Child Care

Elizabeth Truss Excerpts

Tuesday 19th November 2013 Commons Chamber

[The Parliamentary Under-Secretary of State for Education (Elizabeth Truss)]

I am afraid that after three years in opposition, Labour Members seem to have learned nothing. First, they have learned nothing about how they got the country into a financial mess, as they seem to think that the answer is more spending and more borrowing; and secondly, they seem to have learned nothing about child care and how nurseries work. Despite the highfalutin’ rhetoric by the hon. Member for Stoke-on-Trent Central (Tristram Hunt), he seems to have failed to grasp the numbers behind child care. I will say more on that in a moment. First, let me remind hon. Members how we got here.

The Labour party left the biggest budget deficit among advanced economies and we were borrowing £1 for every £4 we spent. When we came into office, we were spending £110 million just servicing the interest on Labour’s debt. Despite that terrible inheritance, we have successfully cut the deficit by a third, and prioritised families and children. Total spending on child care and early education is increasing from almost £5 billion to more than £6 billion. We have increased the number of hours of free early education for every three-year-old and four-year-old, from 12.5 hours to 15 hours a week. We have extended support to two-year-olds from low-income families, with 92,000 two-year-olds already benefiting. From 2015, tax free child care worth up to £1,200 per child will be available to working parents. We are providing real help for hard-working families in tough times, not empty promises and unfunded spending commitments from Labour. That is what this coalition is delivering.

[Meg Hillier]

Childminders in my constituency would like to take on more two-year-olds, but the funding provided by the Government does not cover their costs. Does the Minister expect them and other providers to subsidise Government policy?

[Elizabeth Truss]

We are funding the two-year-old offer at an average of £5.09 an hour, and the average rate paid for that age group is £4.23 an hour. We are therefore funding at considerably above the market rate, and we have been very successful at getting places for two-year-olds. [Interruption] It is an average.

Let me now turn to some of the spurious claims made by the hon. Member for Stoke-on-Trent Central. Labour claims that more than 500 children’s centres have closed. That is simply not true. Forty-five centres have closed since 2010—just 1% of the total—and some new centres have opened, including one in Ipswich. Centres are joining networks so that they can be run more efficiently, but the same buildings are open to the same parents to use services. We are seeing a record number of parents and children using children’s centres—more than 1 million. I do not understand why the hon. Gentleman does not want to celebrate the success of children’s centres, rather than constantly talking them down week after week. Children’s centres are doing a better job than ever under this Government. Let us not confuse children’s centres and child care providers. Children’s centres provide less than 1% of child care places.

Labour claims that costs have risen by 30%. That is based on figures from the Family and Childcare Trust. Despite the impression given by the Opposition, those figures were published before 2010. If the Opposition used the pre-2010 data, they would have found that the previous Labour Government were a catastrophe. Between 2002 and 2010, the cost of a nursery place rose by 46%. That is £1,200 a year more for a part-time nursery place for a child over the age of two, but we did not see the hon. Gentleman jumping around then, did we? Labour has, not for the first time, been cherry-picking statistics and ignoring the research. On 30 September 2013, Laing and Buisson published an in-depth report on the child care nurseries market in the UK. The report said that 2012-13 was the second successive year in which the price of full-day care in nurseries had been flat in real terms. In 2012-13, average nursery fees rose by 2.6%, which was the same as inflation. In 2011-12, average fees rose by 2.7%, compared with 3% inflation. In June 2013, the National Day Nurseries Association published the UK nursery insight report, which said: “58% were freezing fees”.

There we have it: the figures Labour cite actually show how the previous Government drove up costs with their confused funding and complex regulation, while independent research shows that costs have stabilised under this Government.

[Fiona Mactaggart (Slough) (Lab)]

The Minister referred to the child care survey on increasing costs and pointed out that between 2002 and 2010 there had been an increase of 46% in a period when wages were rising. The same survey shows that the present increase from the baseline is 77%, at a time when wages have fallen. Should she not take some responsibility for taking a bigger bite out of the family budget?

[Elizabeth Truss]

That 77% starts in 2003, and I believe that the Labour party was in government then.

The hon. Member for Stoke-on-Trent Central claims that we are not supporting school-based child care. On the contrary, the most recent data show a 5% increase in the number of after-school clubs. The difference between our view and his is that we think that school-based child care actually takes place in a school. The Labour party alleges that more than 90% of schools were offering an extended day in 2010, but I do not think that any parents with schoolchildren at that time would recognise that number. A school did not have to provide child care onsite, but could fulfil the requirement by linking to a child care provider on its website. That is what the Labour party meant by “extended day”.

It turns out that the Opposition’s new offer is no different. The shadow child care Minister, the hon. Member for Manchester Central (Lucy Powell), wrote recently that

“if a school chooses not to stay open longer hours because they do not need to offer this provision on site – they will not be forced to stay open. Schools can…facilitate out of hours childcare elsewhere for pupils”.

The shadow Secretary of State has a vision of children playing sport after school, but this after-school provision would not have to be on the school site and would be paid for by parents. How is that different from the current situation, where people pay a childminder after school? I am not sure how Labour’s so-called primary school guarantee, which need not take place in school, which schools would simply facilitate and which parents would pay for, would be any different from the current situation. It is a child care mirage: the closer one walks to it, the less certain it seems.

[Several hon. Members]

rose—

[Elizabeth Truss]

I give way to my hon. Friend the Member for Hexham (Guy Opperman).

[Guy Opperman (Hexham) (Con)]

I am most grateful to my hon. Friend for giving way to me and not to honorable colleagues on the Opposition Benches.

On the expansion of provision, does my hon. Friend welcome the fact that 73% of the children’s centres in the north-east are rated as either good or outstanding? More importantly, what opportunities will they have to expand that provision in the future?

[Elizabeth Truss]

I thank my hon. Friend for his point about children’s centres, which have been a massive success under this Government. Record numbers of parents are using them, we have improved them by focusing them on outcomes and they are really achieving.

[Lucy Powell (Manchester Central) (Lab/Co-op)]

You’re having a laugh.

--- Later in debate ---

[Elizabeth Truss]

I think the hon. Lady is having a laugh about her child care guarantee. It would not mean that schools have to offer extended hours; they would need only link to a child care provider on a website. That is not what parents mean by extended hours.

I note that the hon. Member for Stoke-on-Trent Central did not repeat his leader’s claim about the number of child care places. Could that be because his leader claimed there were only 1.3 million child care places in the country, when in fact there were more than 2 million, because they missed out the 800,000 places—30% of the market—available in schools? The number of settings is going up. It is strange, given that he has talked about his colleague Baroness Morgan advocating child care for two-year-olds in schools, that he does not know that schools provide child care and that his leader did not include those 800,000 places in his statistics. He also seems completely unaware that Building Schools for the Future was not for primary schools, but for secondary schools. Under his Government, funding for primary school places was cut by one quarter.

[Mr Sheerman]

Within the limits of this sort of debate, the hon. Lady is not making a bad speech, but many ordinary people and parents outside desperately want even better child care and are hanging on her words. What will the Government do to move to the next stage?

[Elizabeth Truss]

I will come to that point later, but first I need to correct some factual inaccuracies that the leader—sorry, I mean the shadow Education Secretary; I am promoting him already—made.

The Labour party claims it will fund extra child care places for three and four-year-olds through the bank levy. I think we have heard that somewhere before. To be precise, we have heard it 11 times before, because it is to be spent on: the youth jobs guarantee, which will cost £1.04 billion; reversing the VAT increase, £12.75 billion; more capital spending, £5.8 billion; reversing the child benefit savings, £3.1 billion; more regional growth fund spending, £200 million; reversing tax credit savings, £5.8 billion; cutting the deficit, no amount is specified; turning empty shops into community centres, £5 million; spending on public services, question mark; more housing, £1.2 billion; and now child care, £800 million.

[Tristram Hunt]

rose—

[Elizabeth Truss]

The hon. Gentleman had plenty of opportunity to make his point and I am keen to answer the question from the hon. Member for Huddersfield (Mr Sheerman) about what the Government are doing.

Let us not forget what Labour said about the bank levy when we introduced it. The right hon. Member for Edinburgh South West (Mr Darling) said:

“This is an industry though that employs over a million in this country and it is taking a hell of a risk, the Tory approach, in saying well actually they seem to be slightly indifferent to that… I think, frankly, the Tory approach is pretty misguided, it’s not thought out”.

So Labour has gone from being against the bank levy to spending it 11 times. How do those numbers make sense?

[Several hon. Members]

rose—

[Elizabeth Truss]

I am sorry, but I want to talk about child care.

As well as complete economic ineptitude, Labour seems to have learnt nothing from its time in office about child care or nurseries. It still thinks the answer is spending more money, rather than reform. Baroness Hughes, children’s Minister under the previous Government, admitted that their approach was “probably wrong.” She said:

“We were so keen to stimulate demand from parents but in retrospect that was such a mammoth task. We ought to have focused on the supply side, supporting providers, then we could have done more and quicker.”

I could not agree more, yet Labour has nothing to say about supply; it talks only about spending more money. Let us remember what happened last time it did that. We ended up with some of the highest child care costs in the OECD, parents were paying out 27% of their income on child care, staff had some of the lowest salaries in Europe, contrary to what the shadow Secretary of State said, and under Labour’s preferred measure, prices increased by 50% during the Labour years.

[Andrew Gwynne]

Reports suggest that the Government will not meet their own target of supplying child care places to the 40% most deprived two-year-olds in the country, so will the Minister be open and transparent with the House? Will she meet that target—yes or no?

[Elizabeth Truss]

We have more than 200,000 full-time places available in our system, and we have said that all those eligible children will have places if their parents want to take them up.

[Andrew Gwynne]

What about the target?

[Elizabeth Truss]

I have just answered the hon. Gentleman’s question.

I was talking about why Labour made such a mess of child care. It piled red tape on schools and nurseries, making it harder for them to expand. Furthermore, even though parents like flexible, affordable, home-based care, the number of childminders halved under Labour, because of the level of regulation, the difficulty of becoming a childminder and the fact that the funding system was skewed towards nurseries and away from childminders.

[Annette Brooke (Mid Dorset and North Poole) (LD)]

I often challenged the previous Government on the collapse in the number of childminders, and I would be interested to hear what innovative ideas the Minister has for expanding this important child care provision.

[Elizabeth Truss]

I thank my hon. Friend for her points and I note her consistent support for home-based child care and the important help it can offer.

[Meg Hillier]

Childminders in my constituency are very pro what they do and also pro the fact that they provide good-quality child care. They tell me that the bad childminders were run out of town so that parents such as me can rely on a childminder to look after their children, as I do for my daughter, and be sure that there are good-quality, properly inspected childminders. That puts my mind at rest as a working mum, as it does those of other working mums in my constituency.

--- Later in debate ---

[Elizabeth Truss]

I thank the hon. Lady for her points. I will deal specifically with childminders later and I will respond to her point then.

Labour also had a voucher scheme, but only one fifth of parents could use it—only those whose employers offered it, and only those who were in employment rather than self-employed. There was no limit on income, unlike tax-free child care, so millionaires got it, but the self-employed did not. That was Labour’s legacy on child care—a massive waste of money, added complexity and a huge spreading of confusion.

[Harriett Baldwin (West Worcestershire) (Con)]

It was even more unhelpful than that, as my employer offered the child care voucher scheme, but because it was so tightly regulated, even though I was spending a fortune on child care, I was not able to use it.

[Elizabeth Truss]

I thank my hon. Friend for that point, which illustrates the problem with the child care voucher system.

Let me further point out to Labour Members that in the ’80s and ’90s, when we had a working mother in charge of our country, England was ahead in respect of maternal employment, but we fell behind other countries such as France and Germany under Labour’s watch. Maternal employment rates are rapidly rising under this Government. As Edmund Burke pointed out—the shadow Education Secretary is clearly a big fan—“those who don’t know history are doomed to repeat it”, and if he has not learnt the lessons that people in the previous Labour Government learnt at the time, he will fail, should he ever get the opportunity to be in office. That is why we are reforming the child care system: we are reforming the hopeless legacy that Labour left.

The signs are that what we are doing is working. We are seeing prices stabilising, more places being made available in school nurseries and a revival in childminding. We want parents to have a good choice of options, including nurseries, schools, childminders and children staying at home with parents, or a combination of those. We are introducing much simpler funding and creating a regulatory structure to support modern working parents.

We are determined to reverse the decline in the number of childminders. From this September, good and outstanding childminders will be able automatically to access funding for early education places for two, three and four-year-olds. That means that an additional 28,000 childminders will automatically be funded. I think that addresses the point raised by the hon. Member for Hackney South and Shoreditch (Meg Hillier) about ensuring high-quality childminding.

[Lucy Powell]

Perhaps the hon. Lady will explain why there are 2,423 fewer childminders than there were in 2009.

[Elizabeth Truss]

That is a continuation of the fall in the number of childminders under Labour. We have reversed the policy, starting this September, and the Department for Education is already getting a lot of positive calls from childminders who are keen to offer early education places. There is a great deal of support for that; it helps parents to combine their child care and early education requirements. From this September, we are trialling childminder agencies, which will enable more childminders to join the profession, and they will be fully up and running in September 2014. They will provide training and support, and will be an easy way for parents to access home-based care. We are at the beginning of making significant changes to the way childminders are regarded in our system. What we want to see is an increase in independent childminders and more agency childminders, as well.

We want to expand the level of school-based care, too. As opposed to Labour’s child care mirage, we are allowing real schools to offer real facilities. We are encouraging schools to use their nursery facilities to offer full-time day care rather than just be open for part of the day. We are allowing schools automatically to register two-year-olds, and I saw some brilliant provision for two-year-olds at the Oasis school in Hadley, which opened in January.

We are seeing 8-to-6 schools blossoming. The Norwich free school has a squirrels club, which means it is open from 8 am to 6 pm, 51 weeks a year. I know that the shadow Education Secretary thinks that free schools are a “dangerous ideological experiment”, but I think schools like the Norwich free school are giving hard-working parents the support that they need.

Another example is the Harris chain of academies, which has promised that every new school it opens will operate on an 8-to-6 basis. I am hugely in favour of 8-to-6 provision. It supports working families and helps to increase children’s attainment, but we must do that in a way that is realistic and sustainable for schools. That means making the necessary regulatory changes, aligning the requirements after the school day from within the school day and making it easier for schools to collaborate with outside providers. We do not get anywhere by making false promises that cannot be realised. We are also reforming child care funding so that parents see more of their money, rather than see it wasted. This means that all working parents will get up to £1,200 per child towards child care costs and the provision of 15 hours for three and four-year-olds.

All that is in the context of what the Government are doing to help families with the cost of living: a £705 income tax cut, thanks to our increases in the personal allowance; a £1,000 saving on mortgages because rates have been kept low; £364 saved on petrol for those who top up their cars once a week; and £210 saved thanks to our council tax freeze. This Government have real policies, helping real working parents to manage their lives—not the dodgy numbers, unfunded promises and gimmicks we have seen from the Labour party today.

[Jim Dobbin (Heywood and Middleton) (Lab/Co-op)]

On a point of order, Mr Deputy Speaker. I understand that a very serious incident has occurred in the Mediterranean today, when a Spanish naval vessel entered Gibraltar harbour. Is a Minister from the Foreign Office coming along to make a statement about what amounts to a very serious incident?

--- Later in debate ---

[John Woodcock]

Work is important in many ways, not simply as a means of getting an income. There are some real questions about universal credit, but if the hon. Lady will forgive me, I will not go into that now.

Privately, my constituents sometimes share with me their sense of guilt and frustration when the strain is so great that they just cannot shield their children from the cuts they are having to make. Swimming lessons go, trips to the zoo are put off, and when nothing beyond the bare nutritional minimum goes into their child’s lunchbox, they worry that their child is not going to eat enough because they are not giving them what they really like or want. These are working people. They have made the choice to go out and hold down a job, and to juggle work and family life. They do not expect handouts. They know that life will not be easy when they choose to bring up kids, but they just ask for a bit of help with what can seem like the suffocating burden of rising living costs. Child care should be one of the things that lift the strain on families and give them a way out of poverty; it should not add to the burden.

One of key recommendations of the Furness Poverty Commission on dealing with social and economic exclusion in Barrow and Furness was to close the gap that local people had identified in affordable and flexible child care. It is great that the number of children under the age of four in England is increasing, and I am pleased to have been able to do my bit on that front in recent years. So I am delighted by Labour’s plans, which my hon. Friend the Member for Stoke-on-Trent Central (Tristram Hunt) has set out, to increase the availability of affordable child care. I am especially pleased that the extra entitlement will come in the form of wraparound care from 8 am to 6 pm.

Increasing child care from 15 to 25 hours a week could make a real difference to many families in my constituency. For many parents, it would make the difference between being able to work and not being able to do so. The provision of 12.5 or 15 hours has been a help but it has often not provided a trigger given the way in which the need for child care is spread out if parents rearrange their lives to go back to work. I believe that this wraparound care, aligning child care with the standard working day, will be revolutionary in helping parents to get back to work.

Like my hon. Friend the Member for Leicester South, I have a great deal of respect for the Under-Secretary of State for Education, the hon. Member for South West Norfolk (Elizabeth Truss). I was therefore disappointed to hear her dismiss the wraparound child care guarantee in the way she did. She did not want to take my intervention earlier, but I have to tell her that one of the main problems is that there is often no provision at all for families—

[Elizabeth Truss]

indicated dissent.

[John Woodcock]

The Minister shakes her head and says that that is not true, but I invite her to come to my constituency and see the problems that many people face when trying to arrange that kind of wraparound child care.

Working parents in my constituency—and in those of many of my hon. Friends—know how hard it can be to find affordable child care, or indeed any form of child care, to cover the period before the beginning of the formal school day and the hour or so at the end of it. Effectively, they are trying to find someone to care for their children and walk them to and from school. That might comprise only an hour of care, but an inability to find it can present an impenetrable barrier to getting back to work. This is why our plans could make a real difference. If we are serious about a sustained recovery that is shared by everyone across the country, we need to tackle the child care crisis head on. If this Government will not do that effectively, the next Labour Government will.

--- Later in debate ---

[Catherine McKinnell]

The Minister provided no clarity on the figures. The hon. Member for Suffolk Coastal said that she was unable to clarify the figures, but that she had been reassured by the Minister. I am less so. I would be pleased if the Minister provided some clarity now.

[Elizabeth Truss]

The figure of 500 to which the Opposition have been referring is the number of centres that were independent and that are now part of a network. They are still open to the public and providing services, but management efficiencies have been achieved. There have been 45 outright closures. I hope that I have made myself clear.

[Catherine McKinnell]

It is clear that the Government are using figures to manipulate the reality that is being reported by constituents up and down the country.

Let me get back to the situation in Newcastle. Last year, my local authority, in the light of unprecedented funding challenges, consulted on a three-year budget for the period 2013-16. When it began the process, it believed that, as a result of funding reductions from the Government and rising cost pressures from inflation, high energy prices and the costs of providing services to an ever-ageing population, it faced a funding shortfall of £90 million over three years. That figure rose during the consultation process to £100 million. Following further cuts announced in the autumn statement and the local government finance settlement, it is now facing cuts of £108 million. It has already announced the closure of Sure Start centres in my constituency—all of them—and because of the additional funding requirement and shortfall, it has now put all 20 Sure Start centres within the Newcastle city council area under review, so we do not know what their future will be.