Childcare: Affordability and Availability

Helen Hayes Excerpts

Tuesday 20th December 2022 Westminster Hall

[Helen Hayes (Dulwich and West Norwood) (Lab)]

It is a pleasure to see you in the Chair, Mr Hosie. I congratulate my hon. Friend the Member for Slough (Mr Dhesi) on securing this important debate. The availability and affordability of childcare is a pressing issue for families right across our country, and it is right that we debate it in the House.

I am grateful to all the hon. Members who have attended this debate, especially the hon. Member for Ruislip, Northwood and Pinner (David Simmonds), who has spoken from his extensive experience as a former Cabinet member for children’s services. I am confident that had this not been the final Westminster Hall debate on the last sitting day before Christmas, more colleagues would have joined us. I know that this issue is presenting itself in Members’ inboxes and surgeries in many parts of the country.

Childcare is vital social infrastructure. It helps parents to work, it delivers early education to the youngest children and it underpins the growth of our economy. However, under this Government we have seen the cost of childcare rise, increasing numbers of providers closing their doors and an increasingly complex funding system for parents to navigate, resulting in low take-up of both subsidised two-year-old places and tax-free childcare.

The costs are eye watering. The latest release from Coram reports that the average cost of 25 hours a week in a nursery in England for a child under two is over £140. The same amount of time with a childminder is over £124. The cost for a child of two and over is more than £135 at a nursery, and £122 with a childminder. Those costs are averages so they can be significantly higher, particularly in London. Analysis by the TUC estimates that the cost of childcare for a child under the age of two has increased by £2,000 a year on average since 2010.

A survey by Pregnant then Screwed of 27,000 parents found that 62% reported that their childcare costs are now the same or more than their domestic costs, rising to 73% for lone parents. More than four in 10 mums reported that childcare costs had made them consider leaving their job, and 40% said that they had to work fewer hours than they would have liked because of the costs of childcare. Another survey found that almost a third of new parents said that the cost of childcare was preventing them from having any more children.

The Women’s Budget Group estimates that 1.7 million women are being held back from taking on more hours at work due to the cost of childcare, and recent data from the Office for National Statistics has shown that for the first time in decades, the number of women leaving the workforce to look after family is increasing—it is up by 12.6% in the last year. The unaffordability of childcare is also placing strain on grandparents, many more of whom are now giving up work or reducing their hours—not simply to spend time enjoying their grandchildren but to step in effectively to provide formalised childcare.

The Government’s funding model is undoubtedly part of the problem. Parents can access help with childcare costs from a wide range of sources, depending on their circumstances and the age of their children. The subsidy for two-year-olds is means-tested, but some of the subsidy for three and four-year-olds is applicable only to working households. Some funding is provided through the benefits system, and some through the tax system. There is significant unclaimed funding for childcare because the system is so complicated and confusing for parents to navigate, and the Work and Pensions Committee report published today highlights serious flaws with the universal credit childcare costs element, which really is not working for the families who need it. The amount of funding claimed through tax-free childcare is far lower than was previously spent through childcare vouchers, and there is similarly low take-up through the benefits system.

The system does not work for the providers of childcare either. The Government have admitted that they do not pay providers what it costs them to provide the so-called free two-year-old and three and four-year-old places, so they have effectively created a cross-subsidy model for childcare. This drives up the cost for parents of under-twos and leaves childcare providers in areas of deprivation, where parents of very young children simply cannot afford to pay higher rates, really struggling. It also forces nurseries to charge parents for additional costs, such as for particular activities and for lunches, which really should not be the case when parents are already paying so much for the core costs of that provision. Providers are facing rising energy costs, wage bills and food costs, and many are finding it hard to recruit the staff they need, which has led to a tsunami of nursery closures this year. During the summer term, from April to July 2022, 65% more nurseries closed than in the same months in 2021.

I pay tribute to everyone who works in childcare and early years education. They are highly skilled professionals to whom we entrust our most precious little ones, yet they are under-recognised for the work they do. The best settings, such as the Early Years Community Research Centre in Shirecliffe, Sheffield, which I had the great pleasure of visiting recently, are a partnership with parents to support and care for young children, providing support to the whole family. Working with very young children should be a rewarding vocation and a lifelong career. It should offer the opportunity to develop expertise and specialisms, and to progress accordingly, yet all too often there is no opportunity for development or progression, and nurseries report that they end up competing with better-paid roles in retail or distribution.

After 12 years of Conservative government, our childcare system is failing families, failing children, failing providers and failing our economy. It is holding back parents from succeeding and progressing at work, and what is the Government’s response to this situation of such central importance to our economy and family life? The response is silence. There was not a single mention in the Chancellor’s Budget statement last month of the affordability and availability of childcare, which is holding back our economic growth. The main measure that the Government have mooted is the relaxation of childcare ratios to allow the same number of staff to look after more children. There is no evidence that this would have any impact on the costs to parents, but there are concerns that it reduce quality and compromise safety. That is not what parents or providers want, and it is not what is best for children.

Labour recognises the fundamental importance of childcare to parents, children and our economy. We also recognise that childcare costs do not stop when a child starts school, which is why we have announced our plan to introduce fully-funded breakfast clubs for every primary school in the country, supporting parents to work and helping to address food poverty. We will make sure that every child, wherever they are in the country, starts school ready to learn. Our children’s recovery plan proposes to increase the pupil premium for the early years to the same level as for reception, quadrupling the funding and ensuring that additional support is available in nursery settings for children who have suffered the impacts of the pandemic in their early development. We will address disadvantage and prevent it from becoming embedded for a lifetime.

Breakfast clubs are just the first step on the road. We are committed to building a childcare system that supports children and families from the end of parental leave until the end of primary school, as part of the vital infrastructure that underpins our economy. It is vital that the Government get a grip on this issue and show the vision and leadership that has been so badly lacking.