Childcare and Early Years

Debate between Helen Hayes and Siobhan Baillie

Wednesday 8th March 2023 Commons Chamber

[Siobhan Baillie]

I absolutely agree with my hon. Friend. We need to be able to focus on training and look at all the options, because the workforce are really keen on CPD. It is often quite a vocational profession: people grow up wanting to be childminders, often because they love kids. I mean, I come to this place for a rest—I could not do it. I have massive respect for that workforce, because I could not do what they do. Those people are in the job for a really good reason, but they often fall out of it because the pay is really low and there is not that ongoing professionalisation and earning of qualifications, or the building up of skills.

I am grateful to the DWP Select Committee, particularly the right hon. Member for East Ham (Sir Stephen Timms), because we have carried out a full investigation of the childcare element of universal credit. That has been really helpful, because we have discovered through evidence that the up-front payments are causing huge problems for parents on universal credit. Basically, what is happening is that every new term, parents are begging and borrowing to pay for that term’s childcare, and then they get 85% of that money back through universal credit. That is a really good offer, but families are getting into debt to make those up-front payments—not just once, but every single term—and then the money comes back through universal credit in dribs and drabs. It does not come back with a label saying, “This is for you to repay your childcare bill.”

That approach is causing real trouble, and as we have heard from other hon. Members, the cap has not been uprated. It is a really good offer from the Government and the DWP under universal credit, but only 13% of families are taking it up because it is a complete mess. I appreciate that it is not the responsibility of the Minister’s Department, but the fact that universal credit childcare claimants are not using this system, or they are using it and the money is paid all over the place, is having an impact on the childcare sector, which is directly under the Minister’s control. Again, I am really grateful to the whole of the DWP Committee for looking at that issue.

As we can see, this is not all about money: some of it is about regulation, safety and quality. Parental choice is high up there, but there are things we can do that are—to use an awful phrase—low-hanging fruit. I urge the Government to get things done. I have been putting a lot of pressure on the DFE, the DWP, No. 10 and the Treasury, particularly ahead of next week’s fiscal event, and I am also grateful to all the national newspapers that keep covering this area; The Sun, in particular, is very interested in the universal credit childcare issue. The support that it as well as the whole childcare sector in my constituency of Stroud has provided has been incredible. As all Opposition Members know—as the whole House knows—this issue is coming up on doorsteps. It is something that needs to be addressed, so the fact that we are looking very closely at funding is important.

I have had to be really hard-headed about this issue, trying to find solutions. I would absolutely love to do what some parties are doing: go around saying that we can provide universally free childcare from nine months to 11 years. I would love to be able to make that offer and say that that is going to happen very quickly, because parents are obviously very desperate at the moment to see change, but I do not think that would be the right thing to do. The hon. Member for Dulwich and West Norwood (Helen Hayes) and I had an exchange on this topic before, when I asked how much that policy is likely to cost. I know that the Labour party has not costed it yet, because it is working on other policies.

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

I am grateful to the hon. Member for giving way, because she mentioned the exchange we had recently in Westminster Hall. Can I be clear that it is not currently a Labour party costed pledge to provide universal childcare in that way? We believe there is a need for radical reform of the system, and we are working towards those proposals, and we will put forward our fully costed proposals to the country in due course.

[Siobhan Baillie]

I am grateful for that clarification, because the perception is, in all the trails and all the newspaper articles—a lot of people just see headlines and social media clips, or people standing up doing very short things—that universal free childcare is coming from the other side.

[Helen Hayes]

I would be grateful if the hon. Member could help not to reinforce inaccurate perceptions in everything she says in this House and, indeed, in Westminster Hall.

[Siobhan Baillie]

I would absolutely love to sit down with the hon. Member on the Front Bench and go through some of the newspaper articles I have seen coming from the Opposition, because ultimately, we have to be careful with parents. I do not want parents to be thinking, “Very soon, I will get free childcare, so I am not going to go back to work at the moment. I am going to wait for these big bang changes”, because ultimately it is very unlikely that universally free childcare from nine months to 11, or whatever is being trailed, will be fundamentally affordable to this country. It would not be sustainable and it would be incredibly difficult for the childcare sector to manage, particularly at the moment. I know I am possibly going to make myself unpopular in some quarters, and I am perhaps not giving parents exactly what they want, but it is important that at this stage—for the next week, I hope that this is what the Chancellor and the Treasury are talking about—we are making sure that we are funding and underpinning the childcare sector.

I give credit to the Women’s Budget Group—I think a number of Opposition Members have mentioned this—which has created a coalition of early education and childcare. The coalition has more than 30 bodies, including the Federation of Small Businesses, the CBI, Oxfam, Save the Children, Citizens Advice, the Early Years Alliance, the Fatherhood Institute and the Fawcett Society—loads of people that we have great respect for. The coalition’s ask is twofold at this stage. The first is for an increase to the baseline hourly rate of funding to reflect the true cost of provision. That is the much-feted free hours. They are not free—the taxpayer pays—and the childcare sector is clear that those hours have been underfunded. The Minister and I have had many conversations about this. I would like to see those hours brought up to scratch to ensure we have a motoring childcare sector alongside the stimulation of other things, such as childminders. The second thing that this learned coalition is asking for is reform of the universal credit childcare support to help parents return to work, which I have already mentioned.

The final point I would like to make—I realise I have been going on, but I am so passionate about this, and I am grateful for everyone’s involvement—is that I have met two childminder agencies called Koru Kids and Tiney. They are desperate to provide more childminders and people who can support families. Koru Kids told me that it puts adverts out for childminders and things called “home child carers”, who are effectively part-time nannies who can go into someone’s house. People can take their kids to childminders, but these people can go into people’s houses so that people can work shifts. They can do wraparound care and be flexible. It put out an advert to see how many people would like to apply and it got 75,000 applicants, the majority of whom were women. When it went through the analysis, a huge section were over-50s women or women who were not applying for other jobs. We are thinking about the economically inactive—the Secretary of State for Work and Pensions and the Chancellor of the Exchequer are looking at that—and this is a workforce we could stimulate to get people into jobs, playing a massively important part in our economy. These people have been overlooked.

My final point is on ratios. I am calling for the Government not to make changes to childcare ratios at this stage. It is important that they are investigated. It was never going to be suggested that there would be a change to safety. The Government are looking at the Scottish model, and I do not think anyone is suggesting there are unsafe settings up there. The research I have done with Onward demonstrates to me that the sector is not in a position to take a change to ratios. The sector is also telling us that it would not pass any changes on. As far as I can see, there is no evidence that changing the ratios would change the cost for parents, which is obviously a big focus. We have to be honest about that. If we changed the ratios, the political noise would also be so great that all the other good things that I hope we are going to do would be drowned out.

I thank everybody who is involved. I have had an exchange with the hon. Member for Dulwich and West Norwood, but I hope she knows how much we can all do in this area. It is important to be honest and realistic with parents, the sector and the country.

Childcare: Affordability and Availability

Debate between Helen Hayes and Siobhan Baillie

Tuesday 21st February 2023 Westminster Hall

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

Under the circumstances, it is a relief as well as pleasure to see you in the Chair, Ms Fovargue. I congratulate my hon. Friend the Member for Brentford and Isleworth (Ruth Cadbury) on securing this important debate and on her excellent speech. The availability and affordability of childcare is a pressing issue for families right across our country.

I am grateful to all hon. Members who contributed to the debate. There has been a great deal of consensus. The hon. Member for North Swindon (Justin Tomlinson) highlighted the challenges facing families with children with special educational needs and disabilities in accessing childcare that is suitable for their needs. The hon. Member for Westmorland and Lonsdale (Tim Farron) highlighted the challenges in rural areas. The hon. Member for Stroud (Siobhan Baillie) pointed to the lack of subsidy for childcare for children under the age of two—a critical challenge for many families. My hon. Friend the Member for Walthamstow (Stella Creasy) spoke passionately about the need for fundamental reform of our childcare system.

The hon. Member for Leigh (James Grundy) highlighted the economic harm in his constituency caused by a lack of available affordable childcare. The hon. Member for Upper Bann (Carla Lockhart) highlighted the extortionate costs in her constituency. Finally, my hon. Friend the Member for Ilford South (Sam Tarry) highlighted the importance of high-quality early years education in closing the disadvantage gap for the poorest children.

Childcare is vital social and economic 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 places for two-year-olds and tax-free childcare.

The UK has the most expensive childcare in the OECD. 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 average cost for the same amount of time with a childminder is over £124. The average cost for a child aged two and above is more than £135 at a nursery and £122 with a childminder. I emphasise that these costs are averages, so actual costs 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 of 27,000 parents by Pregnant Then Screwed found that three in five reported that their childcare costs are now the same as, or more than, their domestic costs, rising to three in four for lone parents.

A recent survey by Mumsnet illustrates the extraordinary challenges faced by many parents, with almost 20% of respondents saying that they have given up work or are considering giving up work due to the costs of childcare. Also, 38% of respondents said they were working at home or considering working at home without childcare, and 43% said they could not afford the monthly costs of childcare without help from family, taking on debt or dipping into their savings. Finally, one in four resorted to informal arrangements, such as childcare swaps, to save money.

The Women’s Budget Group estimates that 1.7 million women are being held back from taking on more hours at work by 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 members is increasing; it was up by 12.6% last year over the previous 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 enjoy spending time with their grandchildren but effectively to step in to provide formalised childcare. The CBI agrees, stating that childcare in the UK is in crisis, which contributes to labour market shortages, exacerbates the cost of living crisis, dampens economic output, slows down social mobility and increases gender inequality.

The Government’s funding model is undoubtedly part of the problem. Parents can access help with childcare costs from a wide range of sources. 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 benefit 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. The recent report on the issue by the Work and Pensions Committee highlights serious flaws with the universal credit childcare costs element, which in February 2022 was only claimed by 13% of potentially eligible families. The amount of funding claimed through tax-free childcare is far lower than the amount that was previously spent through childcare vouchers.

The system does not work for childcare providers either. The Government have admitted that they do not pay providers what it costs them to provide the so-called “free” two-year-old places and the places for three and four-year-olds. They have effectively created a cross-subsidy model for childcare, which is driving up the cost for parents of under-twos and leaves childcare providers struggling in areas of deprivation, where parents of very young children simply cannot afford to pay higher rates.

Providers are facing rising energy costs, wage bills and food costs, and many find it hard to recruit the staff they need. That led to a tsunami of nursery closures last year. During the summer term of 2022, from April to July, 65% more nurseries closed than in the same period in 2021. The situation is set to get far worse following the withdrawal of support for energy costs at the end of next month.

I pay tribute to everyone who works in childcare and early years education. They are highly skilled professionals to whom we entrust the most precious people in our lives, yet they are under-recognised for the work they do. Working with very young children should be a rewarding vocation and a lifelong career. It should offer staff 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.

The lack of workforce development contributes to a situation that is particularly challenging for parents of children with special educational needs and disabilities. A recent survey of parents with disabled children found that 87% of mothers could not work as much as they would like to because of a lack of suitable childcare. After nearly 13 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.

What is the Government’s response to this situation, which is of such central importance to our economy and family life? Silence. There was not a singular mention in the Chancellor’s Budget statement in November of the affordability and availability of childcare. When parents, providers, the TUC and the CBI all agree, yet the Government continue to do nothing, it is the Government who are completely out of touch.

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. That 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. 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. The Government must step up and act to deliver childcare that works for children—

[Siobhan Baillie]

This is a point of genuine interest, not a political point. Has Labour costed those policies? I am having lots of conversations with Ministers about this issue. I am really interested in the points that the hon. Member is putting forward, but I have not seen any costings, such as for full universal childcare from nine months. Have they put any numbers behind that?