Nurseries and Early Years Settings

David Simmonds Excerpts

Thursday 3rd December 2020 Westminster Hall

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

It is a pleasure to serve under your chairmanship, Mr Hollobone, and I reiterate the congratulations to my hon. Friend the Member for Winchester (Steve Brine) on bringing this important topic to Westminster Hall this afternoon.

I declare an interest, as a father of two young children who were at nursery throughout the previous lockdown. I would like to pay a personal tribute, and one on behalf of many other mums and dads in my constituency, to the early years teams at Hillingdon and Harrow Councils, and particularly to Hillingdon, which not only kept my children’s nursery open but ensured that other mums and dads, whose children’s nurseries closed their doors during the lockdown, were able to access childcare as key workers during that period.

The research clearly demonstrates that the money that we spend on a child during childhood gains the most value when it is spent in the early years, but that is not where most of that funding is distributed. When we look at the way in which we fund different parts of a child’s journey through life, we see that most of the money goes into secondary education and relatively less is spent early on.

I would like to focus my brief contribution today on three aspects of this challenge that it is important to get right if we are to bring about sustained change. The first aspect is about looking at the market as it is. Many hon. Members have made the powerful point that without effective early years provision, our economy is held back. The Government should be proud of the work that has been done with tax-free childcare—an enormously successful policy, appreciated by many working parents—but also the funded hours. However, as we go into a debate that is very much focused on funding gaps in the early years, we also need sometimes to challenge the behaviour of some providers.

It has caused great concern in the sector in my constituency that some nursery providers made much of the fact that they were closing their doors, taking furlough money for the staff who were placed on furlough during that period, taking the full entitlement of payment from the local authority for the funded hours, telling parents that unless they paid the full fees, there would be no place for their child when the nursery eventually reopened, and quite proudly telling other nursery providers that that meant that when those providers went out of business, they would be able to take over their premises and behave in a predatory commercial way afterwards. Therefore, although much good work has been done in the sector, I think that we also need to be prepared sometimes to challenge the behaviour of some providers, whose actions have not reflected the wider move of trying to get behind communities, parents and key workers at this difficult time.

My second point, which builds on what my hon. Friend the Member for Winchester said, is about the complexity of the sector. For the early years we have children’s centres, which are not childcare venues but which are a provider of key services for that time of life. We have nurseries; we have nursery schools. We have, of course, childminders, who are a significant part of many children’s journey through the early years. All of them, in my view, need to be seen as part of that bigger picture of the support around a child and their family. We know that, when we look at attachment, when we look at intergenerational relationships, when we look at a child’s start in life, all those things need to be taken into account. Although it is right that we are hearing the voices of providers of settings such as nurseries, it is also important to recognise that childminders are a crucial part of the picture, and they too need the skills, the ability and the capacity to support children and be part of the market response.

The final point, and the most important one, is the need for our country to have a longer term plan for the early years. A lot of the political debate has been focused on funding. Those with long memories will recall the neighbourhood nurseries initiative, which was started in 2004 and axed in 2007, to much national angst. There has been a pattern of frequent changes in the Government’s response.

We can see the numbers of children coming through the system. We know when there is a baby boom that we need to plan ahead, and we know that when the demographics go the other way we may need to reduce capacity in the system. A number of hon. Members have mentioned the need for effective workforce planning. I invite Ministers, building on work that I know is already done, to set out what that long-term plan is beginning to look like, so the children of this country, particularly in the early years, have some certainty over the medium to long term.

--- Later in debate ---

[Tulip Siddiq]

I absolutely agree with my hon. Friend, and I have seen exactly what she is describing at first hand in my son’s nursery.

I am also worried that nurseries with rateable values of over £15,000 were not allowed to access the larger covid grants for retail hospitality or leisure businesses. I hope the Minister will look into that. The Chancellor agreed to give nurseries business rates relief only after intense lobbying from all sides, but, sadly, that support is due to come to an end in April next year, and maintained nursery schools, which have been mentioned repeatedly in this debate, are not able to access it. Many part-time or recently started childminders have been excluded from help through the self-employment income support scheme, and the early years providers did not qualify for the £1 billion covid catch-up funding. Last week, they were excluded from the covid workforce fund to help with the cost of staff absences, despite huge staff pressures.

In essence, throughout this crisis, early years providers have been asked to take on the responsibilities of schools but the liabilities of businesses, and with nowhere near the same level of financial support that has been given to other businesses. Of course I welcome the £44 million increase in new childcare funding in the spending review, but I do not feel it is enough to plug the gap, which stood at £662 million last year. It will only come in April, by which time many providers will certainly have closed. A chain of three nurseries in Essex I spoke to recently spent £6.10 per hour providing a Government-funded childcare place, yet only got £4.32 per hour from the Government to do so, so the 6p per hour increase to funding in the spending review is a drop in the ocean.

I want to work constructively with the Government because the early years sector is important. I also give credit where it is due. One positive step was the Government’s commitment to funding providers at pre-covid occupancy levels, both when they were forced to closed to most children from March to June, and in the autumn term when it was clear that childcare demand would be suppressed by fear of covid, furlough, job losses and working from home. That prediction was correct: occupancy in early years settings is currently just above 60% of normal term-time levels. However, although there is no reason to think demand will not continue to be low for some time, the Government are planning to go back to funding providers based on current occupancy from January. I realise it may sound like a technical point, but that will be devastating for over a quarter of providers, according to a recent survey by the Early Years Alliance.

One could argue that that made sense when the Chancellor was planning to withdraw the furlough scheme and get everyone back to work from October, but it does not make sense to extend the furlough and impose lockdown and severe restrictions while pretending that everything is back to normal for childcare, just because the Government do not want to foot the bill. I ask the Minster to take heed of this. It is hard to estimate the overall impact on the sector, but to take the example of the small nursery chain in Essex I mentioned, the owner estimates that the chain would have lost £12,000 of income this autumn term if funding was based on the current, reduced occupancy, and expects the shortfall to be much bigger in the spring term when funding is set to be calculated as the Government intend.

Mass closure of childcare settings would be devastating for over 300,00 people working in early years, the majority of them women, which is a point already made by hon. Members. Childcare workers are paid badly anyway—I am sure people are aware of that—with one in eight receiving less than £5 an hour. We should be working to tackle low pay and improve career progression in the sector. We have duty to make sure we do not bring about the demise of these jobs by slashing funding.

To remind everyone, this debate is about the future of nurseries and early years settings. The reality is that without better support, and a new approach, thousands of them may not have a future at all. Most hon. Members have made that point today. Survey after survey shows that the early years sector is on the brink of collapse. One in six providers expect to close by Christmas, rising to one in four in the most deprived areas. Recent research from the Department for Education shows around half of all nurseries, pre-schools and childminders were unlikely to be sustainable for more than a year. These are shocking statistics, and I hope the Minister will take account of this. There has been a net loss of 14,000 childcare providers in the last five years as a result of the chronic underfunding of early years entitlements. We could lose at least that many again within this year if fears are not allayed, and action is not taken immediately. I ask the Minister to consider how devastating this would be for working families who rely on childcare, and the young children whose life chances are shaped by the power of early education—that point has been made over and over again—not to mention the impact on our economy and recovery if working parents are forced to stay at home. The brilliant early years workforce will suffer large-scale redundancies.

[David Simmonds]

It is a technical point, rather than a political one, but does the hon. Lady agree that one of the ways that we could address this challenge is by taking the funding cycle through which early years receives its resources out of the same funding cycle where it sits with schools, as there is always a powerful incentive for schools forums to ensure that resources are underspent, in order that they may be redistributed to other causes in the local area? Instead, we should have a much more flexible, local and sustainable means of directing the same money, so that these issues can be addressed.

[Tulip Siddiq]

I agree with the hon. Member that we should have a flexible funding settlement, but I also think that we need to change our approach and attitude to early years settings, because we often see them as looking after children but not quite providing education. It is as much a cultural and attitudinal change as it is a funding change, so I somewhat agree with the hon. Member. We now have an opportunity to look at the childcare sector in this country as a whole, because the pandemic has shone such a bright light on the very big failures in the childcare system due to the lack of funding and the rules around early years settings, and also because they do not qualify for funding in the same way that schools do. I agree with him—that is what I am trying to say, in a very long-winded way.

I will end with a plea to the Government: please do not ignore the cries for help from a sector as important as early years. I urge the Minister, who I said has an open-door policy when it comes to discussions and constructive criticism, to rethink the plan to slash early entitlement funding from January—that is very soon—to give the early years sector the targeted support that it so badly needs, and to commit to working across the House to give our fantastic nurseries, pre-schools and childminders a sustainable future. I really feel that early years providers are an essential part of the social and economic fabric of our country. Therefore, to coin a phrase, let us build back better from the pandemic, rather than let this vital infrastructure come tumbling down when we need it most.