Children: Affordable Childcare

Baroness Massey of Darwen Excerpts

Thursday 9th January 2014 Lords Chamber

Moved by

[Baroness Massey of Darwen]

That this House takes note of the case for increasing access to affordable childcare.

[Baroness Massey of Darwen (Lab)]

My Lords, I am very pleased to have secured this important and timely debate and am delighted to see so many speakers here today with a variety of expertise and experience. I thank colleagues from the Library for their excellent briefing and those in the voluntary sector who work tirelessly on behalf of families and children. I hope that we can deliver a wake-up call today not just to this Government but also to future Governments. Like many other issues, this should not be a party-political issue—it is too important for families. I believe that with the issue of affordable childcare, we have a situation that is out of hand.

Healthy child development should surely be at the heart of this discussion. It is an issue that often gets lost, yet research is clear about what children need to thrive—security, attention to physical, emotional and intellectual needs, and love. The long-term impact of early years care is well known. In today’s world, parents may be caught in the conflicts of what is best for their child. The situation has certainly changed from when I had young children, where it was usual for one parent—usually the mother—to be at home looking after the child or children until they went to school. I was fortunate in being able to do and enjoy that. Some women said that they were better mothers for having their children looked after by others for at least part of the day and being able to work.

Pressures on my—our—children’s generation are different and more complex. The pressures of the cost of living, the workplace environment and taking time out have increased, even though maternal and paternal leave after birth has thankfully improved. Parents want an alternative to the family situation where their child or children will be well looked after. As I and I am sure others have seen, most parents go to great lengths, whatever the cost, to decide what that care will be, whether it is with a childminder, including a relative, a nursery—either private or local authority—or other arrangements. I know many young parents feel guilty about this but for many reasons childcare has to be the way forward for them. How does that work out? Is high-quality childcare affordable? Governments—any Governments—need to ensure that parents have affordable, high-quality choices about what happens to their children at a key stage of life.

Some facts are clear. Since the last election, the cost of nursery places has risen by 30%—five times faster than pay. The average cost for a part-time nursery place of 25 hours a week has gone up to £107. There are 576 fewer Sure Start centres with three lost every week. There are 35,000 fewer childcare places. The Government offer of childcare for disadvantaged two year-olds is struggling because one in three councils do not have enough places. Some 60% of local authorities in England have sufficient childcare for working parents and in 36% of local authorities parents have reported lack of childcare to their family information service. Only 30% of English local authorities—16% in Wales—can provide sufficient holiday care for working parents, despite the obligation to do so under the Childcare Act 2006. Six local authorities report an average cost of holiday childcare exceeding £175—the maximum amount of help that a parent on low income can claim through working tax credit support for childcare costs, leaving many parents out of pocket.

Some 91% of nursery care, 94% of sessional and pre-school care, and 67% of after-school care is delivered by the private and not-for-profit sector. It has been estimated that 7% of childcare costs in group settings is due to rent or mortgage costs. A parent buying 50 hours of childcare per week for a child under two now faces an annual bill of almost £11,000 per year—£14,000 in London. Many colleagues will know such parents and how they struggle to make ends meet.

The Every Disabled Child Matters coalition is concerned that access to high-quality, affordable childcare is seriously problematic for these parents. The cost of childcare for a disabled child is prohibitive and discourages or prevents parents of these children from working. Policy developments are failing to recognise this.

Since 2007-08, local authorities in England and Wales have been required to carry out childcare sufficiency assessments and identify gaps in the provision of childcare. In 2010, only 23% of local authorities said that they had sufficient childcare for disabled children. By 2013, the situation was worse with only 14% of local authorities reporting sufficient provision.

Where childcare is available for disabled children, it is costly. Thirteen per cent of respondents to a survey by Working Families stated that they were paying £10 an hour more for childcare for a disabled child, and 66% complained of extra costs. In addition to costs, parents of disabled children are also concerned that the care for their child should be of good quality—a very significant issue. As Every Disabled Child Matters states:

“It is vital that we remind ourselves that childcare is not only about enabling parents to work but ensuring that children benefit from it.

Recently, Ed Miliband has set out plans to extend free childcare for three and four year-olds from 15 to 25 hours a week for working parents, funded by an increase in the bank levy, and to increase the legal guarantee of access to wraparound care from 8 am to 6 pm in primary schools. He has said that parents are facing a childcare crunch as they seek to balance work and family life. Does the Minister agree?

A Resolution Foundation report has acknowledged that the Government announced in the Budget last year that they will spend an extra £1 billion per year on two types of childcare support: 600,000 working families eligible for universal credit will potentially be eligible for extra childcare support from 2016, and 2.5 million higher income families not eligible for universal credit will be able to claim tax-free childcare through a new system of vouchers worth up to £1,200 a year per child. A higher level of childcare support is welcome for those families on universal credit who will be eligible for more help. However, the proposed extra support will not benefit the majority of families with children, particularly those on low wages, who struggle most with the increasing cost of childcare. Low-paid second earners who work part time will be worse off if they increase their hours than if they did not work at all.

The Joseph Rowntree Foundation highlighted late last year that more than half of families living in poverty are in work. The cost of childcare is a significant contributor to their problems, particularly due to the way that income support works, with a taper sharply reducing support as parents enter work and childcare costs increase. Sadly, the report concludes that parents are no happier with their work-life balance and attitudes to family-friendly working appear to have gone backwards among employers during the recession.

At a recent conference of the Family and Childcare Trust, issues of childcare were discussed in depth and many questions asked. The keynote address states that it must be remembered that only one-third of children attending formal childcare are aged three or four and therefore qualify for the universal element of the free early education offer. Although the number of childcare places has risen, parents still have difficulty finding affordable childcare at the times they need it. More staff are qualified, but childcare is still a low-wage profession and the annual turnover of staff is three times the average of that of a good school. That will clearly impact on quality and availability. Quality of staff in early years settings and recognition of the profession’s impact and importance is an issue that has often been raised in your Lordships’ House and needs to be an ongoing concern.

I turn to some of the responses to the issue of affordable childcare. Many professionals in the field of child and family welfare have raised several key points. First, childcare is a fragmented sector, with the expansion in the private and voluntary sectors. In a fragmented sector, there are challenges in achieving profitability without an impact on quality. There is potential for isolation and there are weak links to quality support.

Secondly, vision, direction and long-term strategy from political parties must not be lost in competing on policy, whether it be from the expansion of the free offer or tax-free childcare. Thirdly, the free offer is at the heart of childcare and hugely popular with parents, but problems remain. Many parents are not in control of when and where they access free childcare. Around 20% of parents are not happy about being able to access a good provider.

The key to affordable success, it has been suggested, lies in a simpler funding system. Multiple funding streams directed separately into a market environment lacking coherence will not achieve high-quality and flexible access for parents. Such a system also leads to administrative deficiencies. Those funding streams must be brought together. The Scandinavian model gives power and funding to local authorities to plan local provision and gives parents legal access to services. Interestingly, the Institute for Public Policy Research has produced an interim report on childcare as a strategic national priority. This report states that a wide-ranging expansion of childcare would pay for itself over time. It estimated that attracting 280,000 mothers back into the workforce would generate an extra £1.5 billion in tax revenues and make savings in benefit payments. We await the final report of the IPPR, which will indicate possible ways forward. I hope that they will be noted by policymakers.

I have tried to show that this is a complex area and needs simplifying. What is clear to me is that the Government do not seem to have policies on long-term strategies which are compatible with providing quality, accessible and affordable childcare for the majority of working parents, particularly those on lower incomes. I hope the Minister will reassure us that this is being thought through with all parents in mind and that we shall see greater clarity, simplification and understanding about the welfare of children and parents.

--- Later in debate ---

[Baroness Massey of Darwen]

My Lords, I thank the Minister for her response. I also thank all noble Lords who have taken part in this debate for their very powerful contributions. It has been such a good debate that for the first time ever my notes are longer than my speech was, but I assure the House that my response will not be as long as my speech.

I have learnt a lot today and had some ideas reinforced. I heard an important concept put forward: an all-party commission on childcare. There is a great deal of consensus between us in this House, as always when we speak about children. I shall not refer to noble Lords by name, but they will know who they are. Speakers on all sides said that all is not well, much has been achieved, but we still have some way to go.

Personal reflection is always very important, and we had it about a 16 month-old child on the hip, a wasp’s mother and wet patches, and my noble friend Lady Prosser spoke about campaigning and organising. We have mentioned key issues which could form the basis for discussion on this large social change. Some of these issues seem to be about how the system can be made simpler and more flexible, coherent and accessible. Let us look at structures, including holiday care. Let us look at spending smartly, as a noble Lord said, and at how we can show that childcare can ultimately pay for itself if it is rightly funded. Let us reinforce what we know about women and employment. Childcare is good for women, families and the economy. Let us look at good practice, not just abroad but in the UK. Let us look at the benefits of early intervention and how it can prevent problems later on. At the same time, let us look at the early years workforce. It is key that childcare must be of the highest possible standard and must benefit children. Let us look at inspection. Let us look at issues about disabled children and childcare. Let us look at in-work poverty. Let us look honestly at social mobility and childcare. That is just for starters. Much work has been done and is being done by all parties on childcare, families and children, but, in thanking the Minister again, I ask her to suggest some cross-party forum way where we can forge and examine these issues realistically and honestly.

Motion agreed.