Free Childcare

Andrew Rosindell Excerpts

Thursday 12th October 2017 Westminster Hall

[Andrew Rosindell (in the Chair)]

Is Ruth George present to move the motion? [Interruption.] I remind hon. Members that they should be here on time so that debates can begin in a timely fashion.

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[Several hon. Members rose—]

[Andrew Rosindell (in the Chair)]

Order. I advise Members that there is now a four-minute limit on speeches, until the Front-Bench speeches begin.

[James Cartlidge (South Suffolk) (Con)]

I will definitely take only four minutes, Mr Rosindell. I congratulate the hon. Member for High Peak (Ruth George) on obtaining what is a key debate. I do not doubt that she has had feedback; I have had similar feedback in South Suffolk, where we have excellent provision. It is difficult for me to avoid receiving representations, particularly from Yorley Barn, a beautifully located nursery in my constituency, in a village called Little Cornard. The proprietor, Donna Row, recently came up and made representations while I was dropping my three-year-old twins off at the nursery. She made the key point that she feels funding is going down while, as has been said, core costs are rising.

I want briefly to focus on Suffolk, because while I accept that many broader political and national arguments are made, there is a national funding formula by which our county seems to have been particularly disadvantaged. The sense of unfairness in Suffolk is compounded by what has happened with the schools formula over the years.

I want to quote from a couple of my providers. A particular issue in Suffolk has been the drive for graduates in early years. This is from Springfields pre-school. Amy Jacobs emailed me to say:

“All research has pointed towards the positive outcome for children who attend an early years setting that is led by an early years graduate. Suffolk…were therefore extremely proactive in encouraging settings to employ graduates to run their settings. This was supported in the early years funding and we were paid £4.24 per child per hour in order that we could pay our staff”

at that rate. She goes on to say that they now receive only £3.87 per child per hour.

I should add that this is something that all Suffolk Members have been working on, and I am grateful to the Minister, who has taken the time to meet us and go through our concerns with his officials in great detail. We also held a meeting at County Hall, for which unfortunately I was ill and unable to attend. However, again, the core point is that funding seems to be lower at a time when costs are rising, so we as MPs have been trying to understand exactly why that is happening and whether it is driven by factors at a county level or because of the national formula.

I will quote from one other provider. Cheryl Leeks, who runs Woodland Corner, said:

“As you are aware, Suffolk County Council reduced our funding for 3 and 4-year-old children by 11% on 1 April with only 7 week’s notice. Historically the rate received from SCC has been higher than the rate we charge for non-funded children—or additional hours. We were always keen to have funded children as we used to receive £4.24 and a block funding allowance of £550 per term.”

She goes on to say that only £3.87 per child per hour will now be provided.

There are complexities—that is showing one side of the picture—but the key point for us in Suffolk at county level is that we feel that, in comparison to other counties, and particularly neighbouring counties, we seem to be doing particularly badly. Like all Suffolk MPs, I received a note from Gordon Jones, the cabinet member for children’s services at Suffolk County Council, with a table of all our neighbours who get a better allocation than we have received through the early years national funding formula.

This issue is obviously important to me personally because I have children in early years, but in Suffolk we have had a huge amount of feedback from very worried providers. I support in principle the drive for 30 hours—it is really important for our economy to achieve the dynamism we want and flexibility in our labour market that we have this greater provision—but there are clearly issues to address. I believe the Minister is aware of that. I do not want to go on too much longer, because we are in the middle of a discussion about it with him. I simply say that we would like him to recognise that there are these pressures not just of the money going down but of costs going up.

[Andrew Rosindell (in the Chair)]

Order.

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[Bambos Charalambous (Enfield, Southgate) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Rosindell. I congratulate my hon. Friend the Member for High Peak (Ruth George) on securing this important debate. The issue of properly funded, decent childcare has a huge impact on families in my constituency and across the country. It would be good to be able to welcome the Government’s actions on that and their commitment to 30 hours’ free childcare, but I see, from talking to both parents and childcare providers in my constituency, that there are clearly serious problems with the proposals and how they are being implemented.

First, the funding is simply inadequate. The shortfall in the Government’s commitment is detrimental to childcare providers. Last week, I spoke to the manager of a successful and popular nursery in Enfield Southgate. She told me that the Government’s plans make her fearful for her business. The inadequate money from the Government will put a terrible strain on the way in which her nursery is run. She told me that parents who used to pay for her nursery privately are now accessing the 30 hours’ childcare, but the shortfall in money from the Government to fund that will put wages and staffing costs under considerable strain. She also told me that if she were to decide not to offer the 30 hours to parents, she would lose out to other companies that will be offering it.

That hard-working nursery manager feels caught in a double bind: does she offer the 30 hours’ free childcare and risk her business making a loss, or does she avoid offering it and go under because others, who doubtless feel similarly trapped, will be offering it? We know from the excellent research done by my hon. Friend the Member for Batley and Spen (Tracy Brabin) that the fears of that nursery manager are not the exception; they are now the rule. Research also shows that three quarters of childcare providers expect the Government’s policy to have a negative impact on their business; fewer than 7% believe that it will be positive.

The Pre-school Learning Alliance estimates that there is a 20% shortfall between the amount the Government are giving local authorities to fund the scheme and the actual cost to nurseries.

Worse still, the Government are proposing that funding levels will stay the same until the end of this Parliament, even though the cost of wages, rents, pensions and much more are likely to rise during that time. Why should nursery managers and childcare providers such as the one I referred to in Enfield Southgate shoulder the financial risk caused by the Government’s ill-considered plans? The proposal of free childcare is far from free if hard-working childcare providers are carrying the cost, to the extent of even being put out of business. That is not to mention the anxiety and disruption caused to parents and children when a trusted childcare provider goes out of business, sometimes at short notice. If the 30-hour offer is to be truly free for both parents and providers, it must be funded properly now and in the future.

The other serious flaw in this pledge is that it will not help those who need it the most. I know from talking to my constituents that many parents welcome the prospect of 30 hours’ free childcare, especially those who are struggling in low-paid, insecure work. However, those who need help could easily slip through the net with this scheme, not least because of the many technical problems that parents are experiencing. After having huge technical problems accessing the scheme, one constituent contacted me last week to say:

“This is the government’s flagship childcare scheme and it’s an utter shambles with no prospect in sight of a resolution.”

Even more disturbing is the fact that to be eligible for the scheme, a parent must earn more—

[Andrew Rosindell (in the Chair)]

Order. There is a four-minute time limit. I call Liz Twist.

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[Andrew Rosindell (in the Chair)]

Order.

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[Tracy Brabin (Batley and Spen) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Mr Rosindell. I thank my hon. Friend the Member for High Peak (Ruth George) for securing this much needed debate. We have heard some interesting and important contributions. I will just go through a few of them; unfortunately, time does not allow me to mention everyone.

My hon. Friend the Member for High Peak powerfully claimed that the pilot schemes were not actually working as the press said, and that there were nursery closures. The hon. Member for South Suffolk (James Cartlidge) acknowledged that there is a problem and tried to understand why. The hon. Member for Eastbourne (Stephen Lloyd) would like to meet the Minister and providers. We heard from my hon. Friends the Members for Ipswich (Sandy Martin), for Stalybridge and Hyde (Jonathan Reynolds) and for Stockton North (Alex Cunningham). We also heard a powerful statement by the hon. Member for Central Ayrshire (Dr Whitford)—I look forward to my invitation to Scotland. We also heard from my hon. Friends the Members for Enfield, Southgate (Bambos Charalambous), for Blaydon (Liz Twist) and for Colne Valley (Thelma Walker), who gave all sorts of information about portal difficulties and nursery managers saying that they will be closing.

We have had a wide-ranging debate, so I am going to use my contribution to touch on the most pressing issues. I hope that the Minister will use his closing remarks to answer in detail—regrettably, getting clear information from him to date has been slightly challenging to say the least—because both the Labour party and the Conservatives agree that we need more funded childcare. I stress that the problems raised with the policy are not because we disagree with the policy in principle. However, nearly as soon as David Cameron announced the offer at the 2015 general election, worries that it was underfunded came to light. The Government pushed on the delivery, and the voice of concern about the potential impact became louder.

The Pre-school Learning Alliance found a 20% funding shortfall. The Social Market Foundation and the New Economics Foundation have said that this version of free childcare is regressive. Research from Ceeda shows that nearly half the childcare settings are currently recruiting staff, but four out of five say that they are struggling to fill vacancies. If this were any other industry, we would be talking about a recruitment crisis. The Sutton Trust has warned that, as it stands, the 30 hours of free childcare offer widens the gap between disadvantaged children and their wealthier peers before they start school, as it benefits wealthier families. The Social Market Foundation shows that of the extra money that the Government are pumping into early years, 75% is being spent on the top 50% of earners and less than 3% will go to the most disadvantaged. Many providers have left or are in the process of leaving the sector. Will the Minister include in his summing-up how many Ofsted good or outstanding providers have left the sector in the past six months?

We are now well into the first term of this policy, and the Minister has told us that 216,384 parents have their codes for this term. However, just last night he told me via a written answer that 71% of parents had had their codes validated, but the Department for Education claims that the figure is now 90%, so which is it? Do we take the Minister’s word or the Department’s? I would welcome an intervention if he could clarify which is correct. If the figure is 90%, that leaves 20,000 children without a place during this August term, which will obviously be the quietest, as more children come of age later in the year. Does the Minister share our concern that the sector will struggle to provide places as the year rolls on, because of lack of funding?

We have talked about signing-up codes. To deal with an eligibility code, the application system has to be fit for purpose, which it clearly was not as the August deadline approached. The system’s inadequacies have left parents stranded. There is confusion between Her Majesty’s Revenue and Customs and local authorities as to when the deadline for validating the code is. A constituent of mine has a code that is eligible until 7 December, but as she did not receive the code until 15 September the local authority has said that it cannot fund her place, and all the while HMRC is telling her that there is no problem and that she should be receiving her place. There is no clarity even on issues as simple as the deadline. It seems like amateur hour to me.

Variations from local authority to local authority are becoming a theme, with one authority planning to retain some disability access funding even though that should be passed on in full to providers. Another local authority is charging a provider for every minute that parents dropped off late and collected early, with the charges amounting to £4,000. Others require all providers offering funded places to receive an annual visit from the local authority’s early years team, which is what we all thought Ofsted was supposed to be there for. Getting payment out of local authorities is proving a struggle. Issues include refusing to pay monthly, bringing headcounts forward at short notice and requiring new email addresses and bank accounts in order for payments to be received.

The Minister knows full well that that is not an acceptable way to treat small businesses and microbusinesses. An issue that I have raised with him is that settings will charge for extras such as trips out, nappies and lunches in order to pay their staff and keep the lights on—to stay afloat. Can he guarantee today that there will not emerge a two-tier system whereby parents who cannot afford to pay for the extras do not have access to the policy? Does the Department intend to monitor the additional charges placed on parents, and will he commit to reporting on that? Will he consider a cap on those charges, or will it be a case of parents who cannot afford the extras being sent to the end of the waiting list?

If there is one thing noticeable by its absence, it is that the Minister never wants to talk about the quality of childcare. The Labour party has a policy to move to a graduate-led workforce and to put child outcomes at the heart of early years policy, by funding our policies properly. It is curious to me that the Conservatives do not have the same goals. Often, the highest-quality provision comes in the form of maintained nursery schools, many of which are seeing numbers drop, as they cannot offer 30 hours because of the cost of lunch provision. Nursery schools, which are often in the most deprived areas, provide excellent care, closing the gap between the most deprived children and those more fortunate.

Many children from deprived communities currently have access to quality nursery schools that employ qualified nursery school teachers. Those schools do a tremendous job of enhancing those children’s life chances, but they assure me that they will not be able to fund the continued employment of those qualified teachers. It is important that we distinguish between childcare and early years education. Save the Children is concerned that 40% of nurseries that took part in the pilot reported a loss in profits and, therefore, a threat to their sustainability. When I asked how many children were registered with maintained nursery schools for this academic year, the Minister was unwilling to share that information. Will he do so today?

When the Minister last spoke in the Chamber, he mentioned that he would like to get the 5,500 dormant childminders “back into that business”, but how will he do that if their wraparound care is not necessarily part of the 30 hours provision? Childminders are often highly qualified women with a level 3 national vocational qualification who have been Ofsted-assessed. I have been told categorically by a number of constituents that the county council funding provided means that they will go bankrupt. They are just going to throw in the towel—why bother?

I encourage the Minister to think again about a major injustice to childminders in this roll-out. His Department has relaxed the parent-child ratio for childminders who provide wraparound care. Is it the Government’s intention to relax that further in an attempt to make the funding work? Is that the way forward for childminders? How many freelance working parents have been excluded from the entitlement because they cannot guarantee that they will work more than 16 hours a week on the national minimum wage? The reality for many working parents in my constituency is that their employers will not guarantee them those hours, and nor can they, which makes it even harder for parents to return to work.

In the Chamber, the Minister said:

“There are colleagues in the House from places such as York, Northumberland”—

he goes on to list them—

“which have been in the pilot for a year. I have not heard a peep from anyone saying that the scheme is not working, so obviously the pilot has been successful.”—[Official Report, 6 September 2017; Vol. 628, c. 173.]

As my hon. Friend the Member for High Peak mentioned, those nurseries are having trouble squaring the circle. When papers, experts, providers and think-tanks all say that the policy is not sufficiently funded to work, surely it is time to reassess and ramp up the finances so that it is properly funded?

I have been startled by the number of providers who have said to me that they will not be able to take on children who need extra support. If such a child presented, they would put the child on a waiting list or gently suggest that there might be a better setting for them. That is discriminatory, but not unexpected when nurseries are budgeting to try to stay afloat, rather than to offer the best, most comprehensive service.

In conclusion, there is little doubt that the 30 free hours of childcare will be a welcome relief to many parents. It will bring childcare costs down for many parents, particularly at the upper end of the income scale, as research by Nursery World and the Resolution Foundation found recently. However, there is no getting away from the fact that this policy is chronically underfunded. No matter which way we look at it, providers are going to pay the price. The sector is known for its quality and passion—it transforms young people’s lives—and if the Government put that in peril with this policy, I suspect that they will not be forgiven lightly. As the Minister is well aware, tens of childcare providers are in this Chamber who would like to hear his views. Will he rethink his offer to come and meet them, as he originally intended?

[Andrew Rosindell (in the Chair)]

Does the hon. Member for High Peak wish to exercise a short right of reply at the end?

[Ruth George]

Yes, if there is time.