Child Care (London)

Elizabeth Truss Excerpts

Wednesday 19th March 2014 Westminster Hall

[Ms Karen Buck (Westminster North) (Lab)]

I congratulate my hon. Friend the Member for Lewisham East (Heidi Alexander) on securing this important debate, and on laying out so clearly, as other Members have done, some of the issues to do with the high cost of child care in London. I am pleased with anything that secures additional resources for child care in London and goes towards meeting that child care gap, and one thing that can be said about the additional money going into the child care tax relief is that it will, to some extent, help those middle-to-higher earners facing extraordinary costs at the sharp end, particularly in such places as my constituency in central London.

That money is welcome, as is the Government’s recognition of the need to improve the child care offer within universal credit. The organisations campaigning on behalf of low earners were enthusiastic about that recognition. Will the Minister let us know the extent to which that welcome additional assistance for low earners will benefit Londoners proportionately? Historically, the child care tax credit—I am obviously a fan of that investment in tackling working poverty—never benefited London to anything like the same degree as it did other regions of the country. I need to be sure that the universal credit child care offer will benefit London as much as it should.

That speaks to the central point, which is that the investment in child care announced yesterday—welcome as every penny put into child care is—raises a question about whether that marginal pound is best spent in the way that the Government propose. As we know, £750 million of that offer is likely to go to higher earners, with only £200 million going to lower earners. I suggest that the balance of that investment probably does not meet the level of need. We have heard about the cost of child care in London, but it is also important to recognise that not only do we have a supply-side problem, but Londoners are disproportionately likely not to have networks of informal care, so they will need formal child care more than people outside London. Obviously, lower earners are disproportionately more likely than higher earners to rely on informal care. That needs to be addressed if we are to help parents into work, as well as provide an important child development experience, which is what investment in child care should always be about.

One thing that alarmed me—and, I think, a number of organisations—about the universal credit investment is that the money has been identified as coming from elsewhere in the universal credit budget, although as yet we do not know where. I am anxious to know the answer to that, because the one thing we do not want is for support for working parents within universal credit to be taken from the other ways of supporting low-income families. Universal credit is already likely to disadvantage London as the child care tax credit once did, because it does not properly reflect higher costs there, particularly the higher cost of housing. I think that Londoners will lose, proportionately, under universal credit, or will not gain to the same extent as people elsewhere. We need to ensure that the resources do not come from the individuals who are affected by that.

In the couple of minutes that I have left, I want to talk about the extent to which the investment that the Government announced yesterday will help with supply. There is a risk that there will be the child care equivalent of Help to Buy, which helps with buying, not building. The risk is that the announcement will help to increase demand for child care, but do relatively little to increase supply, particularly because major child care providers’ costs are already squeezed. I know that the Minister is familiar with the London Early Years Foundation, which started as the Westminster Children’s Society, and which I hold in high regard. It tweeted about the child care offer for two-year-olds, which is a critical way of increasing supply:

“The challenge of expanding the two year old programme…is whether we can do this for £5.09 in London? How?”

It is a social entrepreneur project, providing child care at the lowest possible cost, yet it wants to know how it can provide that quality offer within the envelope.

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

I wanted to point out that £5.09 is a national average. The average London rate is higher, because the offer for two-year-olds is adjusted for salaries in each area. It is more like £6 for London.

--- Later in debate ---

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

I congratulate the hon. Member for Lewisham East (Heidi Alexander) on securing this debate on an extremely important topic. The Government’s various announcements this week, from three different Departments—the Treasury, the Department for Education and the Department for Work and Pensions—show how seriously we take this issue. We have announced that parents will get up to £2,000 per child towards their child care costs. Parents on low incomes will get 85% of those costs paid.

I want to challenge some of the things that have been said in the debate. Under this Government, spending on child care and early intervention has gone from £4 billion to £4.5 billion. I am happy to supply hon. Members with statistics for their local authorities. It is worth making the point that we spend as much money on this, as a proportion of GDP, as countries such as France and Germany. We have to try to get better value from the money we spend. That is the intention of a lot of the Government’s work.

Many Members have pointed out that the problem has not arisen overnight. Child care costs have been rising steadily for the past 15 years. However, this year’s Family and Childcare Trust survey showed that costs in England are starting to come down for the first time in 12 years. In England, costs of nursery care are frozen in nominal terms and have fallen once inflation is taken into account. In Wales, the cost of equivalent nursery care has gone up by 13%, and in Scotland, by 8%.

The use of child care in deprived areas has gone up by 16% in the past year. We have also seen an increase in maternal employment rates and the number of women in work. That is because the Government have made an effort to streamline the complicated child care system we inherited. Whereas there were multiple bodies inspecting child care providers, Ofsted is now the sole arbiter of quality. We have also announced a single child care register that all child care providers should be on.

The right hon. Member for Tottenham (Mr Lammy), who is not in his place, made an important point about older children. The Secretary of State has recently announced that for our next manifesto the Conservatives are looking at the idea of enabling and funding schools to open for longer hours to give an integrated offer to parents. The issue is not just about child care but about education.

[Ms Buck]

I raised the fact that councillors are being asked to support our local nurseries and nursery classes, but are being told that they have to cut places from full time to part time because of the funding pressures of the offer. Does that meet the Minister’s objective of providing longer hours of care?

[Elizabeth Truss]

I am about to come on to the issues that are specific to London, and will address that point then.

We are absolutely passionate about quality and improving outcomes, which we know have previously been issues. There is an 18-month vocabulary gap between children from low-income and high-income backgrounds. That is a problem for all of us, because it means that children start school in different positions. We have improved the standards for early years teachers, so that they now have to meet the same standards as primary school teachers. We have seen a 25% increase in the number of early years teachers enrolling on courses in the past year. We are also raising the standards for early years educators. This week, we announced an early years pupil premium for three and four-year-olds, which means that there will be extra money for the most disadvantaged children aged three and four.

We have improved the Ofsted framework, so it now looks at the qualifications of staff in nurseries and is much more focused on outcomes. We have introduced Teach First for early years teaching, to make sure that we are getting the best and brightest graduates into that vital sector. Most importantly, we are working on a coherent framework for the teaching structure from the ages of two to 18, so that early years provision is not seen as an afterthought but as a core part of our education system.

I recognise that there is a greater challenge in London. That is why I launched an £8 million fund with the Mayor of London at the end of last year. That aims to unlock the £1 billion that the Department for Education spends on early years provision in London.

I very much agree with the comments on increasing flexibility. A lot of school nurseries offer parents three hours, five days a week. That does not fit with many people’s working patterns. It also does not use our school nursery resources very well. In London, 45% of early years places are in school nurseries, which are generally open only between 9 am and 3 pm. If those school nurseries were all open between 8 am and 6 pm, that would give 66% extra child care hours. It is not a question of building more facilities but of using our facilities better. Those nurseries could open for two five-hour sessions a day, offering multiple hours.

[Heidi Alexander]

Will the Minister give way?

[Elizabeth Truss]

Forgive me, but I have to keep an eye on the time to make sure that I cover all the points that hon. Members have raised. I wanted to say specifically to the hon. Lady that the figure is even higher in Lewisham—half of all early years places there are in school nurseries. In Enfield, the figure is 42%. Think of the extra places we could provide if all those school nurseries opened for the longer hours I mentioned. It is not that the children should have full-time places; it is a question of parents being able to access places flexibly. Nurseries are entirely able to charge for the extra hours parents take, so they can open to suit the timetables of working parents.

That is why we launched the scheme with the Mayor of London and are working with different London boroughs. I would welcome the support of local MPs. Our officials have been discussing the matter with officials from Enfield and Lewisham in particular, as well as with officials from the three boroughs concerned. I hope that those discussions will help to address some of the issues. At the moment, we have fantastic resources, particularly in London, but we are not using them to full effect. That is a microcosm of the overall problem in child care and early years education: are we getting the best out of the facilities that we have?

If we look at the proportion of places that are in school nurseries, which is up 50% in some boroughs, and the fact that children’s centres provide 4% of child care, there is a much bigger issue to explore with regard to how we best use our school nurseries. In the Children and Families Act 2014, we have legislated for school nurseries to be able to take two-year-olds without having to register separately.

[Heidi Alexander]

We probably share the same aspirations, but the Minister talks about enabling schools to do things, whereas I am interested in how she is going to make them happen. Some of the time, schools do not want to do those kinds of things, and neither the Government nor local authorities have the power to get us to the position that we all want to get to.

[Elizabeth Truss]

We are instituting a school-led system, and it is important that head teachers and other teachers buy into that. We are making things easier by removing a lot of bureaucratic hurdles for schools. It is in a school’s interest to have high-quality nursery education and child care in the school, to help children start school ready to learn, able to communicate and with the right vocabulary. We need to change the culture in education to embrace early years provision more, and move away from having rigid barriers.

We are looking at how admissions policy can affect these issues, particularly for the most deprived children, so that schools have an incentive to take children on. There is a massive opportunity in that area. Some school nurseries across the country have made those changes. They offer very affordable places for children and help their school to do better. That is why we are working with boroughs such as Lewisham and Enfield. We are producing case studies, getting the data together and encouraging schools. The right first step is to make things simpler and easier for schools. I welcome the support of hon. Members in championing this issue in various areas. We can get much better value for money from what we are doing.

I want the overall child care landscape to be understood, as there is a lot of confusion about exactly what proportion of children are in which type of place. In London, a high proportion of children are in school nurseries at age three and four. We are piloting more places for two-year-olds in schools. A high proportion of children are in private and voluntary sector nurseries. I am working with organisations such as the National Day Nurseries Association so that non-school nurseries can link better to schools, the private sector can learn from the public sector and vice versa, and there is less of a divide between them. That is how we will get positive professional practice in the early years sector—by encouraging more inter-working.

On the use of money and the example of Australia, the key point is that we need to make sure that we expand supply. I agree with the hon. Member for Westminster North (Ms Buck) that if we do not, but simply push more cash in, there will be inflation. That is why the Government are making it easier to expand.