Children: Affordable Childcare

Baroness Tyler of Enfield Excerpts

Thursday 9th January 2014 Lords Chamber

[Baroness Tyler of Enfield (LD)]

My Lords, I, too, congratulate the noble Baroness, Lady Massey, on securing this very welcome and timely debate. The issue of affordable childcare is so important that it is high time we addressed it directly in your Lordships’ House.

Affordable childcare is central to the current cost of living debate and concern about living standards. According to a Joseph Rowntree Foundation report, the cost of childcare has risen by 37% since 2008, more than double the rate of inflation, and at a time when real wages have been stagnant or falling. In short, any attempt to alleviate the pressure on family budgets will be incomplete if it fails to offer credible solutions to the current lack of affordable childcare.

Last year I had the privilege of chairing a Liberal Democrat policy working group that looked at the problems of people on low to middle incomes who try to juggle work and family responsibilities. The report we produced, A Balanced Working Life, looked in particular at childcare and benefited hugely from the experience of my noble friend Lady Walmsley. We sought to emphasise in our report not just the financial burden of expensive childcare and its impact on household budgets but its implications for the participation of women in the jobs market, child development and social mobility. I want to emphasise today the importance of looking at childcare in the round.

The loss of female employment after childbirth due to the current lack of flexible and affordable childcare is a serious loss of skills to the economy. Of course, some mothers choose to stay at home and look after their children, and that must always be a matter of individual choice based on their own circumstances. However, some people are denied that choice because the childcare simply is not there.

It is worth noting that the Institute for Fiscal Studies has shown female employment to be the key driver for increased income among low to middle-income families in the past 50 years. Not only is the lack of affordable childcare a limit on women’s job prospects and professional development, it can also leave some women in a more vulnerable situation if they find that they are unable to support themselves; for example, if a relationship breaks down or a partner dies. It does not have to be this way. Findings from the OECD show that employment among women with children is eight percentage points lower in the UK than in the top five performers in the OECD. If our competitors can establish policies that enable women to return to work, surely we can, too.

From a social mobility perspective, the importance of early years is unequivocal. We have heard many times in debates in this Chamber that, by the age of three, large disparities in child development have already become apparent between children from low-income backgrounds and their relatively wealthier peers, with these gaps widening further over time. If we are serious about ensuring that children from disadvantaged backgrounds reach their potential, guaranteeing access to high-quality and affordable childcare from a young age is the place to start.

The A Balanced Working Life report, to which I referred earlier, set four criteria against which we should judge the childcare market and how effectively it is working: affordability; quality; convenience and flexibility; and the adequacy of provision. Looking at the evidence, the childcare market does not stand up particularly well on any of these counts.

Let us take affordability, which is our prime concern today, and imagine that we are the parent of a one year-old child who has returned to work, five days a week, from 8 am to 6 pm, from financial necessity, just to help make ends meet. The 50 hours of childcare you require per week will set you back on average £11,000 per year, or £14,000 if you live in London. The burden is not eased once you child reaches school age. If your job requires working longer hours and your child attends a daily after-school club, you could be faced with a weekly bill of almost £50.

It is no surprise that two-thirds of parents say that the cost and inflexible nature of childcare has meant that they have been unable either to take up a job or to work longer hours. Once again, as we heard from the noble Baroness, Lady Jenkin, the comparisons with the rest of the OECD are unfavourable. The average British family spends 27% of their earnings on childcare, which is higher than every OECD nation, bar Switzerland.

I mention briefly a point made eloquently by the noble Baroness, Lady Massey: the position facing parents of disabled children who look for affordable, high-quality childcare. Even when that childcare is available, and in many places it is not, it is often available only at a substantial premium. A survey by Working Families found that around 13% of respondents were paying more than £10 per hour for childcare for their disabled child. With the huge personal toll that providing such intensive care takes on individuals and family life, the need for affordable, reliable care is acute.

On convenience and flexibility, it is clear that, for many parents, the availability of childcare is simply not compatible with their working hours. This is particularly pronounced for parents working atypical hours. Just 9% of local authorities in England reported having sufficient places for these children. More generally, with the typical school day finishing at 3 pm, the question of who will care for school-age children becomes particularly pronounced.

I have spent some time describing the challenges that we face, because I think it is important to be clear about the nature of the issue, but I want to finish by focusing on some of the good things that are already happening and what I would like to see happen in the future. I should like to highlight the community childcare hub model developed by the charity 4Children and currently being piloted in nine locations, with very welcome funding from government. The purpose of these hubs is to integrate local childcare services, increasing their accessibility. Whereas formerly parents have had to plan and co-ordinate their own childcare, working around fixed opening times and making independent arrangements with childminders to cover irregular working patterns, hubs bring together the full range of childcare options, including nurseries, childminders and after-school clubs. Working with the hub, parents are able to establish a complete, co-ordinated pattern of care for their children, and change that when their family or working hours change. Early feedback from these pilots is encouraging; they provide a promising model for shaping and co-ordinating the local childcare market.

I am proud that Liberal Democrats have given the issue of childcare real priority in difficult economic times. Thanks to Liberal Democrat policies, implemented through the coalition Government, three and four year-olds are now entitled to 15 free hours at Ofsted-inspected early-years settings which offer the early years foundation stage. Moreover, that entitlement has already been extended to 20% of two year-olds from the most deprived backgrounds, rising to 40% as of September.

Our A Balanced Working Life report focuses on ways of reducing the cost of childcare by building on that free entitlement, which I think is at the very heart of the matter. I am pleased to say that its recommendations were adopted as party policy at our party conference last September. Therefore, as a party we are committed, as resources allow, to increasing the free childcare entitlement on a stepped basis to: 10 hours per week for all babies between the ages of one and two; 15 hours for all two year-olds; 20 hours for children between three and four; and 25 hours for four to five year-olds.

I believe that those additional hours should be targeted at those families whose joint household income is below £100,000 per year. It is worth noting that that very small provision of 10 hours of free childcare for one to two year-olds will not only help mothers to keep in touch with the jobs market, which is crucial, but provide a bridge, which does not currently exist, between parental leave and the current free entitlement for two year-olds.

Speaking in a personal capacity, I hope that such policies will feature prominently in all party manifestos, including my own, as we move to the next election, but of course mine will not be the final voice on the issue. I simply end by saying that I observe, and note with much interest, the parallels between the Liberal Democrat party policies that I have just described and those that the Labour Party announced in late September, which also aim to extend free childcare for three to four year-olds from 15 hours to 25 hours. Perhaps a cross-party consensus is about to emerge—who knows?