Nurseries and Early Years Settings

Debate between David Simmonds and Tulip Siddiq

Thursday 3rd December 2020 Westminster Hall

[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.