by inspectors that they could not achieve ‘Exceptional’. 

• Childminders who had received ‘Strong Standard’ were also being told there was nothing they could do to improve and achieve ‘Exceptional’. 

• Having an unattainable grading is hugely demoralising for the professionals that work so hard to provide the highest quality care and education. 

I sat on a call with Sir Martyn Oliver (His Majesty’s Chief Inspector), Early Years Alliance and NDNA at the time and we all shared similar feedback. Providers across the sector had the same concerns around the ‘Exceptional’ grade being unattainable, whilst I was highly concerned about childminders being told they could not achieve it at all. I was assured by Sir Martyn Oliver that this was not the case and that they would be taking steps to remedy this with their inspectors and work to show how childminders could achieve ‘Exceptional’. However, he continued to reinforce that ‘Exceptional’ was only going to be applicable for the providers performing in the very top percentile. 

Since then, I tasked the Coram PACEY team with speaking to as many childminders as possible who have gone through the inspection process. We have interviewed childminders at length to get accounts of their inspection experiences including the planning call, the inspector, the inspection gradings they achieved compared to their expectations, and the impact on their mental health and wellbeing.  

For many, whilst the inspections themselves were positive, the disappointment of not achieving ‘Exceptional’ when childminders believed they could demonstrate exceptional practice was extremely demoralising. For others, the experience of the new inspection framework was overshadowed by being told at the outset that childminders could not achieve ‘Exceptional’ at all. We struggle to understand how some childminders, whom we consider to be operating at the very highest level, did not receive an ‘Exceptional’ judgement. We worry that some inspectors may not understand the context of a childminder setting compared to a group setting and how the grading should be appropriately applied in the childminding context. 

Childminders fed back that: 

“I was told during my very recent inspection that to be exceptional, providers need to be pioneering practice on a national scale – something virtually unachievable for childminders on this scale.” 

“I was told that I cannot achieve exceptional as the inspector wasn’t giving childminders exceptional.” 

“I was asked about my ‘key person’ system. I explained that I did not have a ‘key person’ system as I was the childminder and was the key person for all children. The inspector challenged this stating that because she had assistants she was classed as a small nursery.” 

Coram PACEY worked closely with Ofsted on the inspection changes, so I know that childminders’ experiences were carefully considered, there is no intention by Ofsted to ‘push childminders out of the profession’. However, this is becoming an increasingly difficult position to maintain in the face of consistent feedback from childminders. Somewhere between Ofsted’s good intentions and the reality of inspection outcomes, something is preventing these changes from delivering the transformational impact they were meant to achieve.

Ofsted have told us that they are committed to reviewing the implementation of the renewed inspection framework. They plan to speak to childminders directly through a roundtable hosted by Coram PACEY to receive their feedback and we will support our members to take part in this. They assure us that they will keep monitoring the gradings to assure us that all aspects of the toolkit are accessible across the sector. They will also work with inspectors to maintain consistency in the delivery of messages. 

These challenges are not unsubstantial, and the childminding community’s response should not be dismissed. So, if we want to ensure the legacy of the childminding profession we all need to honestly evaluate the implications of the changes and be brave enough to act now to better support childminders, no matter what part you play in their business and practice. Government groups, regulatory bodies, local authorities, professional associations, childcare charities and sector coalitions – all of us together. 

Whilst we continue to work on our key policy asks and highlight so much of the good practice and hard work happening in childminding right now, especially at a local level, these two recent issues have quickly become our top priority.  

Childminders – the government and sector have asked so much of you for many many years. Please keep going and continue to show your strength, grit and grace until we overcome these hurdles. Remember why you became childminders and be proud of the incredible work that you do for children and families everywhere. Please keep working with us and our community to ensure that childminders are still here providing quality childcare and education to all children for a long time to come.