Childcare Payments Bill

Earl of Listowel Excerpts

Tuesday 9th December 2014 Lords Chamber

[The Earl of Listowel (CB)]

My Lords, as treasurer of the parliamentary group for children I warmly welcome the Minister’s presentation of the Bill and, indeed, the contents of the Bill. The subsidy will be an improvement on the existing voucher scheme, and the extra support for parents is very welcome.

The Minister made the case for this change. I was reminded of it recently by listening to Professor Melhuish of Birkbeck College, University of London. He presented strong evidence that high-quality early years care improves the educational outcomes of young people. Even if a child has a poor primary school, if they have had high-quality early years education then they are still likely to be doing well at the age of 11, and there will still be a significant difference in educational outcomes to the age of 16. Such provision is therefore very important.

I also thank the Minister for the investment that the coalition Government have been making in this area. He described in detail what has been achieved. I was grateful to the coalition Government for reconsidering their proposals on the ratios of early years educators to children. The Minister at the time raised the important point that as we invest a great deal in early years care in this country, although it is more costly here than it is in many other nations, how can we ensure that we get best bang for the buck in terms of taxpayers’ money? I hope there will be an opportunity after the election of a thorough strategic review of early years provision to look at why we are where we are.

I welcome what the Minister said about stimulating the supply side, which is so important, and the measures that are being taken, but perhaps more could be done to stimulate it. In particular, it struck me how important nurseries attached to schools are. It is important that there is a lower turnover in staff in nurseries than there is in much other provision. In high-quality provision it is crucial to have staff who can build relationships with children and parents. Of course, the staff in such provision are generally more highly qualified than in other provision. We must address the low pay that dominates this area. It is very disappointing that we invest so much yet many of the people who do this really important work are so poorly paid.

I welcome the Bill. There are a couple of issues on which I would like help from the Minister. I shall try to be as brief as I can so I shall curtail what I might have said. The first issue is that the scheme will not address the additional childcare challenges and costs faced by families with disabled children. The Minister may have made a remark on that and I missed it. The recent independent parliamentary inquiry into childcare for disabled children found that parents with disabled children face significant extra challenges finding and paying for childcare. A survey of parents was undertaken to support the inquiry. More than 1,000 parents with a disabled child responded, and 38% reported paying £11 to £20 an hour for childcare, with a further 5% paying an astonishing £20 an hour. This is in stark contrast to the £3.50 to £4.50 paid by the parents of children who are not disabled. Three-quarters of the parents who responded to the inquiry also said that they had been forced to cut back or give up work entirely because they could not access affordable childcare which was appropriate and met the needs of their child.

Although the tax-free childcare scheme will provide some additional support, the inquiry highlighted the limitations of the scheme for families with disabled children. I understand that the Government are looking at ways in which they can better support parents with disabled children through the scheme by raising the maximum cap for such families above £10,000. This would be helpful for a small number of parents with very high costs, but most of the families affected would not be helped by this step because very few families can afford to spend that amount on childcare.

A better option is to raise the amount of the top-up from 20% for such parents. I am grateful to the Family and Childcare Trust for its briefing in my preparation for this Bill. It has estimated that increasing the top-up to 40% for children who receive disability living allowance would cost just £25 million each year. The Government will spend more than £750 million each year on the new scheme. Surely £25 million is an affordable figure in the light of the help that this step will provide for parents with disabled children. Does the Minister agree?

The inquiry also heard that out-of-school activities were a key means of social inclusion for disabled children and young people. As the tax-free childcare legislation covers costs only for childcare used to enable parents to work, it is regrettable that in its current guise it will not help many families pay for such childcare. In the long term we must create a level playing field in childcare for disabled children. There are a number of schemes run by local authorities that support childcare providers to offer places to children with additional needs through training, specialist support and adaptation, and subsidise the difference between the typical fee and the actual cost of care for a disabled child. It is heartening to hear about parents who have struggled and looked through many areas and finally found a place for their child. However, such cases are rare. Funding constraints mean that such schemes are rare. The most effective way in which the Government can support disabled children to access affordable childcare is to learn from the successful approaches developed by local authorities and scale up those schemes nationally.

The second area to which I would like the Minister to give his attention is the tax-free childcare scheme. This scheme must work alongside the childcare element of tax credits and, for a time, the employer-supported childcare voucher scheme that is being phased out. Families will not be able to claim childcare support under tax credits and tax-free childcare at the same time. Many families will find it difficult to identify which childcare support is best for them and will potentially miss out on much needed financial support. The Minister referred to the sort of support that these families can have in his opening remarks.

The Government estimate that at least one in 10 families claiming the childcare element of tax credits will be better off claiming support under the new scheme. As a result, it is very likely that there will be substantial movement between the two schemes. Many parents, particularly those with fluctuating incomes and uncertain working hours, such as those who are self-employed, work overtime or have a zero-hours contract, will find the sheer complexity of the schemes difficult to navigate, potentially leading to the loss of greatly needed financial support.

The Government need to make sure that families are transferred smoothly between each childcare scheme, with a full information campaign and an online childcare support calculator—which I think the Minister was describing—to help the parents affected make the right choice. From my own experience of joining health visitors in meeting with vulnerable mothers and parents I know just how important reliable and clear guidance can be to these families. I therefore hope that the Government will support professionals working in early years, children’s centres and family information services to play their part in guiding parents through the different options for childcare support, as they are ideally placed to offer advice to families from all walks of life.

Finally, I wonder if I could invite the Minister to join me on a visit to a children’s centre—a nursery in Newham with a very good reputation—that I will be making on the morning of Friday 9 January. I am sure that he would be very welcome to join me if he were able to make the time available. I look forward to the Minister’s response.