Affordable Childcare (Select Committee Report)

Baroness Jones of Whitchurch Excerpts

Wednesday 18th March 2015 Lords Chamber

[Baroness Jones of Whitchurch (Lab)]

My Lords, I am grateful to the noble Lord, Lord Sutherland, for introducing his report with such clarity and authority. I am only sorry that I have not been able to bring my own poem along, but I was very impressed with his. Perhaps that is something we should aim to do in future debates; I rather like the idea.

I also thank all members of the committee for contributing to this excellent report, which is a shining example of our new Select Committee system at work. I very much hope that the evidence and arguments in the report can provide a backdrop to many of our debates about childcare in the future, because the report is certainly a useful resource for us.

One of the key lessons underpinning the report, and which has been echoed by a number of noble Lords, was the lack of sufficient independently verified evidence—particularly on the impact of demand-led measures on employment and earnings. I share the committee’s frustration that the Treasury refused to engage with the inquiry, and I was pleased to hear that that is being followed up. This need for evidence-based policies is something that we take very seriously and which would be at the heart of our policy initiatives in government.

We are also very much aware that the core issue of affordability of childcare is central to a wider cost of living crisis, where family budgets are being squeezed, wages have fallen behind prices and many people who want to work full-time cannot get full-time work. Specifically, the evidence shows that working families with children and one-earner families have been the hardest hit by the Government’s tax benefit changes since 2010. For example, by the general election a family where both parents work will be £2,073 worse off; a family with only one person working will be a staggering £3,720 worse off; and a family where no parents work will be £2,114 worse off. If we add that to the spiralling cost of childcare, which has risen by some 31% since 2010, we can see why this remains an area of policy crisis.

In that context, I raise some issues and challenges that more specifically arise from the report. First, I would have liked the report to drill down a little more into why the costs of childcare have risen more than inflation. We need to understand and fix the funding delivery mechanism, so that any future childcare subsidies do not simply fuel additional costs in the sector. As we heard, the report identified that the private, voluntary and independent sectors are running the free early years places at a loss. Indeed, parents are cross-subsidising the free places, either for themselves or for others. Clearly this is unsustainable in the longer term.

If this is as a result of the way the Government allocate money to local authorities via the dedicated school grants, without sufficient levers to ensure that the money is used for the purpose for which it was originally intended, we need to surface that, address it and face up to it. We all know that local authority budgets have been cruelly cut year on year and that they constantly have to juggle priorities, but if there is a national directive from the centre that, for example, 15 hours of childcare should be provided free to all three and four year-olds, sufficient funds should be allocated, nationally and locally, to make sure that that happens. I therefore agree with the committee that the way local authorities discharge their duties under the free childcare funding formula needs to be reviewed, but equally we need to address the Government’s culpabilities in designing a funding system that, at the moment, seems destined to fail.

The other side of this equation is whether there are, or could be, sufficient places available to provide for this new demand. The noble Lord, Lord Sutherland, referred to places increasing considerably in the past. However, the latest Ofsted report on the number of registered childcare places in England, region by region, shows an overall fall of some 40,000 places between September 2009 and August 2014, and a recent FoI survey found that nearly half of councils—some 44%—said that they would not have enough places to meet the latest offer from the Government of places for disadvantaged two year-olds. This is backed up by the recent report of the British Association for Early Childhood Education, which claimed that there are now 49 local authorities in England without a single maintained nursery school.

Meanwhile, the Government’s plan to expand nursery places on school premises, which I think we would all welcome, is in danger of being scuppered by the upcoming baby boom, which is already putting pressure on primary school accommodation, with increasing numbers of children being taught in overcrowded classrooms and temporary accommodation. We are left to fall back on the poorer-quality provision in the private, voluntary and independent sectors, but as we have seen and heard today, the market has not responded to fill that gap in childcare places as it is not seen as being sufficiently profitable, so that shortfall remains. I ask the Minister where the extra places will come from. I look forward to her response in that regard.

Of course, one area where the Government have shown a considerable lack of concern for early years development is the collapse of the Sure Start network. Not only have 700 children’s centres around the country been allowed to close but an increasing number stand empty for much of the time due to reduced opening hours and cuts to services.

In Swindon, for example, at the end of the month the Conservative council is closing nine out of 14 Sure Start centres, despite calls to delay the decision until after the election. Centres such as these would benefit from our policy to open up children’s centres to offer childcare and would help them fulfil their role as hubs for family services in the community. The charity 4Children estimates that this could lead to at least an extra 50,000 places being delivered into the sector. Perhaps the Minister could remind us why the Sure Start network has been allowed to decline under this Government’s stewardship, and say whether she endorses our policy of using the premises to fill the childcare places gap.

We absolutely endorse the Select Committee’s view that parents face a nightmare of complexity and confusion in navigating the childcare payments systems. As we have heard, it is not immediately clear which route will leave them better off, nor which will make the payments in a timely manner, particularly for those people who do not have permanent and reliable employment. What is worse is that, once again, there is evidence that the parents of children who might benefit most from free childcare are not accessing that payment system. I do not think that anyone can say with confidence that universal credit will be delivered on time and on budget. That is why we believe in simplifying and streamlining the childcare payments entitlement—to ensure that it is accessed by those who need it most.

We are committed to building on the existing 15 hours’ free entitlement for three and four year-olds by offering an extra 10 hours’ free childcare for working parents. This will be supplemented by a primary childcare guarantee of access to childcare through the school from 8 am to 6 pm. We have already spelt out how this will be funded, but the important point is that it will be delivered by investing directly in the extra free childcare places. The value of this extra childcare support is more than £1,500 per child per year. We believe that focusing on supply-side provision—much as we did when we set up the Sure Start system years ago—is the best way of driving up quality and reaching out to the most disadvantaged families who need these facilities the most.

Finally, I should like to say something about quality. The report highlights the need to drive up standards and we absolutely endorse that concern. Of course, the Government demonstrated their complete lack of understanding of child welfare and development when they tried, unsuccessfully, to drive up the ratios between children and staff. Thankfully, those proposals have been put on ice but there remains a suspicion that they might be bought back into play as a short-term fix for the lack of childcare places in the system in the future. I hope that the Minister can reassure us that that will not be the case.

Meanwhile, we are committed to a holistic nought to five year-old strategy that builds on the now substantial evidence that early intervention and quality early years childcare are crucial in determining a child’s successes in life. A number of noble Lords have made that point in different ways. We have already announced our plans to protect the early intervention grant and I would be grateful if the noble Baroness could clarify whether both the coalition partners would do likewise. The next stage has to be to build on Cathy Nutbrown’s excellent work on training and qualifications for early years practitioners. Again, a number of noble Lords have made reference to this, and I should be grateful if the noble Baroness could update us on the Government’s steps in addressing and implementing her proposals.

The report, quite rightly, identifies the difference that high-quality staff can make to child outcomes. We need to work with Ofsted and the FE and HE sectors to provide better professional training packages that provide a well rewarded career for life in a sector sadly blighted by low pay. I agree that we need to find more imaginative ways of attracting people into, and keeping them in, the sector. We also need to find new and innovative ways of attracting those who have had a career break back into the sector, to help boost the availability of professional staff. Perhaps the Minister could share with us the Government’s proposals for improving staff quality, training and attracting new entrants into the sector.

This is an excellent report and we have had a fascinating and forthright debate. I do not feel that I have had time to do justice to all the issues that we have surfaced today. However, as I said at the outset, I think the report will prove to be a handbook and compass for future debates and policy developments, and I am grateful again to all those who made it happen. Meanwhile, I look forward to hearing the Minister’s response.