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Sir Roger Gale (in the Chair)
Good afternoon, ladies and gentlemen—welcome back. Before we begin, I encourage Members to wear masks when not speaking, if possible, in line with Government guidance and that of the House of Commons Commission. I apologise to Members for the fact that, having given you that advice, I may not be able to adhere to it myself because my glasses steam up and I might not be able to see anybody. Please give each other and members of staff space when seated and when entering and leaving the room.
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Catherine McKinnell (Newcastle upon Tyne North) (Lab)
I beg to move,
That this House has considered e-petition 586700, relating to funding and affordability of childcare.
The petition is about the need for an independent review of childcare funding so that we can really think through what we want our childcare and early education sector to be, and what we hope it can do for the families who need it and for us as a society. So many economic and social benefits flow from the sector that it is difficult to summarise in the time we have, but I think most of us would agree on three key reasons why it is so important to support high quality early education.
First, we know from international evidence that so many important life outcomes—from health to wealth and wellbeing—have their origins in the early years. Quality early education can benefit children’s academic and social development, and evidence shows that those benefits are often stronger for children from disadvantaged families, as it starts them off on a more equal footing with their peers when they go to school.
Secondly, access to childcare is crucial for working parents. Closures during the pandemic have served as a real reminder of just how important it is. The pre-school years are a particularly significant time for new mothers: regrettably, decisions around their childcare in that short period can have a huge impact on their lifetime earnings and, consequently, on the gender pay gap.
Finally, helping with the cost of childcare and early education is one of the best ways for the Government to ensure that families with young children—particularly those on low incomes—are not financially crippled by high costs. As the petitioners point out, childcare in the UK is expensive. Statistics from the OECD show that, however we look at it, we are close to the top of the list of developed countries for childcare costs.
I think that most of us would agree on what we want our early years sector to deliver and on those broad criteria, but some may place different emphasis on them. Analysing whether we are meeting those objectives, and how we can improve on them, is a huge task that touches on many complex areas, such as funding, training, accountability and outcomes. I do not think this House has the expertise or the time to cover those in depth, which is why we need an independent review.
During the debate, I want to look specifically at funding, which is the focus of the petition. In that key area, there is strong evidence that we are letting down children, parents and providers, and I will make the case to support the petitioners’ call for an independent review. Determining the right level of funding for the early years is of course the subject of long-running disputes between the Government and sector representatives, but it goes to the heart of what early years really means to us as a country.
Childcare is as necessary for parents to get to work as the roads and the rail network, so why do we not approach and fund it as the vital infrastructure investment that it clearly is? I am sure the Minister will point out that spending on free entitlements—the 15 and 30-hour entitlements for three and four-year-olds, and disadvantaged two-year-olds—has more than doubled to around £3.4 billion since 2010, but it is important to look at what has driven that increase. Most of it has come from successive expansions of eligibility, which are of course hugely welcome. However, what providers are concerned about is a discrepancy between the cost per hour of delivering the free entitlements and the funding per hour that they receive.
The Institute for Fiscal Studies’ latest annual report on education spending shows that funding per hour of childcare is now only about 13% higher in real terms than in 2004, despite an increase of about 150% in total spending. In recent years, funding per hour has declined from its 2017-18 peak, showing that even the modest increase introduced alongside the 30-hour entitlement in 2017 has not been maintained.
Even more importantly, we know that it is not enough just to provide for the costs of delivering childcare. The Department for Education’s publication in June of a much-delayed freedom of information response to the Early Years Alliance showed that the Government were aware of the consequences of introducing the 30 hours policy with an insufficient level of investment. Ministers knew that the investment would meet only around two thirds of costs—meaning higher costs for parents—and force early years staff to look after the maximum legal ratio of children, with significant impacts on quality. With a lack of proper investment in the free entitlement, providers are forced to cover their costs by charging more for the non-funded hours. That means spiralling costs for parents and carers, whose fees have risen three times faster than earnings since 2008—and that is just the average. For the parents of two-year-olds in some parts of the country, childcare costs have risen seven times faster than their wages.
As a working mother both before and since becoming an MP, I have my own experiences of the heart-wrenching stress and pressure of getting the right childcare and support, and of the enormous costs. Our childcare costs are now the highest of almost any developed country. In a Petitions Committee survey earlier this year, 77% of parents agreed or strongly agreed that cost had prevented them from getting the kind of childcare they really needed. One respondent said:
“I do not have the option to have family or friends look after my child when I return to work and I can’t afford to not be in work, but childcare costs more than my mortgage for full time hours.”
Another commented:
“My wages will just about cover our childcare costs, therefore I am basically working only to ‘hold my place’ until my baby is old enough not to need childcare i.e., once she starts school.”
That has a huge impact on the gender pay gap. Clearly, it is still by and large women who take on most of the responsibility for childcare. Research by Pregnant Then Screwed found that 62% of women who returned to work worked fewer hours, changed jobs or stopped working because of childcare costs. Sadly, we know that the resulting loss of wages has a long-term impact on far too many women.
Properly funded childcare also means ensuring that providers have the money to pay and train their staff appropriately. I want to thank early years staff and management for their efforts over the last 18 months. Most staff have worked through the entire pandemic, and many settings have kept their doors open the entire time, looking after the children of key workers and others and keeping our country moving through this international crisis. Early years staff and management deserve our thanks and appreciation, and our commitment to tackle the serious issues raised by the petitioners.
According to research by Nursery World, one in 10 childcare workers relies on foodbanks, and 45% claim some form of benefit. One in eight earns less than £5 an hour, meaning that staff turnover is high, which can impact on the quality of care, the quality of education and the stability provided for children. We also know that in the past decade, there has been a long-term decrease in the number of people who want to work in the early years sector. One nursery manager told me just how difficult it is to retain staff, particularly in a setting with a disadvantaged intake and a high incidence of special educational needs.
Employees feel that they are sacrificing any semblance of work-life balance for minimum wage, leading to higher absence rates and higher staff turnover. That means that a child’s key worker might change to someone both they and their parents are unfamiliar with multiple times in a year, affecting the quality of education that they receive. It also means that settings are regularly thrown into chaos because they cannot recruit fast enough to fill the gaps. I was told that, at least once a month, staffing issues mean that nurseries hope that not every parent will bring their child to nursery, because if every child attended there would be no way to maintain the required legal ratios. It is shocking that this is what some settings face, and it shows how badly off track we have got.
It cannot be right that while staff are poorly paid and parents pay high costs, the sector’s biggest customer, the Government, get away with paying what they know is insufficient funding. Deciding on the right level of funding and the best way to provide it is, of course, not an easy task, and I think that speaks to the need for a comprehensive, independent expert review to consider the matter in detail. Our answer to the crucial funding question speaks to what we want our early years sector to be.
Is it the state’s role to provide the minimum funding to cover, or just about cover, basic costs so that parents can at least return to work? That would mean maxed-out ratios, stressed-out staff, higher costs for parents, and providers that are unwilling to provide childcare as cheaply as possible being driven out of the market. Or are the benefits of a more generous childcare and early years education system worth it? That is what I would argue, as it means that we can unlock greater productivity, put a big dent in the gender pay gap, narrow the attainment gap at school and, in the long run, reduce other social problems such as poor mental health, unemployment and crime.
Unfortunately, in their written response to the petition, the Government said that there are no plans to commission a review of childcare funding, but I do not think that the Minister should be so quick to dismiss the petitioners’ concerns. We need a childcare system that helps not only to make the lives of families and their children better, but to make our economy work. With both parents and providers struggling and with early years staff undervalued and underpaid, childcare is becoming a big political issue, and it is not going away any time soon. I urge the Government to consider the petitioners’ request for an independent review so that we can get this right for everybody who would benefit from it.
Several hon. Members rose—
Sir Roger Gale (in the Chair)
I am just working out who is here behind their masks. I am afraid that I have to impose a five-minute limit from the very beginning, if we are to get everybody in. I call Theresa Villiers.
Theresa Villiers (Chipping Barnet) (Con)
It is an honour to serve under your chairmanship, Sir Roger, and I congratulate the Petitions Committee and its Chair on securing today’s debate. I thank everyone who signed the petition.
Investing in early years provision and education is one of the best ways to secure a successful economy and tackle the root cause of many social problems. A stable and supportive environment during the first few years of life has a crucial impact on people’s life chances, so good quality early years education can be an engine of social mobility. I pay the warmest of tributes to people working in early years in my constituency, in settings such as Bright Little Stars Nursery on Leicester Road, Alonim Kindergarten at the North London Reform Synagogue, and the three maintained nursery schools run by the Barnet Early Years Alliance.
As we have heard, the pandemic has highlighted that childcare and nursery providers form a crucial part of our infrastructure. Without these dedicated individuals, our public services and our economy would grind to a halt, because essential workers would be at home minding the kids. I welcome the around £3.6 billion a year that the Government are devoting to childcare and early years, and I believe that that does not include the further support that many parents receive through the universal credit system.
The petitioners, however, have a valid point. At a recent street surgery, a constituent told me that almost the whole of his wife’s salary as a teacher was being spent on childcare. I, too, would welcome the review that the petition asks for, and appeal for a simpler system of Government support that helps parents, family budgets and providers right across the PVI—private, voluntary and independent—and maintained nursery sectors.
The most urgent financial issue that needs to be resolved is funding for maintained nursery schools, such as those run by BEYA in my constituency. They have excellent results, particularly with children from disadvantaged backgrounds and those with special educational needs or disabilities. As I have highlighted many times in Parliament, and recently in a meeting with the Chancellor of the Exchequer, time is running out for those great schools. They lost out when the funding formula was changed in 2017, and ever since much of the sector has been just about kept afloat by £60 million in supplementary funding. If those schools are to continue their vital work, they need a stable, long-term financial settlement, which they were promised in 2016-17. That would see them take on a new role as system leaders and centres of excellence for the local area. Most urgently of all, maintained nursery schools in Barnet need a share of the supplementary funding, which they have been denied up to now. Without it, their future looks bleak and uncertain.
I ask the Minister to take action to save maintained nursery schools and to take action in response to the petition. If the Government are to realise their ambition to level up the country, and if they are to make further progress on gender equality and tackle the health inequalities exposed by the pandemic, it is essential to get childcare and early years provision right and to give the sector the support it needs.
Stella Creasy (Walthamstow) (Lab/Co-op)
It is an absolute pleasure to serve under your chairmanship, Sir Roger, and to have this debate. I am grateful that you gave me an opportunity to put my jacket on because, like any parent of an under-two-year-old, I have snot and Weetabix on the back of my clothes. I have accepted that having two children means that I will be permanently sticky for the next 18 years. Because I have two children under the age of two in London, I also accept that I will probably never be able to go out because the cost of childcare is so prohibitive.
We have one of the most expensive systems in the world, but high cost does not necessarily mean high impact. The TUC found that, for parents with a one-year-old child, the cost of their child’s nursery provision has grown four times faster than their wages, and more than seven times faster in London. In communities such as mine, which has the 10th-highest level of child poverty, families are already choosing between eating and keeping a roof above their heads. Affordable childcare, like affordable housing, is an illusion. I thank Pregnant Then Screwed, the Early Years Alliance, the Women’s Budget Group, the Fawcett Society, the National Day Nurseries Association and the all-party parliamentary group on childcare and early education for their refusal to let this be the new normal. Childcare is something that everybody needed during the pandemic and nobody got.
As my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) pointed out, during the pandemic the Government found time to make the case for infrastructure investment. They found £27 billion for roads and for 50 million potholes, money for new railways and stations, and even £5 billion for broadband. What did our children get? Well, the Chancellor did say that mums everywhere were owed a debt of thanks for juggling childcare and work. That pat on the back shone a light on how this Government think about working parents. This is an infrastructure issue, and as a result of failing to see it that way, we are losing tax revenue, losing women from our workforce and hampering equality in our society.
We have already talked about the lack of childcare provision prior to the pandemic—30% of local authorities accept that they did not have enough places, and only one in five said they had enough places for children with special educational needs—but it has become a lot worse during the pandemic. The consequences for families are clear: 75% of children in this country living in poverty are in working households, and childcare accounts for 56% of the overall costs of children for working couples.
Nothing about this system makes any sense. I am a parent of two children under two, but why on earth do we think that when children hit two or three, they are special? What am I supposed to do with these children until then, when it comes to childcare? Frankly, the people who will leave the workforce because they cannot afford childcare will already have done so by the time a child is two, and those of us who can afford childcare will be able to afford it after the age of two.
The Minister will no doubt point to the universal credit system, but it does not make sense in the real world either, because it expects parents to pay for childcare up front and then recoup the cost, as if parents on universal credit have spare cash to begin with. The Minister might say that the flexible support system is there, but only a few have used it on childcare. Anyone who has tried to get childcare in London knows that universal credit, which has been frozen since 2016, means that for most parents it is not a runner.
Failing to invest in childcare is baking inequality into our system for parents and children alike. We know that the vast majority of people using the 30 hours of funded childcare are from the top income earners. We know that the parents of 240,000 children aged two to four could potentially access childcare, but do not because of the cost of it.
We know that this issue is hitting gender inequality, too. My hon. Friend the Member for Newcastle upon Tyne North is right to point out that the burden of childcare too often falls on women. Only 2% of new fathers take any parental leave: that is because we ask them to pay for it, rather than recognise it as the investment in the child’s development and in the family that it represents. Almost 870,000 stay-at-home mums who want to work cannot do so because of the cost and availability of childcare, and those problems have got a lot worse during the pandemic. Some 46% of mothers who have been made redundant said that a lack of childcare was a factor in their selection for redundancy. When furloughing ends, many more will not be able to go back to work because the childcare will still not be available: the loss of places during the pandemic means that many more will be out of work. That means that we will not get the tax revenue from those mums’ work, and it means that their families and their careers will suffer.
The crazy thing about this is that investment in universal childcare from the age of six months pays for itself. When we provide that, not only do we get an income from the sector—and, by God, we should be paying these people a lot more to look after our children—but we get the income from the higher number of women who can be in work. There is an army of mums out there who are mad as hell that they are being ignored and expected to take on childcare at short notice, and I tell the Minister that mums can multitask too, and they can vote. We have to get this right, because we owe it to every child and every mum in this country to see them right.
Steve Brine (Winchester) (Con)
I congratulate the hon. Member for Walthamstow (Stella Creasy), who is a friend, on the new arrival. The importance of this issue in the eyes of our constituents, mine included, is reflected in the fact that almost 113,000 people signed this e-petition, which—as has already been set out—calls for
“an independent review of childcare funding and affordability”.
The public, I think, feel we could do more to create a sustainable future for the early years sector, which I represent here today as chair of the all-party parliamentary group on childcare and early education, which has been mentioned. We in that group have spoken for some time about what I would describe as a market failure in this sector, and the need for a meaningful review of it, so it is good that we are having this debate.
Prior to the summer, I had the pleasure of speaking in another debate on this issue, in Westminster Hall in its other incarnation—these debates come around often—and in the months since, things have moved on. The Chancellor has now announced his comprehensive spending review alongside his Budget on 27 October, and it was very useful to speak to him last week—I was in that meeting too, along with my right hon. Friend the Member for Chipping Barnet (Theresa Villiers)—about many of the issues we are debating this afternoon. I must stress from the outset, as I did to the Chancellor, that this is not all about money. For me, it is about getting back to brass tacks to make our early years funding system work for the children of this country, and for the families who rely on it and the economy that relies on those families. It is about ensuring that our hard-working early years educators—I declare my interest: I am married to one—are rewarded. Most importantly, it is about putting our early years sector on a sustainable footing so that this debate will not keep coming around again and again.
I am here as chair of the all-party parliamentary group, but I am also a Government MP, and I am very proud of the landmark commitment that we as a party made through the 30-hours entitlement. However, I have to say that through my work chairing the group, it has become clear to me that systemic reforms are needed to make this flagship policy work better. Data from the National Day Nurseries Association, which is one of the sponsors of our group, show that in 2019-20, three quarters of councils underspent their early years funding by £62 million. Meanwhile, there is a funding shortfall of almost £3,000 per child per year for every 30-hours place. My hope is that Government will agree to use the forthcoming spending review to fund an early years catch-up premium and address this shortfall, including facing down the local authorities on that underspend. Merely by overhauling the system and tackling the existing underspend, we could properly fund many of those 30-hours places for children right across the country.
That is just one example of how reviewing the funding system would ensure that the existing funding follows the child and is best used. For me, the two issues are intrinsically linked: we cannot fund our early years sector without holding a fundamental review of the funding system, and we cannot simply wait for a review of that system to report without some sort of bridging measures and the long-term certainty that my right hon. Friend the Member for Chipping Barnet spoke about. Between April 2020 and March 2021, there was a 35% increase in nursery closures, just at the time when parents who are key workers needed them most. That is a grave concern for us. The nurseries that are struggling and closing tend to have a higher proportion of Government-funded children. Therefore, the poorer families suffer more from the shortfall between the funding and delivery costs. That causes the lag that is causing the closures.
The future of the sector is in peril, and with it the benefits that it brings to children, their families and the economy. It is not just about the bottom line for providers, but rather the future and development of our children, who are then ready to go on to reception and their primary and secondary education.
Sir George Howarth (Knowsley) (Lab)
The hon. Gentleman makes a powerful case, as have others. Does he agree that grandparents often have to step in to the breach and provide the necessary childcare? While that is very welcome and they do it willingly, it results in an uneven pattern of child development.
Steve Brine
The right hon. Gentleman’s point goes to the heart of the issue. I talked about early years educators; these are not well-meaning amateurs at the end of their career who are just providing plasticine. They are educators and they are preparing children for the world of learning when they go into their primary and secondary education. It is a very good point and it is well made.
Nursery settings have remained open and ready to receive children to help their families get back to work. At the same time, their staffing costs have risen on average by 8.6% through the new national living wage and pension contributions. With the reintroduction of business rates looming, the average nursery will face a bill of about £12,500 for those alone. Surely it would be better to see this money going into the pockets of our early years educators and directly invested in the future of children across the UK. That would be a fitting way to recognise the unsung contribution of early years educators over the last year and to help develop our country’s most valuable asset—the next generation.
Wera Hobhouse (Bath) (LD)
Early years staff have worked incredibly hard during the pandemic, sometimes putting their own health at risk to ensure our children are cared for. I thank each and every one of them. However, one of our early years providers in Bath said, “I feel the Government do not value us and do not see our professionalism and dedication to our role.” Too many childcare workers have felt this way throughout the Government’s response to the pandemic. Guidance to them has been ambiguous, and provision of PPE and testing has come far too slow. Recovery funding has focused primarily on school-aged learners.
I secured a debate on early years funding before the summer recess. My message to the Minister is the same now as it was some weeks ago—acknowledge the value of the early years sector and pay what it costs to deliver it. Funding has been a widespread concern long before the pandemic. Research from YMCA suggests that up to 80% of settings cannot deliver childcare at the funding rate provided by their local authority. I take the point that there is underspending in some local authorities, and we need to get to the bottom of that, but the overall funding gap is still too big. Most providers realistically need more than £6 an hour per child just to break even, let alone reinvest in their business. However, the funding rates do not reflect this. In Bath, in north east Somerset, our local council receives £5.59 an hour for two-year-olds, and just £4.48 an hour for children aged three and above. It means providers have to choose between operating at a loss and subsidising the cost of delivery through fee-paying families.
Of the expenses, 70% are staffing costs. If funding continues to increase at a much slower rate than the national living wage, it will become more and more difficult to pay staff properly. In a country where parents pay the second-highest childcare costs in the world, one in 10 childcare workers are officially living in poverty. Affordable childcare is essential to our economic recovery from covid-19, but with childcare costs adding up to about 30% of the average wage, many parents—usually women—will be forced to make difficult decisions about remaining in or returning to work. Should one of the legacies of covid-19 the roll-back of decades of progress on equality for women in the workplace?
This Saturday is International Equal Pay Day. What better time could there be for the Government to commit to a total rethink of childcare funding? And I add my full support to calls for a meaningful review of early years funding, which must include a multi-year funding settlement, simplifying the funding system and making sure that funding follows the child. All allocations of early years funding must consider children with special educational needs and disabilities, across all settings.
Childcare is an investment in our future. It is time that it was treated as such.
Siobhan Baillie (Stroud) (Con)
I thank the Petitions Committee and everyone who signed the petition to secure this debate today.
The childcare juggle is real. Parental life should come with a military gold command schedule-planner. Instead, it is made up of grandparents—if people are lucky enough to have them about—after-school clubs, childminders, understanding bosses, nurseries and friends doing favours for each other.
This morning, I dictated a weekly article for my local newspaper down the phone to my team, while trying to put my wriggling daughter’s leggings on, in between trying to put my face on, answering messages and making sure that she was fed before I handed her over in order to come here. On top of all that, the cost of childcare is truly painful for many people.
I will make five key points before I move on. No. 1 is that we cannot afford to have the vital talent of the parents of young children being kept out of the workforce; the country and the economy will not thrive without them.
No.2 is that if anyone has ever seen what a working mum fits into an hour of “free” time before legging it back to the school or nursery gates, they will know that mums could singlehandedly fix the economy’s problem with productivity if they were freed up to do so.
No. 3 is that child carers, nursery teams, nannies and early years teachers are all skilled angels who need more career recognition and pathways to higher salaries. This profession deserves respect and everybody found that out when they tried to home-school children over the past year.
No. 4 is that the wellbeing of a child will always come first for parents. We must work harder to ensure that childcare providers improve our system, so that the choice for parents is not one between having a career and having a child.
Finally, No. 5 is that employers are not the enemy and neither are the Government. If there was a single solution, it would have been put in place by now. I am concerned, because if this issue is turned into a political football, as I have read and heard about in some of the coverage today, nothing will get done.
I have long thought that childcare needs a bit of an overhaul, but without throwing the baby out with the bathwater. Parents in my constituency tell me that the 30 hours of free childcare for three and four-year-olds has been invaluable, and approximately 60% of disadvantaged two-year-olds benefit from 15 hours of free childcare a week.
We have a £1 billion flexible childcare services fund being established and I am part of the early years taskforce with my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom), so I know well that we are thankfully bringing about some really interesting changes for families at the moment. So, to lambast the Government for not doing anything, or claiming that they are not trying to help, is wrong.
I would also like to see cross-party working on this issue. We saw Labour, when it was in Government, struggling to address rising childcare costs; those costs rose by significantly more than inflation in 2003 and faster than earnings in 2009. Labour knows how difficult this issue is; Labour Members know how difficult it is. Let us work together to try to find new solutions.
Personally, I am open to the petition’s call for an independent review. However, such reviews really cost the taxpayer tens of millions of pounds and—frankly —if that money is available, I would prefer it to go to the childcare sector. So I am also quite cautious about the request.
However, putting myself into action, I am an advisory board member of the think-tank Onward and I am already in discussions with it about conducting an investigation into childcare. I am also a member of the Work and Pensions Committee, and after hearing from some fabulous young women parents who came to give evidence last week, I have asked the Committee’s Chair to consider reviewing childcare policies under universal credit. I say to the hon. Member for Walthamstow (Stella Creasy) that that would include considering issues surrounding up-front payment.
The early years of a child’s life are absolutely critical; the relationships in their life, which include those with all the people in the childcare sector who they encounter, will set the scene for them for years to come. I ask the Government to work with us. I know the Minister cares deeply about this, as does the Prime Minister, who has a baby and another one on the way and knows this struggle, but we have to look at all aspects of childcare alongside what we are doing with the early years taskforce, which is critical. The Chancellor is very interested in this area, and I am pleased to hear that Members have spoken to him already.
The issues have got much worse during the pandemic. We owe it to every parent and child and the childcare sector to improve the system. We can show we are working hard for working parents to give every child the best start in life.
Ellie Reeves (Lewisham West and Penge) (Lab)
It is a pleasure to speak in this debate, Sir Roger, on a topic very close to my heart. I thank the Petitions Committee and all the petitioners for securing the debate. I want to start by paying tribute to all the early years educators in my constituency: the nurseries, pre-schools and childminders all worked tirelessly during the pandemic to look after some of the youngest in society.
Early years are critical for a child’s development and for determining their life chances, but the childcare sector faces pressures because of Government neglect over the last decade. Chronic underfunding has left nurseries and childminders facing a growing financial crisis. In this year alone, 2,500 providers have closed, and many talented staff have left the profession. Since 2015, 12,000 early education and childcare providers have been lost, with 30,000 more at risk of closure in the next year.
Millions of parents, particularly mothers, rely on childcare in order to work, and analysis by Pregnant Then Screwed shows that 345,000 women will be at risk of losing their jobs if further childcare providers are lost. Despite that, the Government have said that they are not planning a review of the childcare system or early years funding, but it is clear that urgent steps need to be taken to prevent further childcare closures and to rebuild that essential infrastructure. With the greatest respect to the hon. Member for Stroud (Siobhan Baillie), I imagine that the experiences of childcare and affordability are very different for the Prime Minister than for the vast majority of my constituents.
The funding model has a huge number of issues. Prior to the pandemic, 11% of childcare providers were running at a significant loss, with the industry as a whole suffering an estimated £662 million shortfall in funding. Meanwhile, public spending on childcare has fallen as a share of GDP since 2010, and remains considerably below the OECD average.
The Sutton Trust and the Institute for Fiscal Studies recently found that some of the poorest children are “locked out” of the 30-hours childcare scheme for three and four-year-olds simply because their parents do not earn enough to qualify, and that contributes to the widening gap between the poorest children and their peers before school even starts. The funds provided for that childcare, even by the Government’s own estimate, are not enough to fund the scheme.
A related issue is affordability. Fees have risen three times faster than wages since 2008, making the UK home to one of the most expensive childcare systems in the world. A survey published today, commissioned by a dozen organisations, found that 97% of respondents thought childcare was too expensive, and one third said that they paid more for their childcare than for their mortgage. We have already heard that in London, where I am an MP, the cost of nursery provision for a one-year-old grew seven times faster than wages between 2008 and 2016. It simply is not good enough for my constituents who rely on affordable childcare to be able to go out to work.
Finally, I want to say something about the conditions for people working in the childcare sector, where the average wage is £7.42 an hour. In 2019, almost half of childcare workers had to claim state benefits and tax credits, with one in 10 workers officially living in poverty. That is awful. How can we expect such an important job educating the youngest in society to be done for such low pay?
More and more evidence has been published on how critical early years are for a child’s development and future attainment. Investing in childcare therefore offers a huge opportunity to give each child a greater and more equal start in life. Investing in the sector should start by giving workers pay that reflects the importance of their work. High quality early education is an investment in the future—not a cost. A decade of neglect has left the sector in crisis. However, despite this, there are now so many opportunities for reform to benefit working families, future generations and our economy. I hope the Government will listen to the more than 100,000 people who signed the petition calling for today’s debate, and will provide good quality, genuinely affordable childcare for all.
Cherilyn Mackrory (Truro and Falmouth) (Con)
It is a pleasure to serve under your chairmanship, Sir Roger. I thank the Petitions Committee, and the Chair, for the debate today, and everyone who signed the petition. I also say a huge thank you to all the nursery and early years workers who have done such a sterling job over the last 18 months.
I come at the subject as someone who took full advantage of the Government’s 30 hours scheme. When my daughter was nine months old I had to go back to work, but, as we know, MPs are the most flexible of employers and I was lucky enough to work for one. I took full advantage of grandparental childcare until my daughter was old enough to take advantage of the 30 hours scheme—and I was very grateful for it. Having become an MP, I find myself on the other side of the fence, hearing from those early years providers how difficult it has been, and is. I will not repeat what we have already heard this afternoon.
I, too, sit on the early years taskforce with my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom), and we hope to make some very exciting new proposals in the coming months and years. We had a meeting with the early years providers and the children and families sector at Cornwall Council, and we were both pleased to hear that Cornwall is already doing a lot of what we want to achieve. I am hopeful, and want to put another call out, that if any pilot schemes or funding schemes are going to be running for early years and early years sectors, then Cornwall with its very clean boundaries and co-operative and fabulous team of MPs, councillors and council workers will put itself forward for them.
When someone has a baby—as many of us will know—they have the mum guilt. Many parents do not actually want to go back to work. That is at the thrust of this debate. The cost of living today, mostly because of housing, means that it is very difficult to pay a mortgage on just one salary. That is different to where we were 30 years ago. It is absolutely important that we get this right, and I would support any review that we can have. I am encouraged by what my right hon. Friend the Chancellor has said, and I would support that too.
Fleur Anderson (Putney) (Lab)
It is a pleasure to serve under your chairmanship, Sir Roger. I am very grateful to my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) for leading this debate, speaking so passionately and making the argument for the review so clearly. That is supported by the more than 130,000 people who have signed the petition, so I would like to thank them for taking the time to sign, ensuring that we have this important debate—it is not a debate that we have often enough. I thank the almost 500 people in my constituency of Putney who signed the petition. I thank all the early years staff in my constituency and across the country, as other Members have, for their amazing commitment to educating children before and during the pandemic, when we saw so many changes and challenges. I thank the all-party parliamentary group on childcare and early education, as well as Pregnant Then Screwed, for leading campaigning in this area.
As has been said before—it is shocking—the UK has one of the most expensive childcare systems in the world. We should aim for that not to be the case. Some 75% of children living in poverty are in working households, with childcare costs accounting for 56% of the overall cost of a child for working couples. Childcare costs are 30% higher than average in inner London—in my constituency—and up to 50% higher than in other regions. It is a postcode lottery as to how affordable childcare is.
I started paying childcare costs in 1998, when I had my first child, and I had to carry on until 2017 when my fourth child left primary school. I have experienced many years of struggling to afford childcare costs. The local Sure Start centre in my area was closed—it had been a lifeline for me. For many years, the childcare costs I was paying were equal to my salary; as has been mentioned before, I was literally just paying childcare costs to keep my place in my career. I stepped out of the workforce for many years, because it was just not affordable. I then went back part time. It was a struggle throughout all of those years to afford childcare. The fact that only 389 maintained nursery schools are left in the UK is adding to the crisis, as they are such an important part of our early years provision.
One fantastic state-maintained nursery is Eastwood Nursery School, in my constituency. The headteacher at Eastwood recently said to me:
“The quality of what we can offer is in real jeopardy if our funding is reduced. We are fearful that the much-needed service we provide to the children of a very deprived community is at great risk if we do not have the secure funding to continue our work.”
Funding is only given year-by-year, which is why she talked about secure funding.
“Nurseries will simply not be able to continue at the current rates. Closures of early-years settings across the country will deepen both financial and educational inequalities, while slowing the recovery from the pandemic.”
We need a review; a review has been called for by the all-party parliamentary group on childcare and early education from before the pandemic, but it is even more important now. It needs to look at the pandemic’s impact on nurseries, childminders, pre-school children and jobs. It would be a landmark opportunity for a radical rethink of how we fund and deliver childcare.
I was disappointed that the Government dismissed the call for the review out of hand when so much research has shown the impact of covid-19; 7% of parents have attended an early years setting that has subsequently closed, and single parents were twice as likely to be forced to change jobs—or leave work entirely—as a result of the high childcare costs. The statistics could go on.
We are failing children if affordable childcare is a postcode lottery. We need a review to see what is going on across the country, where the early years sector is failing families, what we need to support the early years workforce better and what the impact has been for children’s development, and to make recommendations that will be implemented and funded. One parent’s comment particularly shocked me:
“I had to cease being self-employed as I could not find or afford childcare. I have secured a new job but this is a massive pay cut and a big demotion…It leaves me with not enough for after school club for my eldest child.”
That is the experience of parents across the country.
I fully support and echo the call of these petitioners. It is time to start treating childcare as the essential infrastructure investment that it is—in our economy, in our families, and in our country. I urge the Minister to go back and look again at this and to urgently launch a comprehensive, expert and independent early years review.
Jim Shannon (Strangford) (DUP)
It is a pleasure to follow the hon. Member for Putney (Fleur Anderson). I followed her in a debate in Westminster Hall, last week, and today I do the same, again on a subject that we agree on. I thank the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) for setting the scene, and for giving us a chance to participate.
Childcare and its affordability are of great interest to every Member in this House. I am sure that not one of us has not sat with a young family to tell them that they are above the threshold and cannot get help. That is, unfortunately, something that I have had to address in my own office recently as the extra £50 per month that they get prevents them from accessing four times that in childcare help—and I want to put on record my thanks to all who provide childcare in my constituency of Strangford, who have helped so many people through the pandemic with what they do. These are everyday problems in my constituency. The options for those families are to live with it, or go to their bosses, cap in hand, and ask for a reduction in hours that will be just enough to put them under that threshold. Many will not do this, as it is not as easy a fix for their boss as it may seem at first glance.
A couple contacted me last week; the lady, in particular, is very unwell. She is on employment and support allowance and personal independence payment. Unfortunately, if she was to transfer to universal credit to access working tax credits and child tax credits, she would automatically find that the childcare that she would qualify for would make her financially worse off. There are many complex issues.
For many, grandparents, whether they are fit or not, are left to fill the breach. There are approximately 14 million grandparents in the UK; one in every three people over the age of 50 is a grandparent. In the past two generations, the number of children being cared for by their grandparents has increased substantially— from 33% to 82%. That is massive. Grandparents are the childminders of today. Almost two thirds of all grandparents regularly look after their grandchildren, saving working parents approximately £6.8 billion nationally in childcare costs, but what is the cost to their quality of life?
We have upped the pension age—we all know about the Women Against State Pension Inequality Campaign, and how those women are unable to leave work at 60. Many women drop their hours at that time of their life to take care of their grandchildren, so they are not able to answer the call of their body and simply slow down. There must be something better for grandparents—more than just a national insurance stamp for minding their grandchildren. Many parents in the middle income bracket simply cannot afford to pay for childcare themselves.
My parliamentary aide is the youngest of five siblings. Her sister was 20 when she had her first child, in the middle of her nursing degree, and my aide was 32 when she had her first. Their mother, Roberta Armstrong, has been providing childcare for almost 50 years: initially caring for her own children and, for the last 27 years, constantly caring for her working children’s children. She has grandchildren in the workforce, grandchildren in medical college, and grandchildren at the start of their education in P2. Roberta Armstrong had her first child at 18. She is not the same as she was at 39, when her first grandchild was born, and yet the demands are the same. Caring for her children and grandchildren has been her way of life, but she has to do what a childminder could never do, and which the parents cannot afford to pay for.
What respite is available for the grandparent, and for my parliamentary aide? She works flexitime to allow her more time off in the holidays; this works well for me, and ultimately it means she can take time off during recess, but jobs like that are not readily available. My wife, Sandra, and I are grandparents as well. She looks after the grandchildren—there are five at different ages. She says the wee boys are the hardest—I would not know, because we only ever had boys—and the wee girls are not too bad. How do we breach the gap for families like those, who are asking too much of their elderly parents because they have no other option?
Many parents are caught in a Catch-22 situation. They earn too much to get help or subsidised childcare, and yet they do not earn enough to pay someone to do everything that needs to be done. This leads to examples such as the 67-year-old grandmother with a heart condition lifting and laying a five-year-old with a broken leg.
Do we consider longer school days? Would that eat into their childhood? Do we ask employers to do more, when the pressure of paid holidays and sick days is already too much for many to bear? Do we provide additional paid clubs that work like wraparound childcare? Something needs to be done. I ask the Government to decide today to help those who work hard and simply want a little help to enjoy their children, instead of waiting until their children have children to take care of their grandchildren. I believe that now is the time. Let us break the cycle and strengthen the family.
Alex Davies-Jones (Pontypridd) (Lab)
Having listened to contributions from colleagues across the House, it is clear that we must open up the language we use when speaking about childcare. It is all too common for the debate and, often, the responsibility for practical and logistical arrangements to fall solely on the mother. In doing so, we are at real risk of alienating hundreds of thousands of fantastic fathers from the wider debate. This is particularly evident when we consider the paltry paternity leave allowances on offer from the UK Government.
I know from first-hand experience that when someone has a newborn in hospital, the ticking clock of a return to work is truly the last thing on their mind. I recognise that my husband and I were luckier than most, because he was able to pool his annual leave to secure more paid time off work, but it really should not have to be that way. I pay tribute to the fantastic work of charities such as Bliss, which has fought for more paternity leave in the case of neonatal care for years. The campaign is working: I was pleased to see the Government recently announce plans to introduce neonatal leave that will cover up to 12 weeks when a baby is receiving neonatal care. Frustratingly, the policy is unlikely to come into force until 2023 at the earliest; even then, it is unclear whether these rights will be extended to fathers. For the 300,000 babies who will spend time in neonatal care over the next three years, that is simply not good enough.
It is a dreadful, sorry state of affairs when the UK Government, which, in their 2019 manifesto—although we know how they feel about manifesto claims—claimed that they have a vision for the labour market that includes being able to
“balance work and family life”
but they are unable to support parents with a robust and fit for purpose childcare system. Thankfully, in Wales the situation is in the hands of the brilliant Welsh Labour Government, which have shown their commitment to supporting parents with childcare costs for many years. This includes the brilliant Flying Start programme, which is a targeted early years programme for families with children under four living in some of the most disadvantaged areas of Wales. The Welsh Labour Government also offer everyone 33 hours of childcare per week for children aged three to four with no conditions.
It is clear that a huge number of our childcare providers are still struggling financially, as has already been mentioned. Thankfully, in Pontypridd and Taff Ely, we have fantastic childcare providers, including Little Inspirations, who have branches in Llantrisant and Tonyrefail. However, in the last year nursery closures have increased by 35% compared with the previous year, and the highest numbers of closures were in the most deprived communities. In addition, Ofsted data has shown that over the last 12 months we have lost 442 nurseries from the childcare register. Childcare is one of the very few female-dominated industries, and low-paid workers in this industry are being hit the hardest.
Yet the care providers working in our childcare settings are not the only ones losing out financially. The motherhood pay penalty refers to the pay gap between working mothers and similar women without dependent children, and it has been well documented over the years. The realities of the gap are genuinely shocking and are impacting people every day. The TUC’s recent report into the pay penalty shows that by the age of 42 mothers in full-time work earn 11% less than women in full-time work without children.
To combat this disparity, a number of steps must be taken. We need to enable more equal parenting roles, so that women are not held back at work. We need to see flexible working—and not just in the form of working from home. I am sure that colleagues will be well aware of the recently reported employment tribunal involving estate agent Alice Thompson. Ms Thompson won a pay-out of more than £180,000 after her boss refused to let her leave to pick up her daughter from nursery. I know that her situation will be familiar to so many. Alice simply wanted to work four days a week and finish at 5 pm, when her childcare finished, rather than at 6 o’clock, and her boss rejected her request, claiming that the business could not afford for her to go part time. That is just one example that reflects the extremely difficult situation that so many parents find themselves in. The Government simply must do better.
To conclude, Sir Roger, I sincerely hope that in her remarks today the Minister reflects on the real need for systemic change in our approach to both the funding and availability of childcare across the UK. The system is failing so many groups of people across society: from our childcare workers in unstable employment to single-parent families, mums who are earning less than their counterparts and dads who want to do more but cannot take the time off work. Parenthood is, of course, a privilege, but it is one that should not come with unnecessary and excessive financial burdens. I urge the Minister to work with her colleagues across Government Departments and the devolved nations to take bold action to support future generations and tomorrow’s parents.
Angela Crawley (Lanark and Hamilton East) (SNP)
It is pleasure to follow hon. Members across this House in this debate in particular, and it is a pleasure to serve under your chairmanship, Sir Roger. I congratulate the organisers of the petition calling for a review of childcare in England on securing 100,000 signatures. It would be wise of the Government to listen to the collective voice of the signatories.
It might be thought rather strange that I should speak in a debate on childcare in England. However, while childcare is devolved to the Scottish Government and the SNP have chosen in the first instance to take a different path from England, it is concerning that, as the petition points out, many families are being pushed further into poverty as a result of the high costs of childcare. That, of course, will be exacerbated by the pandemic.
According to the Early Years Alliance, the UK Government’s offer of 30 hours of free childcare per week in England is not well funded enough, as we have heard, leaving parents scrabbling around for a provider that will give them the right hours and flexibility. As we have already heard from hon. Members across this House, the benefits of good quality childcare speak for themselves, and the need to fund the facilities providing this vital care is essential. As we have heard, the issue is not just about mothers; it is about parental leave, paternity leave and shared parental leave. Ultimately, all those options prevent a motherhood penalty.
The Sutton Trust found that the UK Government’s childcare policy was compounding inequalities and harming the life chances of children. Sir Roger, there are only a few seconds left for me to say that—if the clock is correct—
Angela Crawley
Turning, finally, to the Minister, this is her opportunity. I know that she knows only too well the economic consequences and benefits of good quality childcare. Smashing the gender pay gap needs bold, innovative policies, and good quality, affordable childcare is a pretty good place to start.
Tulip Siddiq (Hampstead and Kilburn) (Lab)
It is a pleasure to serve under your chairmanship, Sir Roger. I would like to thank all my colleagues across the House who took the time to speak in today’s important debate. Like my hon. Friend the Member for Walthamstow (Stella Creasy), and little Pip, I want to begin by paying tribute to Joeli Brearley and everyone at Pregnant Then Screwed for starting this important petition and for the inspiring work that they have done to support women and parents in this country and to fight against gender inequalities.
On no issue is it more important to have dedicated campaigners like Joeli than on childcare, which is all too often ignored by politicians, despite it being a fundamental building block of our economy and our children’s development, as has been repeated several times in the debate. Its importance is highlighted by the fact that well over 100,000 people signed the petition, including 400 of my constituents in Hampstead and Kilburn.
In the Chamber last week I raised the Government’s own statistics, which show a loss of over 3,000 childcare providers in England in the first half of this year alone. This comes on top of a net loss of over 100,000 providers since 2015. I was very surprised that the Minister responded by claiming that there were no problems with sufficiency in the early years sector, given that a third of English councils do not have enough childcare places for parents working full time. My hon. Friend the Member for Walthamstow raised this in her speech. I was surprised by the Minister’s remarks on childminders, which have now drawn much criticism, including from the chief executive of the Early Years Alliance, who commented:
“To hear the Children and Families Minister so casually dismiss the closure of thousands of childminders—and falsely imply that what they provide is just care, rather than education—is both insulting and infuriating.”
I do not want the outside world to think that that is how politicians in this place think when it comes to early education.
Every year, Coram Family and Childcare publishes a survey of childcare costs and availability, and every year it shows that there is a postcode lottery in childcare provision. All too often, the costs are soaring well above inflation. My hon. Friend the Member for Putney (Fleur Anderson) outlined her own experience of living through this postcode lottery and how much misery it has caused so many people in her constituency. A survey published before the debate by Pregnant Then Screwed found that a staggering 19 out of 20 working parents said the Government are not helping enough with childcare, with a third paying more for it than their rent or mortgage—again, a point that has been made over and over in the debate. That is because a full-time childcare place in the UK costs £14,000 a year. As my hon. Friends the Members for Walthamstow and for Putney constantly said, ours is one of the most expensive childcare systems in the whole world. That should make our heads hang in shame.
The sad truth about the eye-watering costs of childcare in this country is that it was a predictable result of the decision that the Government took to underfund the free childcare policy by a third in the last financial year alone. We know that because the Department for Education itself predicted it. Secret Government documents from 2015, uncovered by the Early Years Alliance, warned over and over again that failing to fully fund this policy would drive up costs for parents. Ministers pushed ahead regardless, which, as my hon. Friend the Member for Lewisham West and Penge (Ellie Reeves) said, left the sector with a £662-million annual funding gap even before covid hit.
As if that was not bad enough, there was almost no targeted support either for early years or for wraparound childcare providers during a pandemic that has seen their attendance levels and income plummet to the ground. Then came what early years analyst Ceeda calculated as a quarter of a billion pounds’ funding cut this spring term, due to the premature withdrawal of pre-covid funding levels. It is no wonder that 85% of childcare businesses expect to make a loss or break even this year, as research by the National Day Nurseries Association shows.
It is not just about statistics. There is a very real impact on families, who are struggling to make ends meet. My hon. Friend the Member for Pontypridd (Alex Davies-Jones) talked passionately about equal parenting, the pay penalty, proper flexible working, and how children are being priced out of education at the most important stage of their development. Not only are private fees for early years childcare well out of reach for many families, including those in Hampstead and Kilburn, but a recent Sutton Trust report confirmed that the eligibility for the 30 hours free childcare scheme excludes the poorest. Are these the policies we want to have in our country, where we exclude the poorest from accessing high quality childcare?
As my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) pointed out, parents are being forced to cut hours and quit jobs because they cannot find or afford childcare. Of course, this affects women disproportionately. Three quarters of working mums were forced to cut working hours in the first lockdown due to a lack of childcare. In 2018, there were over 800,000 mothers who wanted to work, but could not for financial reasons.
Jim Shannon
The shadow Minister is making some very important points. Does she agree that it is not fair for the burden of childcare to fall upon the shoulders of grandparents, who do not have the physical ability to look after children in the way they probably did at one time? I believe that the onus is on the Government and the Minister to come back with a response that helps people.
Tulip Siddiq
I thank the hon. Gentleman for his intervention. I was listening to his speech very closely, because I was reflecting that there is no way I could have got through six years of being an MP without relying on my mother—who, by the way, turns 65 today. She is someone who helped me with my childcare, because my father is in a wheelchair; she was responsible for looking after the children when I did not get proper maternity leave from this place. I wholeheartedly agree with the hon. Gentleman, and I hope that the Government will recognise the pressure that is put on grandparents. My mother is 65, but there are lots of grandparents who are a lot older and struggle physically to look after small children. I hope the Minister takes heed of what the hon. Gentleman has to say.
I also want to talk about childcare workers, 93% of whom are women, who are languishing on poverty pay after suffering years of real-terms pay cuts under Conservative Governments. As my hon. Friend the Member for Lewisham West and Penge pointed out, the average wage in the sector is £7.42 per hour, and shamefully, one in 10 staff earn less than £5 an hour. These talented and dedicated workers are unsurprisingly leaving the sector as quickly as they can. It is clear to anyone who has direct experience of the childcare system in this country that there is something seriously wrong with it, and it could get a lot worse if nursery and childcare closures continue as they are at the moment. This petition should be a wake-up call for Ministers and the Government to rethink their approach to child- care funding.
That is why my Labour colleagues and I have been banging on about the need for targeted support to halt the collapse of the childcare sector. We are not being dramatic, and we are not scaremongering: this is the reality of the situation. Our childcare recovery plan also proposes a real, substantial hike in the early years pupil premium, from £302 per person per year to £1,345, as part of a £15 billion package to give every child new opportunities to learn, play and develop. I believe it is time to give childcare the attention and the funding it deserves, so that we can be a country that values children, parents and family and so that childcare becomes a part of the country’s infrastructure, as my hon. Friend the Member for Newcastle upon Tyne North so eloquently put it when she opened this important debate.
The Parliamentary Under-Secretary of State for Education (Vicky Ford)
It is an absolute pleasure to serve again under your chairmanship, Sir Roger. I would like to begin by congratulating the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) on securing this important debate on childcare. Every parent wants their child to have the best possible start in life, and high quality, accessible childcare is a really important part of that. Many right hon. and hon. Members have taken time this afternoon to thank childcare workers, and I agree with them: childminders, playworkers, and each and every member of our early years staff deserve our admiration, our gratitude and our thanks. I also thank Joeli Brearley for having started the e-petition that prompted this debate. Parents such as Joeli value the strengths and opportunities that our childcare sector delivers, and my Department is committed to maintaining a sustainable network of early years providers.
I recognise the strength of feeling about our childcare system, and the Government will continue to consider ways of making childcare more accessible for parents. Many right hon. and hon. Members have pointed out the special importance of childcare to women—to mothers—and as someone who once had three children under the age of four, boy, do I remember that juggling balance that so many Members have mentioned. It has been particularly impressive to hear so many fellow women MPs speak with such passion today. However, I would also like to thank the male colleagues who have taken time to join us in this debate, because it is vital that we all stand together.
I also recognise the importance of the quality of our early education and childcare. Earlier this summer, I visited the Guildford Nursery School and Family Centre and saw how committed its staff are to giving children the best start in life, like so many other hard-working nursery staff and childminders across the country. It has been a true delight to hear so many Members of Parliament mention providers in their constituencies.
Access to high quality early childcare is important because it has such positive benefits for a child’s educational and life outcomes. As we know, childcare is important in helping parents to be able to work. I am proud to be part of a Government who have extended access to early education and childcare to millions of children and parents over the past decade. In 2013, the Conservative-led coalition Government introduced 15 hours of free childcare for disadvantaged two-year-olds. That has helped more than 1 million children to get a much-needed early boost to their education. I encourage all hon. Members to encourage families from lower-income backgrounds to take up that offer, because when they do so children do better at school and it gives them vital skills that set them up for life.
Back in 2017, the Conservative Government announced 30 hours of free childcare for working families, which enabled hundreds of thousands of parents to return to or take up paid work, and many of those families have saved thousands of pounds. Working families can also get help from the Government’s tax-free childcare scheme, which offers a 20% contribution towards their childcare fees and is worth up to £2,000 a year for children aged up to 11 or £4,000 for children aged up to 16 if the child is disabled.
Vicky Ford
I will give way to the hon. Lady, but before I do so I want to congratulate her on her beautiful baby. I hope she is getting a bit of rest.
Stella Creasy
I would get even more rest if this place moved with the times and the law and provided proper maternity cover.
The Minister is talking about the take-up of the 30 hours of free childcare. As has been said, the evidence shows that the vast majority of people taking it up—70%—are from the higher-earner income bracket, and that just 13% of eligible families from the bottom third of the income bracket are taking it up. Why does she think that is the case? Does she recognise that the way it is funded at the moment means that we are excluding some of the poorest families because they cannot afford the rest of the cost of childcare? What does she think is happening?
Vicky Ford
I thank the hon. Lady for her question. When it comes to the take-up of the two-year-old offer, which is particularly targeted at disadvantaged backgrounds, there is a huge discrepancy between different parts of the country. For example, there are parts of London where up to 70% of families have taken it up, and other parts where it is far lower. That is why I encourage Members to get in touch with me if they want and I will tell them about the take-up in their area. As I said, there are areas where seven out of 10 families are taking it up and are continuing to do so. I will talk more about disadvantaged families later.
As the hon. Lady is aware, the Government can also help with 85% of childcare costs for universal credit claimants even if they work only a few hours a week. I know it can be challenging to claim, but it is important to recognise that it is there. In my own jobcentre, the job coaches are working closely with parents to help them with making a claim that so that they can get back into work.
Wraparound childcare is also important as it not only supports parents so they can work but can benefit children and young people’s mental health and wellbeing, and their educational and social development. I was absolutely delighted to go around the country this summer looking at our holiday activities and food programme, which has ensured that thousands of school-aged children on free school meals have had access to childcare as well as exciting activities and food. I thank all Members who visited their HAF programmes this summer. It is the first time that we have ever had anything like that type of project for our children. Of course, we piloted it for three years, but this year it has been all across the country, and local authorities are already setting out their plans for Christmas.
The Government invest a significant amount in early education and childcare, including £3.5 billion for each of the past three years on funding our entitlements for two, three and four-year-olds. In November 2020, the Chancellor announced another £44 million investment for this financial year to help local authorities increase their hourly rates paid to childcare providers. All local authorities have seen an increase of at least 8p an hour in the two-year-old entitlement. The vast majority of areas have had an increase of 6p an hour for three and four-year-olds. Significant increases were also made for hourly rate entitlements funding in 2019.
Several hon. Members from London constituencies mentioned the cost of childcare in London. It is important to note that we pay a higher funding rate for those entitlements in areas where business costs are higher. The average hourly funding rate for a three or four-year-old across all of England is £4.91, but the equivalent for London is notably higher at £6.11. The hon. Member for Hampstead and Kilburn (Tulip Siddiq) may be interested to know that in her constituency, the amount we pay to Camden is one of the highest in the entire country at £8.51.
My hon. Friend the Member for Winchester (Steve Brine) mentioned the spending review. As hon. Members know, we are already working on a multi-year spending review. In the Department for Education, we are absolutely continuing to press the importance of early years care and education right across Government as part of that spending review. Given that we are in the middle of spending review negotiations, it would not be appropriate to launch a separate independent review of childcare at this time because the outcomes of such a review would not be able to feed into the speeding review that is happening right now. We expect the outcome of the spending review to be announced later this year. My hon. Friend also mentioned closures.
Vicky Ford
Hang on, this is important. We do not recognise the description of a 35% increase in closures. Between August 2020 and March 2021, approximately 2,000 settings joined the early years register while around 4,000 left. However, the overall number of childcare places has stayed broadly the same, suggesting that some of these closures were mergers, and in parallel some providers are increasing the number of places they offer.
The hon. Member for Lewisham West and Penge (Ellie Reeves) mentioned access to childcare for vulnerable children. It is important to remember that our early years pupil premium provides up to £302 per eligible child per year, specifically to improve outcomes for disadvantaged three and four-year-olds. She also suggested that three and four-year-olds not having access to the full 30 hours of childcare could have a negative impact on their educational development. In fact, the Sutton Trust admits that its research does not conclude that more formal childcare results in better educational outcomes. The evidence for the positive impact on educational outcomes of attending more than 15 to 20 hours of childcare per week is limited. Over that number of hours, it is helpful for childcare, but less so for educational outcomes. There is evidence that those exiting the market are less likely to be providers in disadvantaged areas of the country.
Vicky Ford
I really want to get some of this on the record because it is important to providers. Between June and December last year, a lower proportion of childcare providers leaving the early years register were from the most deprived quintile in comparison to other areas, with 12% of providers that left the market located in the most deprived areas.
What is important is ensuring that there is sufficient childcare and the Government’s priority is to track whether there are enough childcare places locally for parents. It is encouraging to see that the proportion of parents using formal childcare appears to be similar to before the pandemic. Every six weeks, the Department calls local authorities across the country to discuss childcare provision at the local level. At no time since June 2020, when provision reopened more widely after the first lockdown, has any local authority reported a significant lack of sufficient childcare places for parents who need them. The number of places has stayed broadly stable over the past five to six years, despite an average 3% decline in the number of births each year since 2017.
Throughout the pandemic, settings have continued to access a range of business support packages, such as the coronavirus job retention scheme, if they experienced a drop in their income or if parents were unable to attend their usual place. We are also supporting the early years sector by ensuring expert training and development is available to the workforce. That includes an investment of £20 million in high quality, evidence-based professional development for practitioners in targeted disadvantaged areas, which will give early years settings in those areas the skills to help the disadvantaged children who will benefit most from this assistance.
In June, we announced another investment of £153 million over the next three years, including funding for training of early years staff to support the very youngest children’s learning and development, especially in areas such as special educational needs and disabilities.
Fleur Anderson
On the issues raised by the Minister about sufficiency, are councils’ childcare sufficiency reports used to make an assessment of whether there are sufficient places or not, and of the impact of the sufficiency of places on childcare costs in an area? For example, in my borough of Wandsworth, there may be a sufficient number of places but they are not necessarily in the right areas. We have heard reports of childcare places in the most deprived areas closing more than others, and that may be happening across the country. Does the Minister have a sufficient assessment of sufficiency reports to know this?
Vicky Ford
I thank the hon. Member for her great interest in this subject. We see the number of providers joining and entering the market through the Ofsted register, and we have looked at the providers joining and entering based on areas of deprivation. As I said, those leaving the market are less likely to be providers in disadvantaged areas of the country. Only 12% of those leaving the market were in the most deprived areas.
In the last statistics in March 2021, there were reported to be about 1.3 million places in childcare settings. That has stayed stable over the past five to six years, despite the fact that year on year, for the past few years, we have seen on average a 3% drop in the number of children being born. We have regular contacts with local authorities, and we are not hearing about systemic failures in any local area or about parents not being able to access childcare. They may not be able to get exactly the place or the flexibility they would most like, but there is not a systemic shortage.
High quality childcare, delivered by trained, dedicated staff makes a real difference to children’s outcomes. I include and value childminders when I talk about high quality, dedicated staff.
Wera Hobhouse
We have said here a number of times that one in 10 childcare workers lives in poverty. Does the Minister think that is acceptable?
Vicky Ford
I think it is extremely important that businesses involved in the childcare sector pay the national minimum wage. The 8p and 6p an hour by which, as I said, we have increased the average early years funding, have been more than enough to meet the increases that have been announced in the national minimum wage. That was certainly true in those 8p and 6p increases that we gave last year.
What is really important is the quality of our childcare. Parents not only want childcare, but they want to know that their children are loved, safe and well educated, so high quality childcare is important. We have achieved so much here. The last time we assessed our five-year-olds, nearly three quarters—three out of four—of our country’s youngest children had achieved a good level of development. That is a massive improvement, because back in 2013 it was only one in two of our children.
I know that there are many questions about funding. My officials are in regular discussions with the Treasury as we prepare for the forthcoming spending review. Throughout the pandemic, the early years sector has been a cornerstone of protecting livelihoods and family life, letting our youngest children enjoy their early education with minimal disruption and helping to secure a positive future for each one of those children. I reiterate my deepest thanks to all those who work in early years.
Catherine McKinnell
I thank the Minister for that response, but I fear that the more than 112,000 petitioners who signed the petition would disagree with her assessment that there is not a problem to address. Indeed, Joeli Brearley of Pregnant Then Screwed and the 12 organisations that supported the in-depth research and survey of the parent and provider experience of the childcare system would disagree with the Minister’s assessment.
The petition is very reasonable. It is not asking for a specific amount of funding. It is not even diagnosing exactly what should happen. The petition is asking the Government to hand over to experts for a full assessment of what we want our early years and childcare sector to be and to provide.
I agree—I think hon. Members in all parts of the House who spoke in this debate agree—that we need to get the best out of the funding that goes into the sector. I agree that it should not be a party political issue. The way to ensure that that money is spent in the best way possible, however, is not just to turn down the petitioners’ request for an independent review, but to take it away and consider it.
I appreciate what the Minister said: that this does not fit with the current Budget and spending review schedule. However—I implore her again—the petitioners are not asking for a specific amount of money; they are asking for a wholescale review. We can keep going on, sticking plasters over the cracks, pumping some money here or there, or putting a funding pot in place, but in reality we have a postcode lottery, a family lottery, and parents crying out for more help and support. We have many people silently falling out of the workforce, a productivity problem and a crisis point for many families, with many in the most deprived families just not being heard or supported at all.
Stella Creasy
My hon. Friend is making a passionate plea for why we need the review. One issue that the review could settle is the Minister’s claim that the country has not seen the closure of any places, although the evidence from the National Day Nurseries Association is very clear: in 2019-20, there was an increase of 300 nurseries in this country; but in 2020-21, there was a net minus of 400 nurseries. The Minister is shaking her head, but does she recognise that at the very least, an independent review could get to the bottom of that, so that we as parliamentarians could make informed decisions and have informed debates, because she seems to think something completely different from what the sector is telling us?
Catherine McKinnell
I very much agree with my hon. Friend. With the greatest of respect, I think that petitioners listening to the Minister’s response will feel that hers is an alternative reality, an alternative universe, from the one that they are living in. Parents and providers are struggling. Early years staff are undervalued and underpaid. Childcare is becoming a big political issue, and it will not go away any time soon.
I urge the Minister to take away the petitioners’ request. I appreciate that the answer today is no, but I say, “Don’t close the door on this,” because it needs to be looked at. Not only are parents and providers being let down; ultimately it is the children who would benefit from getting the best early years and childcare system in the world—not just the most expensive, and we are nearly there, but the best in world. Let us aspire to that, and let us ask the experts to guide us in a cross-party way on how we can best achieve that.
Question put and agreed to.
Resolved,
That this House has considered e-petition 586700, relating to funding and affordability of childcare.